Profits are Just Good

Nearly all read distributive forms of government try to find some way to give moral justification for their poor economic choices. They assume that it will be easier for people to accept wealth redistribution if they can somehow prove that the wealthy are morally inferior. While like any group of people the wealthy have their own set of resource-related vices, they are demonized for doing things that other groups are praised for. Academia has attacked the morality of profit itself on countless occasions because doing so is both popular and justifies their pre-chosen political choices. However, in almost every situation, the existence of profits suggests that the profit maker has left the world better off than they found it. Regulation can confer special treatment, people can have malformed desires, power can be abused, but none of these things are the result of profit itself. The ability of profit to be misused does not take away from the fact that the very act of generation is most often good and almost always serves people’s wants. The creation of profit itself almost requires leaving the world better off, and the constant demonization of it must end.

Profit is created when revenue is greater than costs, and in most situations this occurs when customers are willing to pay more for something than it cost to create it. This means that customers have a certain amount of money and they estimate that they will be made better off by turning that money into whatever product is being sold. While people are not always right in their estimation of what will make them happy, they are often better than anyone else at making that judgment. If someone is able to sell a product, it can be assumed that that products combination of quality and price is not dramatically worse than the other options available to that customer. Essentially, profit means that a producer was able to do something better or at least similarly to other businesses. Profit is a sign that businesses can perpetuate themselves. They do not need to sink to the level of charity or coercion as they’re able to responsibly manage their own resources and add more to the world than they take.

The growth of technical capacity and business skill is inherently good, but the fact that businesses do so while satisfying customers adds a second layer of pure good to profit-making. Customers are able to have access to more for less when successful businesses are fighting for profit. Even when a natural monopoly exists, that will always be better than that monopoly not existing. A business‘s revenue being greater than their expenses means that they are more valued by the world than the cost of the resources that they expend. Countless innovations that benefit people in every part of life have been discovered by profit seekers. Profit can be made by businesses that make people worse off in a coercive environment or in situations where people do not understand the cost of what they want, but this has little to do with profit. Businesses seeking profit cannot be held fully accountable for people who do not understand that what they want is dangerous. Businesses have a responsibility to adjust their strategy as they have access to more information about the negative effects of their products, but they and customers share the responsibility for profit that leads to negative outcomes.

While profit is a symbol of self sustainability, redistributive schemes of resource allocation have an overwhelming tendency to hide the fact that many government services take more from the world than they give. Without the discipline of measuring profit and loss, imperfect people are less able to keep their revenue high and expenses low. While this can be helpful to the people in some situations, it quickly loses good created per dollar of expense as resources become mismanaged more dramatically over time. Profit serves its strongest role as an accountability mechanism, and without it the current era of prosperity would have taken far longer to reach. Distribution isn’t bad, but it almost always has practical issues. The informational gap from the one with the resources to the one who receives them means that people will almost always have their needs satisfied more slowly and more imprecisely than they would in a profit driven system. In the future, when redistribution is measured against capitalism, they must meet on the same terms and capitalism must have the moral weight removed from it. They are both systems that allow for broken people to make mistakes, but one of them is far more effective at getting the best out of people and allowing them to better the world.