Profit as a Reward for Helping People
"Action attempts to exchange a less desirable condition for a more desirable one, and costs are incurred to achieve a goal. The difference between the value of the costs and of the goal is called profit."
- Ludwig von Mises, Human Action
When an entrepreneur profits, it's because the demands of his customers were efficiently met. All other things being equal, entrepreneurial profit is thus a reward for reducing the felt uneasiness of others. The greater the profit, the greater the increment in relieved uneasiness and increased prosperity for their customers.
An excess in the total amount of entrepreneurial profits in a given population over the total amount of entrepreneurial losses would likewise be proof of a general increase in the standard of living throughout that population. Of course, the corollary implication is that an excess in the total amount of losses in a given population over the total amount of profits would be evidence of a decrease in the standard of living throughout that population.
The number of people blinded to this realization by their own envy is not insignificant. In the minds of many, profit is a symptom of usury, deception and coercive exploitation. To be fair, there are those who seek to gain by means of state violence rather than by entrepreneurial means, but to condemn all profit due to the actions of plunder seeking interventionists is to throw the baby out with the bath water.
Without entrepreneurial profit, there can be no large scale increases in the standard of living. The degree to which entrepreneurial profits are suppressed through taxation and regulation is the degree to which the cumulative standard of living for everyone is suppressed.
Taxing the rich for being rich in an attempt to "spread the wealth" can therefore only ever result in the opposite of the intended effect.
Yes that´s right, really great article! -resteemed
Great post - thx - tweeted it:
https://twitter.com/CindyDBrown1/status/785450025690226688
Disclaimer: I am just a bot trying to be helpful.
The only way to truly increase the prosperity of the people is to get the state to do away with taxes or at least lower them. If the people and businesses didn't have the economic pressure of automatically losing 30-40% of their income to support wars we don't need people would have more funds to use on whatever they pleased. We would have a bigger middle class, more people would be able to start businesses to help improve the quality of living for those around them, and people wouldn't have to be so tight with their pennies so they could afford to support the local businesses instead of wasting their money on big corporations like Walmart because it's cheaper. Ultimately by supporting these corporations we're only making it harder on ourselves.
Or do away with the state entirely, which would cripple those corporations' ability to maintain their market share the expense of other people.
I understand that tax is supposed to be used for infrastructure and maintaining a whole slew of things, but not on the backs of people who can least afford it. I actually agree that taxing the rich could result in the opposite effect for helping, however, I don't think they should have all the loopholes afforded to them either. Most people don't start off being rich - they earn it. Anyone who works hard knows there's value in their efforts and pay their share. Should that be a straight tax? Should it be some kind of sliding scale? I don't know. I'm neither an economist or politician. I'm just a person who sees the fat cats in Washington with all their perks, while our roads and bridges are in disrepair, and while there are jobs out there, no one wants to hire full time work.
Why should capital be ripped from the hands of people who have already demonstrated that they know how to satisfy the demands of the customers whose lives they improve? Don't entrepreneurs and investors more than provide their fair share by investing in the production capital which makes people productive and by shouldering all the risk and liability and loss when a venture doesn't pan out? Why should they have to be penalized for shouldering all of the burden of providing production capital?
Taxation is the method by which people who have no idea what to do with resources steal those resources from people who do know what they're doing.
Wouldn't we all have a little more to invest if 30% of our paychecks weren't seized under threat of imprisonment and violence? Wouldn't roads be a lot cheaper absent the bloatware bureaucracy called "the state"? Why not just let people pay for roads and bridges directly instead of going through a wasteful middleman who arbitrarily sets prices for his own benefit at gunpoint?
Why not just get rid of all taxes given that taxation is a negative sum game? What service couldn't be provided in the free market that's currently provided by compulsion and precipitated by theft? If the market can provide smart phones, why couldn't it provide flat pieces of rock to drive on?
I'm not disagreeing with you @jaredhowe. I actually did state that taxing the rich could result in the opposite effect of helping people. My problem comes with the loopholes made by the rich to benefit the rich and I don't see trickle down effects of those loopholes are helping anyone but someone's bottom line. My perspective on that comes from seeing stuff like this all the time:
There is also the saying that people will spend what they make. Not too many people are savvy enough to "save for a rainy day". I would bet that if you asked 10 friends what they would do with that extra 30% - maybe one or two of them would say INVEST. Chances are, they've been eyeing a new toy or upgrade of something.
Yes. Roads would probably be a lot cheaper if government wasn't so bloated - but to leave it to the people? No. It wouldn't get done because you'd have part of the population who feel entitled to better roads but don't think it's their responsibility, people who won't care because it's not a road they travel...and then again, a few choice few who are truly philanthropic and capable that may shoulder the responsibility. We're using roads as examples but you can put that to any community-oriented task with the same results - even Steemit.
I know about government theft! Our assets were seized by New York for a business we closed almost 4 years ago...and they "didn't get the paperwork." That was a loss of 2 months salary...which cost me my house, my car, and my credit score because literally everything was late.
My aunt couldn't afford healthcare and didn't qualify for any kind of assistance until she was too far gone with cancer to save. I could even argue that the government killed her. Trust me when I say I am no fan of the government.
All that aside, my original point is that rich people are not bad people but they will take care of their own. I truly believe it's just a part of human nature - a need to be elite or exclusive...or better...or richer...or king of the mountain...