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Gojira
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« on: July 30, 2008, 05:35:32 PM » |
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I had been thinking about this for a long time and wondered what your views are on this subject. Let me propose this proposition:
A stark distinction can be made between Capitalist and Marxist theory: the former find that profit would be inherently good and that the later believes it to be inherently bad. Understand that my argument involves the subjective definition of profit as good and bad comparable to good and evil; benevolent and malevolent; favorable and unfavorable; respectively. However, the definition of profit can be stretched and does not have to be understood in just explicit terms but implicit terms as well. The conditions and assumptions can not devoid the proposition, however the assumptions can be challenged to tailor one's own argument.
Here are the conditions:
Profit is inherently good because it helps reward those who take the economic risk to create added value.
Profit is inherently bad because it creates proportions of inequality. Inequality will ultimately lead to exploitation.
Assume that the purpose of any economic system is to create added value.
So that leaves me with the question: Is profit inherently good or bad?
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illy
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illerino if youre not into the whole brevity thing
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« Reply #1 on: July 30, 2008, 08:11:13 PM » |
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I would say it is inherently neither. Profits can have very good effects, and they can have very bad effects.
I would say the same about the pursuit of profits. There is an inherent benefit for society with the pursuit of profits. There is also an inherent probability that some will try to turn their profits at the unjust expense of others. Some fix building facades and spruce up Main Street to impress clients, and some dump hazardous substances in the water. Profit motive in some cases can loosen a dictator's grip, and sometimes bury an oppressed people even farther.
Profit (and many of the concepts linked with it) are things, albeit abstract things. I do not see them as good, or bad, they jut are.
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Ammunition spitting is him, is it, you listening
Littering written, it\\'s in slippers, get the rebel in him
Sticking it with sinners, sizzlin\\' rhythm, verbally hit him
Did he did it, or did he didn\\'t, admit it -
Rugged Man - Give it Up
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Wiglaf
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« Reply #2 on: July 30, 2008, 09:18:24 PM » |
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I would say it is inherently neither. Profits can have very good effects, and they can have very bad effects.
I would say the same about the pursuit of profits. There is an inherent benefit for society with the pursuit of profits. There is also an inherent probability that some will try to turn their profits at the unjust expense of others. Some fix building facades and spruce up Main Street to impress clients, and some dump hazardous substances in the water. Profit motive in some cases can loosen a dictator's grip, and sometimes bury an oppressed people even farther.
Profit (and many of the concepts linked with it) are things, albeit abstract things. I do not see them as good, or bad, they jut are.
I agree. It seems impossible to me that the market can do anything but amplify the desires for good and ill reflected in people's choices. If people don't care that their consumer choices grind the poor, then our companies will do it. If people demand better they'll make such choices and refuse to patronize the worst offenders in the corporate world. This frightens me sometimes , since so many vote with their wallets to objectify women, to try to meet human needs impossible to meet by goods alone because of a clever commercial. |
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. . . sometimes it seems that one has to lean into the wind to stand straight.
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Judge Learned Hand
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Gojira
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« Reply #3 on: July 31, 2008, 09:37:48 AM » |
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I would say it is inherently neither. Profits can have very good effects, and they can have very bad effects.
I would say the same about the pursuit of profits. There is an inherent benefit for society with the pursuit of profits. There is also an inherent probability that some will try to turn their profits at the unjust expense of others. Some fix building facades and spruce up Main Street to impress clients, and some dump hazardous substances in the water. Profit motive in some cases can loosen a dictator's grip, and sometimes bury an oppressed people even farther.
Profit (and many of the concepts linked with it) are things, albeit abstract things. I do not see them as good, or bad, they jut are.
Although I agree with your statement, it wouldn't make sense if such a simple conclusion would stump me for a long time would it? Profit is a neutral concept, can't argue with that. However, a Marxist may disagree. Profit is a fundamental part of the capitalist system, whilst in a Marxist one, profit is inapplicable. Yet the assumption remains the same. The purpose of any economic system is to create added value. If a socialist system could organize itself in such a way that it can offer added value while not using a system of profits as a means to organize it, then in theory, profits are not needed to create added value and therefore makes the use of profits subjective. This is the essential argument made by Marxists and makes a conceptual distinction between the neutral concept of profit, and its relation to the economic system it participates in. There is an inherent perception of profit, and that is what I am trying to understand, not the neutral concept. In addition, I don't think that proposing the neutral concept of externalities to prove profits own neutral position will help your own argument. An externality caused by an economic transaction can be caused whether or not it was in the sake of profit. |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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Gojira
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« Reply #4 on: July 31, 2008, 09:48:48 AM » |
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I would say it is inherently neither. Profits can have very good effects, and they can have very bad effects.
I would say the same about the pursuit of profits. There is an inherent benefit for society with the pursuit of profits. There is also an inherent probability that some will try to turn their profits at the unjust expense of others. Some fix building facades and spruce up Main Street to impress clients, and some dump hazardous substances in the water. Profit motive in some cases can loosen a dictator's grip, and sometimes bury an oppressed people even farther.
Profit (and many of the concepts linked with it) are things, albeit abstract things. I do not see them as good, or bad, they jut are.
I agree. It seems impossible to me that the market can do anything but amplify the desires for good and ill reflected in people's choices. If people don't care that their consumer choices grind the poor, then our companies will do it. If people demand better they'll make such choices and refuse to patronize the worst offenders in the corporate world. This frightens me sometimes , since so many vote with their wallets to objectify women, to try to meet human needs impossible to meet by goods alone because of a clever commercial. The very definition of a business is an organization bent on the pursuit of profit. Here, the definition of profit can mean many things.  Where in this statement says that business should care about the poor? You suggest that customers should not patronize businesses that do not meet their immediate needs but are frightened by the fact that these businesses use advertising to almost create those needs. In this way, you could say, profits help distort our needs through the clever manipulation of our wants? I would say this condition is not a good one when people need a nutritious diet, but instead choose the cheaper, better tasting, with an extra 20% for free, empty calorie candy bar because they want it? I think you see the contradiction here. |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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illy
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Karma: +112/-105
Posts: 1,108
illerino if youre not into the whole brevity thing
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« Reply #5 on: July 31, 2008, 03:48:34 PM » |
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I would say it is inherently neither. Profits can have very good effects, and they can have very bad effects.
I would say the same about the pursuit of profits. There is an inherent benefit for society with the pursuit of profits. There is also an inherent probability that some will try to turn their profits at the unjust expense of others. Some fix building facades and spruce up Main Street to impress clients, and some dump hazardous substances in the water. Profit motive in some cases can loosen a dictator's grip, and sometimes bury an oppressed people even farther.
Profit (and many of the concepts linked with it) are things, albeit abstract things. I do not see them as good, or bad, they jut are.
Although I agree with your statement, it wouldn't make sense if such a simple conclusion would stump me for a long time would it? Profit is a neutral concept, can't argue with that. However, a Marxist may disagree. Profit is a fundamental part of the capitalist system, whilst in a Marxist one, profit is inapplicable. Yet the assumption remains the same. The purpose of any economic system is to create added value. If a socialist system could organize itself in such a way that it can offer added value while not using a system of profits as a means to organize it, then in theory, profits are not needed to create added value and therefore makes the use of profits subjective. This is the essential argument made by Marxists and makes a conceptual distinction between the neutral concept of profit, and its relation to the economic system it participates in. There is an inherent perception of profit, and that is what I am trying to understand, not the neutral concept. In addition, I don't think that proposing the neutral concept of externalities to prove profits own neutral position will help your own argument. An externality caused by an economic transaction can be caused whether or not it was in the sake of profit. I would say that those externalities, good and bad are wrapped up in the perception of profit. Many people will perceive profits in a specific case to be good or bad depending on the how the transactions will affect them. For profits themselves to be non-neutral, numbers themselves need to be either good or bad. Absent the effects that profits have, all they really are is numbers. I think there's a chance I might not be catching your meaning of inherent perception excluding the neutral concept. As to the purpose of any economic system being to add value, I'm not sure I agree with that one. To the extent that I would consider capitalism to have purpose, I would say it would be to create a profit for those involved. While capitalism does create added value, I don't really consider that to be it's purpose, per se. Likewise, with Socialism. Value was already being added at the point the concepts were developed, if socialism were to have a purpose, I might describe it as a more 'equitable' distribution of wealth. |
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Ammunition spitting is him, is it, you listening
Littering written, it\\'s in slippers, get the rebel in him
Sticking it with sinners, sizzlin\\' rhythm, verbally hit him
Did he did it, or did he didn\\'t, admit it -
Rugged Man - Give it Up
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Gojira
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« Reply #6 on: July 31, 2008, 06:23:43 PM » |
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I would say that those externalities, good and bad are wrapped up in the perception of profit. Many people will perceive profits in a specific case to be good or bad depending on the how the transactions will affect them. This is good. But, externalities can happen devoid of any profit maximizing participation. Furthermore, many people don't even know that hundreds of unmeasurable externalities affect them each second. I like that you point to an inherent perception of externalities when associated with profit maximizing activities, but I don't think there is a link between them. I know that when someone doesn't understand why corporation x is dumping sewage on their lawn, they are not picketing the corporate x's office with "stop making profits" but instead "get that crap off my lawn!" Let me revert back to my point. Externalities can also happen during non-profit maximizing transactions. Maybe, always in utility maximizing transactions, but thats another debate. For profits themselves to be non-neutral, numbers themselves need to be either good or bad. Absent the effects that profits have, all they really are is numbers. Does profit necessarily have to be qualified as a quantitative variable? Why not qualitative? I think there's a chance I might not be catching your meaning of inherent perception excluding the neutral concept. It was a bit ambiguous. The neutral concept of profit, in its most simpler form is: Profit = Total Revenue -Total costs That's it. Nothing more, nothing less. Simply neutral. The inherent perception is when someone, without evaluating the situation, will begin an emotional detour after assuming that an arbitrary number is the reason for bringing out mankind's best or worst. As to the purpose of any economic system being to add value, I'm not sure I agree with that one. To the extent that I would consider capitalism to have purpose, I would say it would be to create a profit for those involved. While capitalism does create added value, I don't really consider that to be it's purpose, per se. Likewise, with Socialism. Value was already being added at the point the concepts were developed, if socialism were to have a purpose, I might describe it as a more 'equitable' distribution of wealth. So, do you think that the system exists in order to cater to the individual, or to the system itself? If the purpose of socialism was to create more equitable distribution of wealth, what wealth is there to distribute? The idea of added value is considered as the generation of wealth. |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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illy
Hero Member
Karma: +112/-105
Posts: 1,108
illerino if youre not into the whole brevity thing
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« Reply #7 on: July 31, 2008, 08:04:20 PM » |
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I would say that those externalities, good and bad are wrapped up in the perception of profit. Many people will perceive profits in a specific case to be good or bad depending on the how the transactions will affect them. This is good. But, externalities can happen devoid of any profit maximizing participation. Furthermore, many people don't even know that hundreds of unmeasurable externalities affect them each second. I like that you point to an inherent perception of externalities when associated with profit maximizing activities, but I don't think there is a link between them. I know that when someone doesn't understand why corporation x is dumping sewage on their lawn, they are not picketing the corporate x's office with "stop making profits" but instead "get that crap off my lawn!" Let me revert back to my point. Externalities can also happen during non-profit maximizing transactions. Maybe, always in utility maximizing transactions, but thats another debate. Without the profit (or perceived/projected future profit) the transaction most likely would not take place. To the extent that an actions is taken in the pursuit of profit, I would say that there is a causal relationship between the pursuit of profit (in that instance and that form) and the effect of that action. I think most people see that the toxic water is a result of someone being too cheap to dispose of the waste properly. "Stop being a cheap bastard and actually clean up your mess, screw your bottom line" is practically written between the lines on those picket signs. I would agree that the profit motive is a secondary concern, but most people really don't want to believe (I know I don't) that people are dumping toxic waste into streams just for the hell of it and would do so even if it wasn't cheaper than proper disposal. In common perception, the link is there (usually), much as it is in cases of positive effects. Some discussion of how well the company is doing for themselves has entered into most of the conversations I've heard regarding commercial remodeling projects. I would agree about all externalities not being the result of profit maximizing transactions, but would add that transactions always do have externalities in that there is inevitably an effect. As you point out, they are numerous (I would also say both 'positive' and 'negative', and widely varying in magnitude). This is where the link comes from. For profits themselves to be non-neutral, numbers themselves need to be either good or bad. Absent the effects that profits have, all they really are is numbers. Does profit necessarily have to be qualified as a quantitative variable? Why not qualitative? I think there's a chance I might not be catching your meaning of inherent perception excluding the neutral concept. It was a bit ambiguous. The neutral concept of profit, in its most simpler form is: Profit = Total Revenue -Total costs That's it. Nothing more, nothing less. Simply neutral. The inherent perception is when someone, without evaluating the situation, will begin an emotional detour after assuming that an arbitrary number is the reason for bringing out mankind's best or worst. The number is not the root of it. I would say greed/ambition (two sides of the same coin if you will) is what does it. While we're discussing definitions of 'profit', I think it is interesting to note that in our language profit definitely does have a positive connotation. If only by the meaning as what will be good for someone. Hence the the phrase with one word with two slightly different meanings: "It doesn't profit one to maximize profit at the expense of investment". I suppose the other use (as in bettering one's situation) would be qualitative. In this respect, I guess you could say it is positive, or at least has a positive connotation in our language. As to the purpose of any economic system being to add value, I'm not sure I agree with that one. To the extent that I would consider capitalism to have purpose, I would say it would be to create a profit for those involved. While capitalism does create added value, I don't really consider that to be it's purpose, per se. Likewise, with Socialism. Value was already being added at the point the concepts were developed, if socialism were to have a purpose, I might describe it as a more 'equitable' distribution of wealth. So, do you think that the system exists in order to cater to the individual, or to the system itself? If the purpose of socialism was to create more equitable distribution of wealth, what wealth is there to distribute? The idea of added value is considered as the generation of wealth. The practice of adding value to something (or merely buying it and selling at a different price, which I would argue does not actually add any value) caters to the individual. It often has benefits to the system itself, but I don't go to work every morning to keep the economy going. I go in so that I can make money. The people I work for, I'm sure are happy at the effect our work has on the overall economy, but that doesn't get brought up nearly as much as how it affects the company (the individual in this case). The wealth to distribute would be the same wealth that existed before the socialist minded redistribution, as well as the wealth that is added through activity. I would also clarify that I do agree with the idea of economic systems adding value. I just don't see it as their purpose. It's just one of the things they do (usually). |
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« Last Edit: July 31, 2008, 08:08:43 PM by illy »
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Ammunition spitting is him, is it, you listening
Littering written, it\\'s in slippers, get the rebel in him
Sticking it with sinners, sizzlin\\' rhythm, verbally hit him
Did he did it, or did he didn\\'t, admit it -
Rugged Man - Give it Up
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IamMe
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« Reply #8 on: August 01, 2008, 12:59:37 PM » |
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Dealing with the OP, I don't agree that Socialism (of which Marxism is only one school) sees profit as inherently bad. It depends on what you mean by profit. Individual profit is bad as it creates an imbalance in wealth and power but there can also be collective profit from which everyone benefits.
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\\\\"Anarchism is the ideal to which all societies should approximate\\\\" - Bertrand Russell
If you strike me down I shall become more dead than you can ever imagine.
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Gojira
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« Reply #9 on: August 01, 2008, 11:14:16 PM » |
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Dealing with the OP, I don't agree that Socialism (of which Marxism is only one school) sees profit as inherently bad. It depends on what you mean by profit. Individual profit is bad as it creates an imbalance in wealth and power but there can also be collective profit from which everyone benefits.
How would collective profit, as you classify it, be created and then distributed? I don't think you would have to assume that this collective profit was something derived only in a socialist economic system because I would like to think that profit is a concept that can be applicable (or non-applicable) in any economic system. I would like to see where my question goes first though. Illy, I have been busy. Will try and get to posting a response soon enough. |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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IamMe
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« Reply #10 on: August 02, 2008, 01:34:20 PM » |
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Dealing with the OP, I don't agree that Socialism (of which Marxism is only one school) sees profit as inherently bad. It depends on what you mean by profit. Individual profit is bad as it creates an imbalance in wealth and power but there can also be collective profit from which everyone benefits.
How would collective profit, as you classify it, be created and then distributed? I don't think you would have to assume that this collective profit was something derived only in a socialist economic system because I would like to think that profit is a concept that can be applicable (or non-applicable) in any economic system. I would like to see where my question goes first though. Illy, I have been busy. Will try and get to posting a response soon enough. Well, you defined profit above as revenue - cost. So, taking money out of the equation that would be the value (or utility) of the finished product minus the costs (raw materials, labour etc). It is created by converting raw materials into to something useful that the collective can benefit (i.e. profit) from. Distribution would be done according to effort and sacrifice. |
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\\\\"Anarchism is the ideal to which all societies should approximate\\\\" - Bertrand Russell
If you strike me down I shall become more dead than you can ever imagine.
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Gojira
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« Reply #11 on: August 03, 2008, 05:17:57 PM » |
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Dealing with the OP, I don't agree that Socialism (of which Marxism is only one school) sees profit as inherently bad. It depends on what you mean by profit. Individual profit is bad as it creates an imbalance in wealth and power but there can also be collective profit from which everyone benefits.
How would collective profit, as you classify it, be created and then distributed? I don't think you would have to assume that this collective profit was something derived only in a socialist economic system because I would like to think that profit is a concept that can be applicable (or non-applicable) in any economic system. I would like to see where my question goes first though. Illy, I have been busy. Will try and get to posting a response soon enough. Well, you defined profit above as revenue - cost. So, taking money out of the equation that would be the value (or utility) of the finished product minus the costs (raw materials, labour etc). It is created by converting raw materials into to something useful that the collective can benefit (i.e. profit) from. Distribution would be done according to effort and sacrifice. If I didn't know any better that would sound like business to me...  |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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Gojira
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« Reply #12 on: August 03, 2008, 07:05:33 PM » |
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Without the profit (or perceived/projected future profit) the transaction most likely would not take place. To the extent that an actions is taken in the pursuit of profit, I would say that there is a causal relationship between the pursuit of profit (in that instance and that form) and the effect of that action. Interesting. Are you suggesting that in order to maximize one's own benefit through any economic transaction is that they keep some idea of profit in mind? Now thats the stuff I am talking about. Consider a simple situation in which befere you enter a place with someone behind you. If you were a person who feels that a kind and manner driven society should entice you to leave open the door and let the person behind you go in before you, then you would find your self in this very situation. The act of kindness is the revenue generated, or, the reception of value. Consider a "thank you" to be "a better than expected earning." Your cost is the actual thought, time and motion it took to do the deed and the profit is of course, your own satisfaction that you did something for someone else. When you think about that situation though, you might say to your self, where is the inherent perception of profit? From an individual who proposed the transaction, profit is definitely a good thing from that individual's own perspective. The problem with this argument is that it leads to your original "grey area" comment which can not explain why so many people question profits inherent quality. Or that traditional principles of economics suggest that transactions like these do not include profit but are just utility maximization problems. But thats just semantics, and the question still remains. I think most people see that the toxic water is a result of someone being too cheap to dispose of the waste properly. "Stop being a cheap bastard and actually clean up your mess, screw your bottom line" is practically written between the lines on those picket signs. I would agree that the profit motive is a secondary concern, but most people really don't want to believe (I know I don't) that people are dumping toxic waste into streams just for the hell of it and would do so even if it wasn't cheaper than proper disposal. In common perception, the link is there (usually), much as it is in cases of positive effects. Some discussion of how well the company is doing for themselves has entered into most of the conversations I've heard regarding commercial remodeling projects.
I would agree about all externalities not being the result of profit maximizing transactions, but would add that transactions always do have externalities in that there is inevitably an effect. As you point out, they are numerous (I would also say both 'positive' and 'negative', and widely varying in magnitude). This is where the link comes from. Even so, the picketers are not questioning the motive of profit, but just the corporations own motive for profit. Its not like they will then make a nationwide campaign to promote the end of profit because of their said experience with corporate x. For profits themselves to be non-neutral, numbers themselves need to be either good or bad. Absent the effects that profits have, all they really are is numbers. Does profit necessarily have to be qualified as a quantitative variable? Why not qualitative? I think there's a chance I might not be catching your meaning of inherent perception excluding the neutral concept. It was a bit ambiguous. The neutral concept of profit, in its most simpler form is: Profit = Total Revenue -Total costs That's it. Nothing more, nothing less. Simply neutral. The inherent perception is when someone, without evaluating the situation, will begin an emotional detour after assuming that an arbitrary number is the reason for bringing out mankind's best or worst. The number is not the root of it. I would say greed/ambition (two sides of the same coin if you will) is what does it. While we're discussing definitions of 'profit', I think it is interesting to note that in our language profit definitely does have a positive connotation. If only by the meaning as what will be good for someone. Hence the the phrase with one word with two slightly different meanings: "It doesn't profit one to maximize profit at the expense of investment". I suppose the other use (as in bettering one's situation) would be qualitative. In this respect, I guess you could say it is positive, or at least has a positive connotation in our language. It certainly has a positive connotation in my mind. But if it was inherent, there shouldn't be a question of its benefit. As we know, profit does not have to exist (in theory) in an economic system in order for that system to pursue its purpose, whichever that purpose may be. As to the purpose of any economic system being to add value, I'm not sure I agree with that one. To the extent that I would consider capitalism to have purpose, I would say it would be to create a profit for those involved. While capitalism does create added value, I don't really consider that to be it's purpose, per se. Likewise, with Socialism. Value was already being added at the point the concepts were developed, if socialism were to have a purpose, I might describe it as a more 'equitable' distribution of wealth. So, do you think that the system exists in order to cater to the individual, or to the system itself? If the purpose of socialism was to create more equitable distribution of wealth, what wealth is there to distribute? The idea of added value is considered as the generation of wealth. The practice of adding value to something (or merely buying it and selling at a different price, which I would argue does not actually add any value) So now there is a question of how exactly value is added caters to the individual. and who benefits from it. It often has benefits to the system itself, but I don't go to work every morning to keep the economy going. I go in so that I can make money. The people I work for, I'm sure are happy at the effect our work has on the overall economy, but that doesn't get brought up nearly as much as how it affects the company (the individual in this case).
The wealth to distribute would be the same wealth that existed before the socialist minded redistribution, as well as the wealth that is added through activity. I would also clarify that I do agree with the idea of economic systems adding value. I just don't see it as their purpose. It's just one of the things they do (usually).
I would say that the assumption of an economic system's purpose being to add value is made in an attempt to suggest that an economic system needs to add value. Maybe the purpose isn't clear cut, but I feel that adding value has a very important relationship to what it tries to specifically achieve. Some indicators of added value are growth, productivity and investment. However, only the three can be generated through the use of added value. Population growth creates a constraint on the overwhelming demand of goods and services that can not be offered to all and added value is needed to support our growing tastes and preferences. Maybe the purpose of an economic system could be the the increase, equalization and/or support of the individual's well-being that helps drive the system, but the only way to accomplish this would be through adding value. What "adding value" is might have to be specifically defined. |
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Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
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IamMe
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« Reply #13 on: August 04, 2008, 01:57:37 PM » |
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Dealing with the OP, I don't agree that Socialism (of which Marxism is only one school) sees profit as inherently bad. It depends on what you mean by profit. Individual profit is bad as it creates an imbalance in wealth and power but there can also be collective profit from which everyone benefits.
How would collective profit, as you classify it, be created and then distributed? I don't think you would have to assume that this collective profit was something derived only in a socialist economic system because I would like to think that profit is a concept that can be applicable (or non-applicable) in any economic system. I would like to see where my question goes first though. Illy, I have been busy. Will try and get to posting a response soon enough. Well, you defined profit above as revenue - cost. So, taking money out of the equation that would be the value (or utility) of the finished product minus the costs (raw materials, labour etc). It is created by converting raw materials into to something useful that the collective can benefit (i.e. profit) from. Distribution would be done according to effort and sacrifice. If I didn't know any better that would sound like business to me... Define business. |
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\\\\"Anarchism is the ideal to which all societies should approximate\\\\" - Bertrand Russell
If you strike me down I shall become more dead than you can ever imagine.
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