To profit is to improve one’s condition and enhance one’s life. In the context of a voluntary exchange, a profit is a gain that each party expects to receive. In the context of business, a profit is a financial gain after all costs have been paid.
Businesses profit only if they successfully sell goods or services to consumers at prices that exceed the businesses’ costs; otherwise, they suffer losses. People go into business in order to profit; if they faced the prospect only of losses in a given business venture, they would not pursue it. Profit drives producers to grow the food, to build the houses and office buildings, to construct the airplanes and automobiles, to assemble the computers, and to create everything else we need to live and prosper.
In short, businesses’ profits enable us to live. If businesses couldn’t profit, we would face stagnation, poverty, death.
That is the context we should bear in mind when watching Peter Schiff’s interviews from the Democratic National Convention. Schiff found numerous Democrats who enthusiastically endorsed banning corporate profits. Others sought “only” to cap corporate profits (by what standard or by what right, they did not mention), while one woman said she would accept nothing less than mandatory corporate losses.
Businesses have no guarantee of success; most new businesses suffer losses and go out of business. Consider, then, what it would mean to ban corporate profits: It would mean that corporations would have to cease doing business. The result, quite obviously, would be the utter devastation of the global economy, mass starvation, and mass death on a scale that would make Stalin and Hitler look like pikers.
This is what some of the leaders of today’s Democratic Party advocate.
There are no words . . . except: nihilism.
Like this post? Join our mailing list to receive our weekly digest. And for in-depth commentary from an Objectivist perspective, subscribe to our quarterly journal, The Objective Standard.
Related:
Image: Wikimedia Commons
You might also like
