Entrepreneurial Profit and Loss

Profit, in a broader sense, is the gain derived from action; it is the increase in satisfaction (decrease in uneasiness) brought about; it is the difference between the higher value attached to the result attained and the lower value attached to the sacrifices made for its attainment; it, in other words, yield minus costs. To make profit is invariably the aim sought by any action. If an action fails to attain the ends sought, yield either does not exceed costs or lags behind costs. In the latter case the outcome means a loss, a decrease in satisfaction.

Enter the Central Bank

Excerpt from The Case Against the Fed

Central Banking began in England, when the Bank of England was chartered in 1694. Other large nations copied this institution over the next two centuries, the role of the Central Bank reaching its now familiar form with the English Peel Act of 1844. The United States was the last major nation to enjoy the dubious blessings of Central Banking, adopting the’ Federal Reserve System in 1913.

Loan Banking

Government paper, as pernicious as it may be, is a relatively straightforward form of counterfeiting. The public can understand the concept of “printing dollars” and spending them, and they can understand why such a flood of dollars will come to be worth a great deal less than gold, or than uninflated paper, of the same denomination, whether “dollar,” “franc,” or “mark.” Far more difficult to grasp, however, and therefore far more insidious, are the nature and consequences of “fractional-reserve banking,” a more subtle and modern form of counterfeiting.

The Rate of Interest

1. The Phenomenon of Interest

It has been shown that time preference is a category inherent in every human action. Time preference manifests itself in the phenomenon of originary interest, i.e., the discount of future goods as against present goods.

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