Profit

About

Profit is a concept most commonly thought of in connection with economic theory, especially capitalism, but it is actually an idea that predates civilization and even sentience, since it is an important element in the psychology of any species that collects resources and makes decisions about how to use them.

Usage

This page needs to resolve whether "profit" is necessarily localized, or whether it is meaningful to talk about "common profit". The section on capitalism assumes that localized profit is a special case, while the section on "The Profit Motive" assumes it is always localized.

Definition

Profit is where a given system invests a particular type of resource in a particular project which then returns more of the same resource (or one whose value can be converted into a measurement of the original resource) than was originally invested.

A "system" can be, for example:

• an individual organism -- expending stored energy to gain food, which can be consumed to replenish that energy as well as provide extra energy (profit) for non-food-gathering activities
• an individual's possessions -- planting some grain instead of eating it in order to grow more grain (profit)
• a group of people --
  • trading food for tools to help grow or gather more food
  • constructing defenses around a village to protect people and possessions
  • tending to the sick so that their skills and knowledge will remain available on recovery
  • providing sustenance for the infirm, so that their wisdom will remain available
• a society --
  • spending time and energy to make paths so that travel takes less time and energy
  • tending to "useless" members of society in order to cultivate empathy and kindness
  • spending resources creating art in order to increase general enjoyment of life
  • providing mutual protection and aid to minimize attrition from major mishaps too large for individuals to overcome alone

The Profit Motive

When unexploited resources are plentiful, the profit motive works for the common good by providing an incentive to invest the necessary wealth into developing those resources for the common good.

When unexploited resources are scarce and wealth is plentiful, the profit motive works against the common good because those with wealth will have both the means and the incentive to redirect existing wealth to themselves rather than developing new resources for the good of all.

Capitalism

Capitalist theory tends to look at profit solely in terms of a specific type of system, i.e. businesses. Individual capitalists are primarily concerned with businesses in which they have a financial stake, which means that those businesses will tend to be (a) for-profit corporations (b) large enough to provide substantial revenue for many owners.

Capitalists consider the larger system of the society in which those businesses exist, which they refer to as "the economy", to be of secondary importance; it is only significant insofar as it has an effect on the profitability of particular businesses in which the observing capitalist has some sort of financial stake.

At their most broad-minded, capitalists will recognize that the profitability of all businesses (including their own interests) are to some extent related, and that therefore it is good even when businesses in which they have no stake are doing well -- as long as this is a reflection of generally profitable conditions in "the economy" rather than a competitor who is taking away potential profit.

Capitalists do not, however, recognize the importance of profit to society as a whole, nor do they have any interest in the profitability of a business's employees.

This leads capitalists to favor policies (such as reducing the effectiveness of environmental or safety regulations) that can be amazingly destructive to society -- or even to a company's employees -- as long as they are even slightly profitable to the capitalist's business(es).

This also leads capitalists to oppose expenditures whose profit is primarily to society -- improving conditions in general and thereby leading to more profitable circumstances for everyone -- rather than to any business or set of businesses; indeed, they may honestly believe that such projects are a waste of money since the profit cannot be measured in terms of profit to any particular business.

Or, to put it another way:

The more problems there are, the better the economy, generally speaking. In this system, it is inherently GOOD for cars to break down, it is GOOD for people to get cancer, it is GOOD for computers to become quickly obsolete. Why? More money!

Change, Abundance, Sustainability are the enemies of profit.

Progressive advancements in science and technology, which can resolve problems of inefficiency and scarcity once and for all are, in effect, making the prior establishment's servicing of those problems obsolete. Therefore, in a monetary system, corporations are not only in competition with other corporations they are actually in competition with progress itself.

This is why it is so difficult to have any form of change in a monetary system. You simply can not have a social convention where money is made off of inefficiency and scarcity and misery and expect a quick incorporation of new advents that can relieve these problems.

— Peter Joseph, Social Pathology Lecture

Conclusion

Capitalist principles will ultimately lead to the destruction of society if they are allowed to control its course, as they do not provide any check upon the motive for localized profit at the expense of general degradation.

Quote

Profit and democracy are so contrary that there is no scope for comment. The aim of democracy is to leave people free to decide how they live and to make any political choices concerning them. Making a profit is a disease in our society, based on specific organizations. A decent, ethical society would pay only marginal attention to profits. Take my university department [at the Massachusetts Institute of Technology]: a few scientists work very hard to earn lots of money, but they are considered a little odd and slightly deranged, almost pathological cases. Most of the academic community is more concerned about trying to break new ground, out of intellectual interest and for the general good.

— Noam Chomsky [1]

Links

Reference

• Wikipedia
• Conservapedia
• dKosopedia: no article as of 2011-07-20
• SourceWatch: no article as of 2011-07-20
• RationalWiki: no article as of 2011-07-20

News

• 2014/04/30 12:35 UTC [L..T] Facebook Is Throttling Nonprofits and Activists «So far coverage of Facebook's plan to squeeze the organic reach of Pages has focused on its impact on "brands" that spam us with ads and promotions. But nonprofits, activists, and advocacy groups with much fewer resources (and no ad budgets) are also being hugely affected. It's starting to look like Facebook is willing to strangle public discourse on the platform in an attempt to wring out a few extra dollars for its new shareholders.»
• 2012/11/20 [L..T] Problems and Strategies in Financing Voluntary Free Software Projects "It's easier for a successful volunteer Free Software project to get money than it is to decide how to spend it. While paying developers is easy, it can carry unintended negative consequences. This essay explores problems and benefits of paying developers in volunteer free and open source projects and surveys strategies that projects have used to successfully finance development while maintaining their volunteer nature."
• 2011/07/21 [L..T] 21st-Century Slaves: How Corporations Exploit Prison Labor In the eyes of the corporation, inmate labor is a brilliant strategy in the eternal quest to maximize profit.