Profits in a Market Economy

When a firm’s revenue is greater than its costs, that firm earns a profit. When a firm’s costs are greater than its revenue, that firm suffers a loss. Fair enough. But what do profits and losses mean? Are they the product of blind chance? What useful information can possibly be contained in profits and losses? Contrary to public opinion, profits do not embody “exploitation” of laborers or customers. Profits embody information in the form of a lucrative reward for the entrepreneur or capitalist who is able to combine labor, capital goods, and other inputs in such a way as to produce an output that consumers value more highly than they value the inputs in another configuration.

Ron Paul: Mr. Republican

A relentless theme in the commentary on Ron Paul is that he is not really a Republican, mainly because he dissents from the party on foreign policy. People now associate the Republican Party with crazed war-mongering, massive military spending, and relentless conflict-seeking, to the point even of a messianic global crusade on behalf of American imperial control.

Mister Republican

A relentless theme in the commentary on Ron Paul is that he is not really a Republican, mainly because he dissents from the party on foreign policy. People now associate the Republican Party with crazed war mongering, massive military spending, and relentless conflict seeking, to the point even of a messianic global crusade on behalf of American imperial control.

Live by the Sword...

Am I unlibertarian for hoping this guy wins? I mean, live by the sword, die by the sword, right? These companies clearly actively pursue, support, and employ government monopolies (patents) and use them to squelch competition. If this happens to violate federal anti-trust law, is this a tragedy?

Easy Money, Easy Lies

Strange how campaign season leads to the usual political drama over taxes. Republicans have learned the hard way that they should never raise them, at least not in ways that are noticeable. They accuse Democrats of plotting secret increases. The Democrats deny it but draw attention to mounting debt and hint that solving the problem will require serious measures. These serious measures might involve sacrifice. The voters are suspicious. And so the battle lines are drawn.

Subscribe to