People vs. profits?

Occupy Wall Street

I saw a young man carrying a sign that read: "People before profits." The guy had joined "Occupy Chicago" crowd, chanting passionately against the greed of the wealthiest 1 percent of his fellow Americans. It is unlikely that many of the protestors are foolish enough to claim that Gates and Buffett are guiltier of covetousness than plumber Joe or nurse Jane. But I wish that the Occupy Wall Street supporters were better educated on the functioning of our capitalist society.

If only they would take a few minutes to read a single page in an introductory economics textbook, they could understand that all the comforts of their lives come from many generations of entrepreneurs striving after profits and trying to avoid losses. Once they figure out that the gain of the producer in an unhindered market is a function of his ability to increase the enjoyment of the consumer, they could move their protests to Washington where our elected servants are busy writing rules that reward mediocrity and prevent the adjustment of supply to meet actual demand.

The tragic mistake that keeps the "Occupiers" barking up the wrong tree is that they do not see profits as a result of creation of new wealth but of its redistribution. When you observe some people getting super rich from their investments while others are losing their savings, homes, and jobs, it is tempting to jump to the conclusion that the former comes at the expense of the latter. While this is true for government activities such as warfare and taxation, in a system based on voluntary exchanges, the entrepreneur can only make a profit by making many human beings better off.

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When a politician is using the powers delegated to him to go after a company that sells water, food, and gasoline at temporarily obscene profits in a hurricane stricken area, he receives the admiration of the uneducated public. Instead, he should be voted out of office for decreasing the number of companies who choose to take the risks of bringing the necessary supplies to the suffering. As Ludwig Von Mises could point out, the gain of the entrepreneur is not the outcome of the natural disaster, "but the aid he gives to those afflicted."

Alex Tokarev
Alex Tokarev

Alex is the chair of the Department of Business at Morthland College in West Frankfort, Ill., and teaches at Northwood University in Midland, Mich. The native of communist Bulgaria fanatically supports the Bulgarian soccer team, Levski.


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