A Paean to Profit

Profit is vital to our collective social prosperity and wellbeing yet today is maligned as an unmitigated evil. Most people seem to think that it is simply not possible for any human being to legitimately earn a billion dollars, let alone tens or hundreds of them. Moreover, it is utterly inconceivable to many that any single human being could amass such a fortune by contributing something socially beneficial, like pioneering EVs that reduce global emissions (Tesla), developing an innovative satellite internet constellation that unlocks the potential of the digital world to remote communities (Starlink), inventing implantable brain-computer network interfaces that allow a quadriplegic to control computers with their mind (Neuralink), creating new tunnelling technology to build underground transit networks that alleviate congestion (Boring Company) and revolutionising rocketry through reusable boosters (SpaceX).

These business enterprises have made Elon Musk the world’s richest man, as the New York Times likes to remind us in the 57 articles it writes on him daily. The moniker “richest man” functions as a by-word for evil. But just how long are we going to live in the delusion that Musk’s wealth is not a direct consequence of his enterprises selling products to consumers, businesses and governments that they want and like? And just how long are we going to maintain the pretence that Musk’s wealth is not, at least to some degree, a consequence of the social benefit his products have produced for consumers and the societies in which they live?

Jeff Bezos is something of a bore next to the walking headline that is Elon Musk. His wildly successful and equally revolutionary business Amazon is about as sexy as he is. But let’s not kid ourselves that it is the unmitigated evil avowed by screeching leftists (it’s mean to unions, and so on). Are we really going to lie to ourselves that Bezos’s wealth has absolutely nothing to do with the fact that the business he created is, well, just so damn convenient and efficient, and by virtue thereof, has improved our lives as consumers? It is easy to take for granted the miracle of an incomprehensively vast and efficient marketplace that directly matches consumers and producers from every corner of the globe, making it possible to get an unbelievable range of goods delivered to the home without the opportunity cost of having to physically travel to a shop only to find that it is out of the stock you want or need, or has the stock, but not in the desired size or colour.

And let’s not forget, while we are at it, that Amazon and Musk Inc. employ an estimated 1.5 million (yes, million) and 150,000 workers respectively. Last time I checked, having a job is essential to personal and social wellbeing. And this is not even to take into account myriad contractors and other businesses (with employed workers) that benefit from Bezos’s and Musk’s unparalleled entrepreneurial success, let alone all of the secondary and tertiary industries that benefit from the expenditure of wages in the economy (money does trickle down, no matter how loud the jeers of derision are from the left).

All this is not to say that the likes of Elon Musk and Jeff Bezos are saints. I make no suggestion that they exemplify the virtues and traits likely to satisfy moralists (addressing the West’s demographic decline by spreading one’s seed with as many women as possible is not my personal cup of tea). Nor is it to say that the Musks or Bezos’s of the world use their wealth wisely, justly or productively. It is just to point out three rather obvious, but no less important, facts about successful entrepreneurship ignored by the left: 1) no entrepreneur makes a billion dollars without selling a product or service that incredibly large numbers of people (and/or businesses and governments) want, need and find satisfactory; 2) no one would take the risk of investing their time, energy and capital in the development of said product or service without the ability to make a return on their investment commensurate with the risk they take and the success they enjoy; and 3) without profit it would not be possible to accumulate enough capital to reinvest, thus facilitating the kinds of entrepreneurial innovations we all enjoy.

The progress so beloved of progressives would be limited to innovations in pronouns and post-colonial racial theories. It bears reiteration that our collective wellbeing and prosperity depends on profit. No profit, no entrepreneurs. No entrepreneurs, no innovation. No innovation, no progress. It’s not rocket science. Yet we have turned demonising wealth into a sport, without realising that to demonise wealth is to denigrate profit, investment and entrepreneurship, thus biting the hand that feeds us (literally in the case of some profit-making businesses).

A fundamental mistake leftists make in their critique of capitalism, under the suasion of dodgy Marxist economic theory, is to focus exclusively on profit as the epitome of evil. Yet, profit is only one side of the capitalist coin. As classical liberal economist Ludwig von Mises explained, the capitalist system ensures that those who are rewarded are those who “produce in the cheapest and best possible way those commodities which the consumers are asking for most urgently.” At the same time, however, it punishes those who fail to do so. Starting a business involves risk. Many businesses, particularly start-ups and new ventures, fail, leading to a loss for investors and entrepreneurs, sometimes even bankruptcy. So, while it is true that a successful

entrepreneur and investor stands to make a lot of money, it is equally possible that they may lose their entire investment, along with the time and energy spent in the endeavour, which is non-refundable. The distorted leftist view of capitalism paints it as a zero-sum game in which profits can only come at the expense of the wellbeing of workers and society, as unproductive and unentitled fat cat capitalists exploit the hard-working labour of the masses to extract wealth from the value workers place into the products they make. Never mind that there would be no product to make in the first place without the creativity of the entrepreneur, money invested in the enterprise and a healthy risk appetite that offers wealth for success and bankruptcy for failure. The Left simply does not understand the vital relationship between investment, innovation, risk and profit

The biggest misunderstanding about profit, however, is the role of “consumer sovereignty.” It is in fact the consumer, when all is said and done, that determines who the billionaires are. The free market is the most dynamic and immediate democracy in the world. I’m not talking about the pantomime that passes for “democracy,” whereby candidates from a handful of unrepresentative parties are “pre-selected” once every three years to vote like sheep for the policies dictated to them by their Cabinet in the interests of their pals. I’m talking about millions of transactions across myriad industries in genuinely competitive marketplaces where consumers determine winners and losers with their ruthless purchasing power. In markets, unlike elections, there is an immediate and objective feedback loop measured in sales, revenue, income, expenses etc. The companies and business that prove capable of providing desirable products for a reasonable price thrive. Those who don’t are chewed up and spat out by one of the most powerful and overlooked forces in our society: consumers.