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Antiwork

Redefining Profit

The core problem with our society (and why we can't seem to get good leaders) is that we value profit. I think that a conversation can be had about redefining what profit means. When an investor hears the words “a company has high profits” they invest in it. However, when a regulator hears the words “a company has high profits” they need to look into that company. Here is why. In a perfectly functioning market, the cost of ANY good from houses to generic drugs would be driven down by competition. The perfectly functioning market would have 0 profits. All goods would be the cost of labor plus the cost of materials, advertisement, storage and transport split out among all goods sold. 100% of all produced goods would be sold, there would be 0 waste, and 0 profit. In other words, profitability is a measure of how inefficient the markets…


The core problem with our society (and why we can't seem to get good leaders) is that we value profit. I think that a conversation can be had about redefining what profit means. When an investor hears the words “a company has high profits” they invest in it. However, when a regulator hears the words “a company has high profits” they need to look into that company. Here is why.

In a perfectly functioning market, the cost of ANY good from houses to generic drugs would be driven down by competition. The perfectly functioning market would have 0 profits. All goods would be the cost of labor plus the cost of materials, advertisement, storage and transport split out among all goods sold. 100% of all produced goods would be sold, there would be 0 waste, and 0 profit.

In other words, profitability is a measure of how inefficient the markets are. If this idea percolated into the highest levels of business, the highest levels of politics, and society in general we could do something about it. Companies should be boycotted based on their profitability. This naturally creates niches for competition to those abusive companies.

Here is an example. If everyone boycotted the most profitable online retailers, it would open up room for other online retailers, and make the lives of those working for the largest online retailer easier. What is the largest online retailer? Oh, right. Amazon. The big bad. Without even naming the retailer for their abusive practices, we can use the simple metric of profit as a north star for what businesses need to be boycotted.

Profit also can be used to detect monopolistic behavior. ALL monopolies are profitable. The problem is that profit is good for investors, and people who make it into congress usually have a past of being investors at some point. But by looking at the market as a system, and profit as an ineficiency, we can take a step back, and reframe the problems of fairness, equality, and human need (which many politicians don't care about) to a systems problem of market efficiency. The dry argument that profit is indicative of market inefficiencies and monopolistic behavior is far far more effective than a picture of a child starving to these people.

A market inefficiency means that there is greater work that can be captured by a society. Imagine for a moment if all the profits that were captured by rent seeking landlords were to instead be redirected into space exploration? Or curing cancer? Or stopping heart disease? What about gene therapy that can stave off age related disease? This is the waste that they care about. Not a starving child. But the profit= inefficiency argument resonates with them, and aligns them to take actions that meet our goals for their own demented reasons. And if they can do the right actions for the wrong reasons, I can live with that.

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