Friday, September 7, 2012

Democrats: Let's Ban Profits

This is one of the scariest videos I've seen in a while.  I'm not trying to bash Democrats...I would be just as appalled if this were Republicans.  I have no party affiliation.  People really don't understand the source of profits.  See comments after video:




Profit is value created for society.  In order to make a profit, corporations have to sell the product for more money than it costs to produce.  Firms must pay their inputs their respective opportunity costs in production. That's economist talk for "you have to pay people to work for you and you have to buy your materials."  The people will not work for you if you do not pay them as much as they could earn elsewhere.  Nobody will sell you material if you won't pay as high a price as some other person.  Therefore, the inputs are valued by society at the price that corporations pay for them.  The finished product is valued by society at its sale price (or more).  Therefore, profits are a MINIMUM amount of value created for society.
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