Monday, May 23, 2016

Capitalism Is Not About Greed

From The Wall Street Journal, "Dear Grads, You Need a P&L: Even if you don’t like capitalism, you’d better draw up a personal profit-and-loss statement if you want to change the world." by Andy Kessler:
When I buy something from you (assuming you’re not a rent-seeking crony capitalist), your profit is how much I am willing to pay over what it costs to produce the item. In a truly competitive world, your profit is the value of my delight in your invention, or I’d simply make the thing myself. To put it in Facebook speak: Your profit is the social value of the transaction. Profits create wealth not only for you but for the collective “me” of society.
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Hollywood movies notwithstanding, capitalism is not about greed. It is a system that weeds out dumb ideas from smart ones. The former generate disdain and losses; the latter generate delight and profits.

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