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Cretinous economics

Most actual profit, i.e. reward in excess of effort expended, in the modern economy comes from exploitation, whether of natural resources, monopoly power, rents or the exploitation of people, many of whom will require state subsidy to simply make their lives possible as a result.

There are two possible and useful definitions of profit.

1) The excess of value created over the costs of the inputs.

2) The portion of 1) that the captialists manage to appropriate. In a market economy this is always a pretty small proportion – most of it ends up in hte consumer surplus, the value enjoyed by consumers but which they don’t have to pay for.

1) is the thing we desperately want to happen. 2) we want to happen only to the extent that it encourages lots and lots of 1).

Both are, of course, wildly different from the dreams of the potato.

8 thoughts on “Cretinous economics”

  1. Standard Marxist claptrap no doubt culled from the Childrens Guide to Das Kapital or something one of those Naomi women wrote.

  2. So someone provides you with a job where you do meaningful work, learn new skills and get paid money with which you can support your family and buy nice things. This makes you exploited. Also maybe if the government didn’t help itself to over half of people’s earnings the less well paid would be able to get by on their own incomes.

  3. “ reward in excess of effort expended”

    Is he trying to invent the concept of economic rents?

  4. Person in Pictland

    “dreams of the potato” There’s the title of that book you want to write. Or if you want to make it sound a bit Australian, “Potato Dreamtime”. Or American, “Idahoic Delusions”. Or French, “Pomme de Terrible”.

  5. Martin Near The M25

    “… reward in excess of effort expended”

    @RichardT I think it’s the Labour Theory of Value he’s reinventing. IOW the less productive you are the more the things you make are worth.

  6. This definition exists solely so the tuber can feel good about himself.

    You see, he wasn’t terrible at business, he just wasn’t prepared to exploit people.

    It has no meaning in the real world. The one where he complains of high unemployment. Linking the need for profit in order to want to “exploit” people is too deep for him.

  7. Cretinous use of the English language. Exploitation doesn’t have any value attached to it. We’d go pretty hungry if farmers didn’t exploit the land to grow crops. He isn’t going to get his cherished Net Zero unless mineral reserves are exploited to provide the means. To assign a negative value he needs to examine each of the instances he’s listed & explain why. That’d keep him fully occupied for a month or three.

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