Quotation of the Day…

by Don Boudreaux on July 2, 2012

in Complexity & Emergence, Creative destruction, Economics

… is from page 389 of E.C. Pasour’s article “Monopoly Power, Taxation, and Entrepreneurship,” which is Chapter 14 in the 1986 volume, edited by Dwight Lee, Taxation and the Deficit Economy:

[S]ince profits and losses reflect the success or failure of the entrepreneur in adjusting production to consumer demand, the profits of a competitive (in the Austrian sense) industry can never be “too high” or “too low.”

Right.  To disparage profits earned in competitive markets is to disparage success at arranging for resources to serve consumers well; and to disparage unusually high profits is to disparage success at arranging for resources to serve consumers unusually well.

Put differently, to disparage unusually high profits is to imply that society is harmed whenever entrepreneurs and businesses rescue it from uses of resources that are especially wasteful compared to new, highly profitable uses.

Sadly, though, because such disparagement scores political points with many who are economically unaware – or who embrace envy as a sound justification for public policy – there’s always an abundance of politicians willing to issue such disparagements.

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