(1) Profits and Resource Allocation Higher Demand Leads To
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The Profit Motive in Education: Continuing the Revolution the Profit Motive in Education: Continuing the Revolution
The Profit Motive in Education: Continuing the Revolution The Profit Motive in Education: Continuing the Revolution EDITED BY JAMES B. STANFIELD The Institute of Economic Affairs First published in Great Britain in 2012 by CONTENTS The Institute of Economic Affairs 2 Lord North Street Westminster London sw1p 3lb in association with Profile Books Ltd The authors 9 The mission of the Institute of Economic Affairs is to improve public understanding of the fundamental institutions of a free society, with particular Foreword 14 reference to the role of markets in solving economic and social problems. Summary 22 List of tables and figures 25 Copyright © The Institute of Economic Affairs 2012 The moral right of the author has been asserted. PART 1: BASIC CONCEPTS 1 Introduction 29 All rights reserved. Without limiting the rights under copyright reserved above, James B. Stanfield no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, Questioning the anti-profit mentality 29 mechanical, photocopying, recording or otherwise), without the prior written Things seen and not seen in education 34 permission of both the copyright owner and the publisher of this book. Policy lessons 38 Four simple policy proposals 41 A CIP catalogue record for this book is available from the British Library. A vision of the liberal ideal of education 45 ISBN 978 0 255 36646 5 References 49 eISBN 978 0 255 36678 6 Many IEA publications are translated into languages other than English or 2 Profit is about learning, not just motivation 51 are reprinted. -
The Profit Motive
The Profit Motive CIS Occasional Fbpen 3 The Profit Motive Department of Philosophy University of Reading THE CENTRE FOR INDEPENDENT STUDIES 1980 Published November 1980 by The Centre for Independent Studies All rights reserved National Library of Australia Cataloguing in Publication Data Flew, Antony, 1923- The profit motive. (CIS occasional papers; 3) ISBN 0 9596485 8 5. 1. Economics. 2. Philosophy. I. Centre for Independent Studies. 11. Title. (Series). @ The Centre for Independent Studies 1980 Printed by Lindsay Yates & Partners Pty. Ltd 4 Preface This third Occasional Paper publishes the proceedings of the Centre's Inaugural Occasional Seminar held at its St Leonards office on August 11, 1980. The Paper by Professor Antony Flew of the University of Reading, deals with a topic of special interest to those concerned with issues critical to the workings of a market economy. Much of this Paper forms the basis for a chapter in a new book by Professor Flew, The Politics of Procrustes. We thank the publishers, Maurice Temple Smith of London for permission to use Professor Flew's address as Occasional Paper 3. In the first section of his Paper, Professor Flew discusses the notion that the prof it motive is necessarily and uniquely selfish. If the pursuit of profit is selfish he argues, then why not the pursuit of wages, rents, fixed interest or whatever? He also feels that those who would criticise as selfish, an economic system which allows people to pursue their own interests, are making a fundamental error for it is not necessarily true that an interested action is also selfish. -
Principles of Microeconomics
PRINCIPLES OF MICROECONOMICS A. Competition The basic motivation to produce in a market economy is the expectation of income, which will generate profits. • The returns to the efforts of a business - the difference between its total revenues and its total costs - are profits. Thus, questions of revenues and costs are key in an analysis of the profit motive. • Other motivations include nonprofit incentives such as social status, the need to feel important, the desire for recognition, and the retaining of one's job. Economists' calculations of profits are different from those used by businesses in their accounting systems. Economic profit = total revenue - total economic cost • Total economic cost includes the value of all inputs used in production. • Normal profit is an economic cost since it occurs when economic profit is zero. It represents the opportunity cost of labor and capital contributed to the production process by the producer. • Accounting profits are computed only on the basis of explicit costs, including labor and capital. Since they do not take "normal profits" into consideration, they overstate true profits. Economic profits reward entrepreneurship. They are a payment to discovering new and better methods of production, taking above-average risks, and producing something that society desires. The ability of each firm to generate profits is limited by the structure of the industry in which the firm is engaged. The firms in a competitive market are price takers. • None has any market power - the ability to control the market price of the product it sells. • A firm's individual supply curve is a very small - and inconsequential - part of market supply. -
The Political Economy of Capitalism
07-037 The Political Economy of Capitalism Bruce R. Scott Copyright © 2006 by Bruce R. Scott Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author. #07-037 Abstract Capitalism is often defined as an economic system where private actors are allowed to own and control the use of property in accord with their own interests, and where the invisible hand of the pricing mechanism coordinates supply and demand in markets in a way that is automatically in the best interests of society. Government, in this perspective, is often described as responsible for peace, justice, and tolerable taxes. This paper defines capitalism as a system of indirect governance for economic relationships, where all markets exist within institutional frameworks that are provided by political authorities, i.e. governments. In this second perspective capitalism is a three level system much like any organized sports. Markets occupy the first level, where the competition takes place; the institutional foundations that underpin those markets are the second; and the political authority that administers the system is the third. While markets do indeed coordinate supply and demand with the help of the invisible hand in a short term, quasi-static perspective, government coordinates the modernization of market frameworks in accord with changing circumstances, including changing perceptions of societal costs and benefits. In this broader perspective government has two distinct roles, one to administer the existing institutional frameworks, including the provision of infrastructure and the administration of laws and regulations, and the second to mobilize political power to bring about modernization of those frameworks as circumstances and/or societal priorities change. -
Dictionary-Of-Economics-2.Pdf
Dictionary of Economics A & C Black ț London First published in Great Britain in 2003 Reprinted 2006 A & C Black Publishers Ltd 38 Soho Square, London W1D 3HB © P. H. Collin 2003 All rights reserved. No part of this publication may be reproduced in any form or by any means without the permission of the publishers A CIP record for this book is available from the British Library eISBN-13: 978-1-4081-0221-3 Text Production and Proofreading Heather Bateman, Katy McAdam A & C Black uses paper produced with elemental chlorine-free pulp, harvested from managed sustainable forests. Text typeset by A & C Black Printed in Italy by Legoprint Preface Economics is the basis of our daily lives, even if we do not always realise it. Whether it is an explanation of how firms work, or people vote, or customers buy, or governments subsidise, economists have examined evidence and produced theories which can be checked against practice. This book aims to cover the main aspects of the study of economics which students will need to learn when studying for examinations at various levels. The book will also be useful for the general reader who comes across these terms in the financial pages of newspapers as well as in specialist magazines. The dictionary gives succinct explanations of the 3,000 most frequently found terms. It also covers the many abbreviations which are often used in writing on economic subjects. Entries are also given for prominent economists, from Jeremy Bentham to John Rawls, with short biographies and references to their theoretical works. -
The Profit Motive Author(S): Antony Flew Source: Ethics, Vol
The Profit Motive Author(s): Antony Flew Source: Ethics, Vol. 86, No. 4 (Jul., 1976), pp. 312-322 Published by: The University of Chicago Press Stable URL: http://www.jstor.org/stable/2380226 . Accessed: 18/07/2011 11:51 Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at . http://www.jstor.org/action/showPublisher?publisherCode=ucpress. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected]. The University of Chicago Press is collaborating with JSTOR to digitize, preserve and extend access to Ethics. http://www.jstor.org Discussion THE PROFIT MOTIVE* Antony Flew Universityof Reading,England 1. TWO FUNDAMENTAL SUGGESTIONS We hear much talk of the (private) profit motive; and many suggestions that, because (private) profit is a defining characteristicessential to capitalism, there- fore any such economic system must be inherently more selfish and hard-nosed than actual or possible rivals. -
Three Essential Questions of Production Economic Understandings Standard SS7E5: the Student Will Analyze Different Economic Systems
Three Essential Questions of Production Economic Understandings Standard SS7E5: The student will analyze different economic systems. Every society must deal with providing goods and services for its people. Each society must also develop an economic system that can decide how to use the limited resources of that society as well. Three basic questions must be answered: a) What goods and services must be produced? b) How will these goods and services be produced? c) Who uses the goods and services that are produced? Definition: An economic system is a collection of formal and informal institutions, laws, systems of beliefs, and values which provide a framework for collective decision making. Standard SS7E5 a. Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. Traditional Economy What is produced? In this type of economic system, what is produced is based on custom and the habit of how such decisions were made in the past. Many traditional economies are found in rural areas where people depend on members of their extended families. The work in rural areas is often subsistence farming, herding animals, or in simple crafts and trade. How is it produced? The methods of production are primitive. Bartering, or a system of trading in goods and services, replaces currency in a traditional economy. No country today has a primarily traditional economy. For whom is it produced? The primary group for whom goods and services are produced in a traditional economy is the tribe or family group. -
What Economic Structure for Socialism?
What Economic Structure for Socialism? by David M. Kotz Economics Department Thompson Hall University of Massachusetts Amherst Amherst, MA 01003 U.S.A. Telephone 413-545-0739 Fax 413-545-2921 E-mail [email protected] March, 2008 This paper was written for the Fourth International Conference "Karl Marx and the Challenges of the XXI Century," Havana, May 5-8, 2008. What Economic Structure for Socialism?, by David M. Kotz 1 1. Introduction Popular support for socialism has rebounded from the low point reached in the early 1990s following the sudden demise of Communist Party rule in the former Soviet Union and in Central and Eastern Europe. Since then the intensifying problems generated by neoliberal capitalism have spurred renewed interest in an alternative. New efforts to build socialism have recently emerged in several countries in South America. However, it is not yet clear what "a new socialism for the twenty-first century" might be. There is general agreement that the mistakes of twentieth century socialism should not be repeated. In particular, most socialists believe that the economic structure of twentieth century socialism had serious flaws. There is little agreement, however, about what kind of economic institutions should form the basis for a new socialism. Some have advocated the harnessing of market forces as the route to a viable socialism. It is claimed that market socialism can combine the efficiency, innovativeness, and individual choice which competitive markets are supposed to assure with the social justice and economic security promised by socialism. Some point to the rapid economic growth in China since its shift to a market economy as evidence for the potential success of market socialism. -
Is the Profit Motive an Important Determinant of Grazing Land Use and Rancher Motive?
Is the Profit Motive an Important Determinant of Grazing Land Use and Rancher Motive? L. Allen Torell and Scott A. Bailey1 Paper presented at the Western Agricultural Economic Association Annual Meeting, Vancouver, British Columbia, June 29 - July 1, 2000. Copyright 2000 by L. Allen Torell and Scott A. Bailey. All rights re- served. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Abstract We build our economic models and estimate grazing policy impacts based on the standard economic model of profit maximization. Yet, over 30 years of research and observation has shown that, for many, consumptive and quality of life values are the most important reasons for the purchase of western ranches. Ranch buyers want an investment they can touch, feel and enjoy, and they have historically been willing to accept low returns from the livestock operation. Profit maximization appears to be an inadequate model for explaining rancher behavior; in estimating what impacts altered public land policies will have; and in de- scribing grazing land use and value. In this study, only 27% of the value of New Mexico ranches in the most productive rangeland areas was explained by livestock production potential. Economists and policy- makers must take the influences of both traditional livestock production and quality of life values into ac- count when determining appropriate policies for western rangelands. 1/L. Allen Torell is Professor, New Mexico State University, Department of Agricultural Economics and Agricultural Business, Las Cruces, NM 88003, [email protected]. -
Chapter 2: Markets and Society
Microeconomics in Context, Fourth Edition – Sample Chapter for Early Release Microeconomics in Context, Fourth Edition CHAPTER 2: MARKETS AND SOCIETY 1. THE THREE SPHERES OF ECONOMIC ACTIVITY As was mentioned in the previous chapter, economic activity takes place in three major spheres, which we designated as the core, public purpose, and business spheres. In some economics texts, the terms used are “household,” “government,” and “business.” In this text, we use the term “core” instead of “household” to emphasize the importance of communities, in addition to households, in the “core” activities described below. (Think of the maxim “It takes a village to raise a child.”) We use the term “public purpose” instead of “government” to include both government organizations and the nongovernmental nonprofit organizations whose activities are of growing importance in modern societies. Many economic activities (resource management, production, distribution, and consumption) are conducted through markets, but some activities, especially in the core sphere, take place outside of markets. In this chapter, we first give an overall view of the three spheres and then focus on the nature and workings of markets, which we will analyze further in Chapter 3. 1.1 THE CORE SPHERE Long before the invention of money, organized markets, and systems of government, human societies organized themselves along lines of kinship and community to undertake economic activities. Even now, many economic activities are conducted outside of formal markets. The core sphere is made up of households, families, and informal community groups that undertake economic activities, usually on a small scale, and largely without the use of money. -
Profitability and Investment: Evidence from India's Organized
DEPARTMENT OF ECONOMICS Working Paper Profitability and Investment: Evidence from India’s Organized Manufacturing Sector by Basu, Deepankar Das, Debarshi Working Paper 2015-14 UNIVERSITY OF MASSACHUSETTS AMHERST Profitability and Investment: Evidence from India’s Organized Manufacturing Sector¥ Deepankar Basua aDepartment of Economics, 1012 Thompson Hall, 200 Hicks Ways, University of Massachusetts, Amherst, USA. Email: [email protected] and Debarshi Dasb bDepartment of Humanities and Social Sciences, Indian Institute of Technology, Guwahati, India. Email: [email protected] This version: August 30, 2015 CORRESPONDING AUTHOR: Deepankar Basu ¥ Without implicating them in any way for the contents of the paper, we would like to acknowledge, with thanks, comments on an earlier draft of this paper by Amit Bhaduri, Tom Michl and Anwar Shaikh. The usual disclaimers apply. Debarshi Das would like to thank the Nehru Fulbright fellowship, which funded his visit to University of Massachusetts, Amherst when this paper was written. Profitability and Investment: Evidence from India’s Organized Manufacturing Sector Abstract Using a state-industry panel data set at the 3 digit national industrial classification (NIC) level of disaggregation for 19 major Indian states over the period 1983-84 to 2007-08, we analyze the contemporaneous and long run impacts of the rate of profit and its components – profit share, capacity utilization rate, and capacity-capital ratio – on investment. Our results show that: (a) the rate of profit has both short and long run positive impacts on investment; (b) the profit share and capacity-capital ratio have only long run positive impacts, and the capacity utilization rate has only a contemporaneous positive impact on investment. -
Communism As an Economic Ideal Paul M Sweezy
THE ECONOMIC WEEKLY SPECIAL NUMBER JULY 1962 Communism as an Economic Ideal Paul M Sweezy While socialism in the sense of public ownership of the means of production does away with pro duction for profit (in the public sector), it does not by any means eliminate. what is often called the profit motive, which economic theory since long before the time of Adam Smith has rightly regarded as the main spring of economic activity. When we speak of the profit motive, we mean simply that, those who engage in economic activity are moved primarily by the desire to reap as large a material reward as possible, and this of course applies not only to the owners or managers of capital but also to workers and farmers and lawyers and professional baseball players. There is nothing in the nature of socialism that conflicts in any way with the continued operation of the profit motive in this sense. What changes is only the definition of the jobs of the managers, not the motives which lead them to strive for optimum performance. The basic condition for the advance to communism is a tremendous increase in the productivity of labour. Scarcity as it has existed in the world up to now —and as it has been taken for granted by the science of economics must be perhaps not altogether abolished but at any rate greatly reduced. And of course, this mil be accomplished only as the result of a considerable period of rapid techno logical advance, improvement of living standards, rebuilding of physical environments etc.