I have finally finished something that I have been meaning to do for about a year. Economists talk about profit all the time but people do not understand the difference between economic profit and accounting profit. That leads to misunderstandings and accusations of exploitation, etc. I encourage you to read it and let me know what you think. I hope it’s pretty straightforward, but I want to know if I didn’t explain something well. It has the rather pedestrian title of Profit is important! It’s under my rational choice menu to the right, or you can just click
While I was writing it, I had a brainstorm on why so many people cling to the idea of wealth being a zero sum game. While any given transaction is indeed zero sum (the more money I pay, the more you get and the less I have), that does not translate into how the economy generates wealth. Just like the confusion between accounting profit and economic profit, the confusion between money and wealth befuddles many people. I’ll put up another essay (I’m sure you’re all holding your breath) about that later. I better get to bed…
Isaac
tags technorati : economics profit why greed corporate accounting unfair trade globalization exploitation