{"id":547,"date":"2011-02-23T18:18:25","date_gmt":"2011-02-23T23:18:25","guid":{"rendered":"https:\/\/hushbeck.com\/blog\/?p=542"},"modified":"2011-02-23T18:18:25","modified_gmt":"2011-02-23T23:18:25","slug":"profits-ii","status":"publish","type":"post","link":"https:\/\/hushbeck.com\/blog\/2011\/02\/profits-ii\/","title":{"rendered":"Profits II"},"content":{"rendered":"

In part I<\/a>, I addressed the left\u2019s attack on the profits of \u2018Big\u2019 business.\u00a0\u00a0\u00a0 Yet the left has a far more fundamental objection to profits, even profits that would otherwise be considered reasonable.\u00a0 Profits result when the amount paid is greater than the cost. Thus from the left\u2019s perspective, they are always inherently wasteful at best.<\/p>\n

This is what is behind the push for single payer health care. Since government does not need to earn a profit, it should be able to deliver better health care for a lower cost.\u00a0 If everything were static, this would be true. Government could just do whatever a for-profit company was doing, and the money that was being earned in profits could be used by government to reduce costs, or to provide better health care.\u00a0 This is what is behind the complaint that it is wrong to profit off of other peoples\u2019 illnesses. (Ignoring, of course, that Doctors, Nurses, and many other profit, i.e., get paid, in the process.)<\/p>\n

The problem, however, is that the economy is not static, or at least it better not be, otherwise we would have a recession, or worse.\u00a0 A strong economy is a dynamic economy and the driving force for the dynamism is profit.<\/p>\n

A clear example of this can be seen in the history of John D Rockefeller<\/a>.\u00a0\u00a0 While he is best known as the man behind Standard Oil, Rockefeller was a rich and successful man before he even got into the oil business.\u00a0 In fact, he would have met the left\u2019s definition of someone who had all the money he needed.\u00a0 Thankfully, however, when someone at his church approached him with an idea about investing in the then emerging oil business, he did not say \u201cwhy would I need any more money?\u201d but instead decided to invest.<\/p>\n

Rockefeller approached the oil business, as a businessman seeking to make a profit.\u00a0 He did not just ask, \u2018how can we do this?\u2019 he asked \u2018how we can do this better?\u2019\u00a0 While all businesses exist to make a profit, it is the paradox of business that if profit is a business\u2019 sole goal, it will not be in business long.\u00a0 This is because customers want goods and services, not for the business to make a profit.\u00a0 Thus to make a profit, a business must provide goods and\/or services that customers wants to purchase, at a price they can afford,\u00a0 and still have money left over for profit, all while doing a better job than the competition.<\/p>\n

This is not an easy task, and it is why most businesses fail. More importantly, it is a never ending task.\u00a0 Even if a business succeeds, what they are doing that makes them successful will soon be copied by others and perhaps even improved upon.\u00a0 Thus to remain profitable, businesses must constantly be searching for new and better ways to deliver their goods and services at a cheaper cost.\u00a0 Those that don\u2019t will begin to lose market share, and may even go out of business. This is why some business giants of the past are no longer around.<\/p>\n

So when Rockefeller entered into the oil market, his goal was to provide the best product he could at the lowest price.\u00a0 He built better refineries and developed his own delivery system. He also spent money on research to discover what to do with all the gunk left over from the refining process.\u00a0 As a result, he developed over 300 by-products from what used to be thrown away or dumped into rivers.<\/p>\n

Today we mainly know the results of his effort in that he became one of the richest men in America.\u00a0 But he did not become rich because people just wanted to make him rich. He became rich because of the vast improvement his work and investment brought about.\u00a0\u00a0 For example, prior to the changes he brought to the oil business, only the rich could afford to light their homes at night.\u00a0 When Rockefeller drove down the cost of oil \u201cfrom 58 cents to eight cents a gallon<\/a>\u201d suddenly millions could afford the new luxury of having light at night.<\/p>\n

This is the dynamism that the profit motive brings to the economy; a dynamism government simply cannot match. Government does not innovate, it regulates, and regulation kills innovation.\u00a0\u00a0 While the profit motive drives businesses to deliver \u2018the best at the lowest cost,\u2019 government had little concern for cost.<\/p>\n

In fact, the driving force for government is in the opposite direction.\u00a0 Government agencies that do seek to drive down costs are \u2018punished\u2019 with lower budgets, because \u201cthey did not need the money.\u201d It is the rare bureaucrat that wants to see their budget cut.\u00a0 On the other hand, agencies that are inefficient and wasteful often have their inefficiency rewarded with increased budgets.<\/p>\n

The profit margin is vital for creating a dynamic and growing economy, an economy that is constantly seeking innovations that will deliver the best goods and services at the lowest price.<\/p>\n

Attacks on the profit motive are nothing less than attacks on the very thing that has so vastly improved our standard of living.<\/p>\n","protected":false},"excerpt":{"rendered":"

In part I, I addressed the left\u2019s attack on the profits of \u2018Big\u2019 business.\u00a0\u00a0\u00a0 Yet the left has a far more fundamental objection to profits, even profits that would otherwise be considered reasonable.\u00a0 Profits result when the amount paid is greater than the cost. Thus from the left\u2019s perspective, they are always inherently wasteful at […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[13,24],"tags":[207,1998,595,2003,678,778,791,799,971,1043,1080,1090,1120,1177,1203,1204,1209,1361],"class_list":["post-547","post","type-post","status-publish","format-standard","hentry","category-economy","category-liberal","tag-bureaucrat","tag-economy","tag-government","tag-health-care","tag-innovation","tag-left","tag-liberals","tag-light","tag-paradox-of-business","tag-profits","tag-recession","tag-regulation","tag-rockefeller","tag-single-payer","tag-standard-of-living","tag-standard-oil","tag-static-dynamic","tag-wasteful"],"yoast_head":"\nProfits II - Politics and Religion<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hushbeck.com\/blog\/2011\/02\/profits-ii\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Profits II - Politics and Religion\" \/>\n<meta property=\"og:description\" content=\"In part I, I addressed the left\u2019s attack on the profits of \u2018Big\u2019 business.\u00a0\u00a0\u00a0 Yet the left has a far more fundamental objection to profits, even profits that would otherwise be considered reasonable.\u00a0 Profits result when the amount paid is greater than the cost. 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