Friday, April 2, 2010

A Lesson in Profit

Check out the article "A Lesson in Profit" by Gen LaGreca and Marsha Enright published on 3/31/10 in The Daily Caller. Using the success story of Henry Ford, the authors critique Obama's erroneous disdain for profit, and the free market in general.

Gen and Marsha--
Thank you for this important lesson. Throughout the health care reform debate, I kept hearing the phrase "profits before people" with the implication that the two are in conflict. Similarly, the denigration of "fee for service" in medicine as the cause of rising costs and prices while ignoring that the bulk of economic exchanges in a free market are "fee for service" and lead to increased efficiency and lower prices.

Both of these criticism are at root anti-profit. But as you point out, profit is simply the reward for successfully offering a good or service while keeping your own costs less than the price people are voluntarily willing to pay. To be against profits, is to be against benefiting by offering to others something of value.

Marx's exploitation theories have been disproven in economics (von Mises, Reisman and others) and in practice (USSR, Cuba, S. Korea)--and yet they linger on in the minds and hearts of many. Until people understand the tremendous value and benevolence of profts and the profit motive, we will be condemned to continually play whack-a-mole with wealth-robbing legislation.

Three cheers for profits! And three cheers for your article which shows us why!

UpDate 4/5/10: See also: Profits Are for People by Richard Ralston


1 comment:

Mo said...

profits are for people