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Give Back? Yes, It's Time For The 99% To Give Back To The 1% (Forbes)

I'm sharing this here to first show that there are indeed people making the claim that profit represents value, and why the argument is flawed.

"Or if the moral praise showered on Mother Teresa went to someone like Lloyd Blankfein, who, in guiding Goldman Sachs toward billions in profits, has done infinitely more for mankind. (Since profit is the market value of the product minus the market value of factors used, profit represents the value created.)"

This first assumes that market is a good way to evaluate goods and services. There is a concept called externality, which refers to the difference between the value paid by the purchaser and the value produced through all the consumers. For example, public schools not only provide value to the students in the form of education, but also to parents who now have time off from childcare, and to employers who now don't need to train its employees things like basic math or reading/writing. However, when this is left to the market, the students bear all or close to all the cost, while benefit is spread around.

There is another concept called market failure, in which everyone acting in self interest does not result in efficient allocation of resources. This can be caused by things like externalities or information asymmetry.

In short, no, profit does not represent or equal value, and yes, people actually believe that is the case.

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United States, Fremont
9 comments
Chickonthenet
When people value something, they are willing to pay for it. This equals profit. If I find a market need, spend my time and resources building it and marketing it, I have a right to all the profits. If someone helped me get there, I pay them what their share of the value was in the creation that we negotiate at the time of the contract for work. This is basic supply and demand. When government gets in the way and tells people their value is more or less regardless of consumer demand, that value is fake and cannot ever sustain.
5
Joey
I'd also add that the value added by the idea person or the capital person is risk. The capitalist expends time and money and stands to make nothing if the idea fails, whereas the worker is guaranteed pay for the work performed.
Philo 0316Author
When a person values something, that person is willing to pay only up to how much that person values it. The social impact from that purchase isn't considered, and this difference is called externality. It's a little bit more complicated than just the supply and demand, but this is still a fairly introductory concept.
10
🍼🏍🔥Garsbriel❓
Pro Creator
Philo 0316 And there are stuffs that can not be ruled only by a supply and demand law... Army and defence. Education. Health (no money no rights to be cured). Freedom, for instance speech and expression: no money and no rights to be heard, money and monopoly of medias time or monopoly of polls subjects. Environment: rights to pollute if only your product is a market success. Natural resources like water, air, petroleum, gas, minerals, etc...
Philo 0316Author
🍼🏍🔥Garsbriel❓, I don't know about cannot, but I definitely think they should not.
🍼🏍🔥Garsbriel❓
Pro Creator
Philo 0316 I said: "It can not be ruled * ONLY * by a supply and demand law..."
Philo 0316Author
🍼🏍🔥Garsbriel❓, sorry, must have misread your comment.
🍼🏍🔥Garsbriel❓
Pro Creator
Philo 0316 Don't be sorry. You made a really good card. It happens to miss a word on a full text, and misread it. It doesn't matter. 😉
🍼🏍🔥Garsbriel❓
Pro Creator
It is always surprising that the profits of large companies are always reserved for shareholders only, and that the tax on these profits is considered as theft... While when big banks and big companies fail, it is often the state that has to bail out these companies, grant credits without return, or even simply pay debts, with the tax money paid by the incomes of the poorer, who can never escape taxes. Privatization of benefits And nationalization of debts, in the sense that it is always up to the state to come to the rescue of large private companies when they go bankrupt.
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