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Quotation of the Day…

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… is from pages 58-59 of Arnold Kling’s fine new book, Specialization and Trade: A Re-introduction to Economics [2]:

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 [3] – 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 [4] of those entrepreneurs and business owners who perform these great services.