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Quotation of the Day…

… is from pages 58-59 of Arnold Kling’s fine new book, Specialization and Trade: A Re-introduction to Economics:

51rtdef-nblProfits are a measure of the sustainability of patterns of specialization.  When a business that participates in a pattern of specialization earns a profit, the value of its output is greater than the cost of its inputs.  That outcome indicates that the business is making a positive contribution to consumer well-being.

DBx: The truth of this observation reveals as meaningless and silly that popular trope of the political left, “People before profits!”  Not only are profits earned only by people – and not only is nearly all of the value of profitable innovations captured by the general public in their role as consumers – but in market economies the only people who profit are those who serve other people well.  And the better other people are served, the higher are the profits of those entrepreneurs and business owners who perform these great services.