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.
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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