Oddbean new post about login | logout I respect that you responded but you did not answer “what is the definition of profits”. You gave me your opinion and a flawed but valid response to you.
Profit is what’s left over after one covers the expenses for everything that is needed to produce a good or service. In other words the signal that what one is doing is valued by the market and sustainable. A business that cannot produce a profit will soon be parted from its capital. My response was not flawed. It is exactly what happens when property rights are respected. We know that because we can see how humans act. We are not talking quantum mechanics here
I run a business and have run a business that is based on no profits. It has been running for almost a decade and all the producers produce more and take home more every year. So maybe you can understand why I believe your understanding of capitalism and “profit” may be incorrect. If “profit” is left over from all expenses, that means the laborers are being stolen from or the consumer is being ripped off.
You can certainly choose to run a business that breaks even on purpose. I don’t deny some people derive more value or satisfaction from having their employees earn a bit more and their costumers have slightly cheaper goods than from being able to accumulate more capital and wealth. The business that are more profitable will be able to grow more and be able to provide those services and goods to more people adding value to their lives. My understanding of capitalism is not incorrect. It’s really not complicated. It boils down to a system that respects property rights, which incentivizes people to acquire capital for the purpose of producing higher valued goods and services. The capital will naturally flow to whoever can use it best and manage to keep and increase it. What your saying is no different to a business owner that takes the profits and donates them to charity. Employees voluntarily enter into a contract with the employer, so no they are not getting stolen from. They are more than able to negotiate higher pay. And customers voluntarily pay for the goods snd services, so unless the goods and services are falsely marketed no one is getting ripped off. The reason they get paid a fixed salary in most cases is because they are not taking any of the risk the entrepreneur is taking. They get paid whether sales are good or not. The owner takes the risk so he enjoys the upside if the business is profitable or bears the burden of going out of business. You would greatly benefit from reading any Austrian economics books. I would personally recommend Principles of Economics by Saifedean. Happy to send you a free pdf.
I’ve read plenty of Austrian economics. I know how capitalism works. It’s much like the American Constitution, either it failed to prevent State corruption or it enabled it. I believe in free markets, that’s why I spread ideology and not legislation. You would be wise to research who creates the “barriers to entry” in modern global economies.
And yet you think at will employees are being stolen from? Doesn’t sound the Austrians teachings landed Capitalism is not legislation Even if you don’t like capitalism the alternative is not respecting property rights, which is a no go obviously. Your beef is not with capitalism (what happens when people can own stuff). Your beef is with the state giving preferential treatment to some business also known as cronyism. Or with the decay of morality brought about by the state destroying the nuclear family and religion The state didn’t create capitalism in case that was not clear
“Capitalism is not legislation “ that seriously is no where near historically accurate. You mean to tell me that not legislation has ever been enacted for “profit” of a company, group of individuals, or sector of the economy? Here is a real stick in the wheel…capitalism can also be its own religion.
Yes, the state can pick winners and losers. Cronyism is bad, no one is arguing to the contrary. However, that does not invalidate the merits of capitalism. Most people don’t fundamentally understand what capitalism is or why it’s the system that leads to the most prosperity and is morally superior. They just see Google paying the state to give them special privileges and cry capitalism is evils and broken. They are fighting a straw man the same way you seem to be. But we can agree to disagree
The labor theory of value was debunked a long time ago.
What is the “proof of work” theory?
Not related.
Okay
No, really, it's not. Labor theory of value debunked by Carl Menger: [Principles of Economics](https://mises.org/library/book/principles-economics) (1871} Has nothing to do with hashcash proof of work that was incorporated into bitcoin. See @Aaron van Wirdum's [The Genesis Book](https://www.amazon.com/dp/B0CSG6C6GR?tag=bravesoftwa04-20&linkCode=osi&th=1&psc=1&language=en_US).
Without labor, there is no service or product. Without expending energy, there is no mining bitcoin. Unless you have learn to change the laws of physics, there is no debate here.
If value/price is determined by labor or work inputs, explain a drop in price. Was there somehow "negative work"? The labor theory of value is bunk. > It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance. -- Rothbard