While this article may come off as being political, that is not my intent. It is election season in the USA, and things can get a little heated if you delve into politics. That is why I like to avoid the topic, for the most part.
I am going to show a video here in this article. The video was shot at the ongoing Democratic National Convention (DNC) in Charlotte, NC. In the video, delegates and others at the DNC are interviewed by a radio personality and asked about corporate profits. Surprisingly, almost all who are interviewed say that profits should be banned, or at least capped. Now, I would admit that people who gave a more credible answer were probably edited out of the video, and I sincerely doubt that all respondents called for a banning of profits.
Frankly, it does shock me that even a few people would think like this. Earning a profit is the reason why companies go into business at all. People invest serious amounts of money to start a business. In the case of companies in major industries like steelmaking, automobiles and such, billions of dollars are invested. These companies must recover their investments, and also if no profit is allowed, why risk your money in the first place?
Another thing that I found startling about this video is that the folks who are responding don’t seem to realize that it is corporate profits that fund their retirements and such. For example, a teacher’s union in California may well be invested in a steel company in Pennsylvania, an automobile company in Detroit, etc. They invest in these companies through the stock market, and the profits from these companies are what pays the retirement funds of the teachers, firefighters and such in California and all around the USA. Without profits for the companies, such retirements would have no money at all!
Anyway, I do not mean this as “look at the Democrats, look how stupid they are.” The fact is that the video was shot at the DNC, so that is what I had to use. I suspect that if you went down to the grocery store in Anytown, USA, you would get similar answers from many of the “everyday” folks shopping there.
Wake up, folks! Profit is good if it is earned in a legitimate way. If there is cheating, stealing and such going on, then those profits are not legitimate, but the question asked of these folks was about profit, not unfair practices. Profit and the ability to make a profit on your work and business is what made America the country it is today. Oh… scratch that… it is what made America the country it was 10 or 15 years ago! 😉
Well put, I see this on FB a whole lot and my guess is you are correct, a great number of people would be okay with capping profits. I think everyone should attempt on their own or with a small group of friends some sort of private enterprise on their own (going to work for someone else does not count). We did such a thing some years ago selling Lumpia & BBQ at local fairs and farmer’s markets. I had a good grasp of the economics involved from a theoretical point of view but it was really neat seeing them in practice. Raising our prices slowed business down but did not change our take, that was a very valuable lesson in and of itself.
Am hoping to tie that project up and send the earnings to worthy causes in the Philippines.
Also, good cautionary about the editing.
Thanks, Mark. You mentioned something that had not really occurred to me, and that is that a lot of people have never owned a business. Because of that, it is somewhat understandable why these folks do not understand the basics of what a business is all about.
Profit is not a black and white subject, In UK oil companies are being looked at as they put up prices as soon as price of crude goes up, fair enough but for some reason the price takes much longer to come down (if it comes down) when the price of crude comes down.
Companies have to make profit to re-invest, pay share-holders, pay workers and pay taxes, a company will have no future if it does not invest, without taxes you have no civilisation, also what is a fair profit ?, as much as the market allows.
The Country through the raising of taxing, companies,individuals and through spending, in a Democracy decides how to spend and raise taxes. Without taxes you have no Army, no Police, no infrastructure, and in some countries no free Health-Care like in the much loved NHS in the UK ( not really free but paid for out of taxes). Also corporate greed, is a thorny issue, where boards of companies can pay themselves millions and the workers should think themselves lucky to be in a job or get a pay raise around the inflation rate. There is no wrong or right answer on this only your personal point of view. In my view there are very greedy selfish individuals on the right, and misguided individuals on the left who expect something for nothing.
Hi Gerry, but the video was about people calling for the banning of all profit, which is just rediculous.
Hi Bob, no profit no money to spend to make the world go round. I dont know how this item was edited. Its very easy for the media to twist what was being said, I believe that these poeple were answering tongue in cheek.
Many a time I have said shoot all politicians all ceo’s and any body connected with any religion…..but its said in jest or tongue in cheek and not meant.
yes, Gerry, we do not know about the editing, no doubt.
The point of your article is a given and absolutely correct. Profits are the reason for business. I was a staunch republican for many years but have mellowed since. I now lean more to the middle of the road. The editing in the video was obvious and blatant so I would bet there many of those interviewed are now saying “I didn’t say that” or “that isn’t what i meant” However, many less affluent or dare I say less educated look at the huge corporate profits, especially when others are hurting, as obscene. I for one place a lot of blame on the large banks and brokerage houses causing the collapse housing market and the industry. Since I was part of that industry it was especially painful.
On the other hand business can not operate without profit and capping profit isn’t fair unless you cap losses as well. They didn’t mention that though. I think the danger of larger corporations, though, isn’t how much the earn rather It’s what they do with what they earn. The large corporations buy other large corporations and create huge monopolies creating unfair trading advantages and by doing so limit choices for the “common” folk. It’s easy to see why many do not trust the large businesses. I would be in favor of strengthening the anti-trust laws in the USA and around the world. As far as profit,,, let ’em earn as long as they do it in a manner that isn’t harmful to someone else ( as in their customers ).
I’m with you.
Oh, Rex, you made a good point that I did not even consider… if profits are capped, then losses should be too. either way you go, it is not a free market!
Good point there!
The only non for profit companies should be Charities.
I would tend to agree on that, Gerry!