"Profits decide what articles will be made and in what quantities. If there is no profit in making an article, it is a sign that the labor and capitol devoted to its production are misdirected."
In our final review segment covering the last six chapters of Henry Hazlitt's Economics in One Lesson, I decided to focus on Chapter XXII because of the negative reputation of the word *profits*. It goes along with the adjective *greedy* always preceding *capitalist*.
Bad-mouthing profits is a tell-tale sign highlighting the lopsided viewpoint of the speaker when s/he denigrates the principles involved in a free market economy. Not only is it indicative of a socialist upbringing, but also it may mean that s/he has trouble with the Tenth Commandment (covetousness) in the sense that someone is jealous of what the other has (profits).
Truly over half of newly-started businesses fail in their first five years because the owners dont practice sound fiscal policy. In the business of rearing a child (family), it is clear that the first five years create an indelible impression which plays out in the rest of an individual's life. Perhaps in both cases, the function of profits is not understood.
to put constant and unremitting pressure on the head of every competitive business to introduce further economies and efficiencies.
That phrase is full of dirty words like *pressure*, *constant*, *unremitting*, *competitive* - all qualities and virtues hard to find in today's economy/society. Nevertheless these negative aspects are integral parts of the balanced equation. Profits are supposed to stimulate!
Personally I wonder about the integrity of the business owner (or salesman or head of family) who tries to hide the fact that he's making a profit. Why would I want to buy from someone who isnt trying to succeed (earn a living). Furthermore, I question his common sense (or lack thereof), which Mr. Hazlitt plainly states, comes to the surface when one looks in depth at economics.
That is the reason that Cindy and the rest of us can and should be conversant in economics. It's vital to the health of our families.
Cindy has been an entertaining enzyme who has added an economic stimulus to the package of daily living for many of us.
Unwittingly she has grasp the premium of profits and demonstrated her understanding of the value of resources that must be used in production of her business (family).
Double check that your labor and capital are not misdirected.
So, Cindy! Thanks for spearheading these economic lessons.
Now let's capitalize on the profits.