by Rick Lowe
People decry the profit motive and beg for more involvement of politicians to fix "everything".
The profit motive of the market economy is crucial to all and sundry and I for one make no apologies for the market.
Of course profit is made when one produces or trades something with someone else. Both lives are made richer in the process. One person gets something they desire more than the money they paid, and the other receives money for his or her product, providing the means to buy more inventory or raw material etc to produce more and raise his or her standard of living at the same time.
The naysayers will always point to the worst examples of business people as the norm. But as Yaron Brook and Don Watkins point out; "Capitalism is fueled, not by the Al Capones or the Bernie Madoffs who seek to get money by hook or by crook. It is fueled by individuals who make money by creating wealth. This is the actual nature of the profit motive: it is the desire to earn rewards through productive achievement."
Oh the con artists and rip off's etc will always be around, they're human, but the great thing about the market process, is when someone if found to be wanting, buyers will go to someone else to spend their hard earned money.
It might be worthwhile to remember the words of Studdert Kennedy when he said, "We must be careful not to throw the baby out with the bathwater".
If we had a justice system that worked and government revert to it's correct role of Policeman, or night watchman – so people can't harm each other or steal from one another – we might see better public policy by all future governments.
But alas, there are always people that want something for nothing or favours for themselves but not others using the coercive power of government.
Maybe the profit motive will be better understood when we have less government interference in the economic process. Government is made up of people that can run their lives no better than we can run our own, how can they be expected to direct us when it comes to the market process?
So well said Rick.We need less government,not more.The more government,the more taxes,the more taxes,the less business,the less business,the less jobs,etc.etc.etc.When will this ever come to light with people.
The profit motive drives new investment which creates new jobs.. Investors are willing to undertake investment risks (loss of capital) in creating new businesses in exchange for the opportunity to make an acceptable return of their investment in the form of profit.. Without the profit motive there would be no real growth and no increases in new jobs.. This is how a free market system works through the allocation of scarce capital resources to potentially profitable investment opportunities..
Governments do not participate in investment risk, but tax a percentage of business revenues and/or profits which reduces the return on invested capital.. Excessive government regulations, taxes and labor laws and regulations increase business costs and further reduce return on capital.. All these factors influence investor decisions and can reduce new investment which in turn reduces economic growth.. Without the profit motive, the economy grinds to a halt, jobs are loss and government revenues decline.. Recession sets in as private sector growth, the real driving force in the economy, declines.. Government borrows more money in hopes of stimulating the economy.. This will increase GDP figures, but does not increase real growth in a meaningful way.. Increased Debt causes the national Deficit to increase and our Dollar is further depreciated through inflation.. The nation’s credit rating comes under attack as the economy continues to slow..
If this sounds a lot like what is happening in the United States and the Bahamas, sadly you may be just right…
I think the government feels that we are in business for fun,not to make a profit.They must think like the socialist president Obama said when he said that business people did not do it by them selves,what a crock.If I bust my ass,what gives you the right to take it from me to give to someone who is sitting on the block ? Socialism shuts production down & God knows in the Bahamas we have a serious work ethic problem now,our pickings are very slim. Its past the time for us to stop taking this crap from the government,whichever one it might be.People go to jail for stealing & that is exactly what they are doing to us,stealing in my opinion
Dennis here’s a quote from a great politician………Margaret Thatcher
My policies are based not on some economics theory, but on things I and millions like me were brought up with: an honest day’s work for an honest day’s pay; live within your means; put by a nest egg for a rainy day; pay your bills on time; support the police.
Makes sense to me Ken 50ish.She was a great one.
Hay fellers, it’s increasing government encroachment and control over the private sector that is the real issue here.. Success in the private sector requires one have the attributes set forth by the former British PM.. She opposed excessive regulation, over taxation and most of all increased control over our lives.. She was a champion for free markets and individual freedom of choice.. Yes Dennis and you too Ken, she was a great lady and a fine inspiration..
So true Tradewinds & its getting worse by the day.We need someone like her here & in the good old USA ! God knows what we both have now will only make it worse.