Is Distributism utopian?

[David_Castlen]

David, Abu, Monte…
Just a quick question, under the system you advocate, is “maximizing profit” necessary?

**your question needs to be preceeded by what you consider the bonum the goal. You may choose to ask us what we consider the goal is and then ask if we consider maximizing profit a necessity?

To be successful in business(profitable now and the future) an EFFORT to maximize profits is very important. It is also imperative that the laws of God are not violated. In fact, following the law of love will (this is my personal opinion) be a major factor in the success of a business.

BTW, I am currently reading Belloc’s “The Servile State.” Unhistorical, inconsistant, incongruent, lacking in logic, incoherent… I long for Hayak … common sense; Bastiat… a real heart…

I have re-read RR and find how one can easily twist it to fit a socialist or distributist philosophy but it does not; it condemns socialism and clarifies the importance of property not cursing the large property owner. Further encyclicals make clear that property is to be let alone, that the Church’s command to treat employees fairly and with love is not a job of the state but the owner. The reason I am doing this reading is to respond to another response. The details will be long and I hope before this blogg is adios I can have it done.

… I have and am reading your literature; please read ours, I suggest starting with Entrepreneurship in the Catholic Tradition, by Fr. Anthony G. Percy. Or The Law, by Bastiat** You can get them free from me. Just go to my personal page and email me where to send it to; otherwise, the Acton Institute has them and I am sure other places have them

And lastly, I feel that you think there are more very successful people that are immoral that treat their employees unfairly than otherwise. Either you have not know many successful owners or the couple you have were not the best, or your conclusion is from Hollywood. I have know 100s and most of them are more than exceptional people. In fact, they ussually got into business out of excitment for an idea and not for just money. They work far more hours and far harder than most of their employees. God has given them a mind that can come up with solutions and new ideas that have shocked me. And the Distributist want these guys to only have access to just so much capital!!! just so much property!!! These entrepreneurs are who we need making our assets productive!!! But no no we need to make sure they are controlled so that they do not become large and make others who produce a poor or lessor product that is more expensive go out of business!!! And so our holy Distributist can pat himself on the back and say I kept that big boy at bay and “here you guys are; here is your pay; take your penny!!! and here is your grappy product”.
**

 

[Abu]

St Francis #458
under the system you advocate, is “maximizing profit” necessary?

Free enterprise is based on supplying goods and services at prices the public is prepared to pay.

Efforts to maximize profit may help the entrepreneur to build the business, share profits, and help to counter downturns in activity. “Quoting St Augustine, Pedro de Aragon specified, ‘it is not business, but businessmen who are evil’.” [See *Christians For Freedom, Alejandro Chafuen, Ignatius, 1986, p138].

Any action must avoid immorality which has been identified in post #434: “maximizing profit – a good thing in itself – but not to the exclusion of justice or through other vices such as cheating on quality or by other shoddy means.”

 

[St_Francis]

Thanks, both of you, for your replies. It sounds lke your system does not require that the business owner maximize profit, altho profiting is a good thing in that system. I was just reconsidering some of David’s responses, and at one point seemed very derogatory about the idea of a business owwner decling to sell some goods because it might hurt his neighbor’s business, and I wasn’t sure how seriously I should take that response.

Anyway, as you can see, I am thinking about this stuff… not just ignoring it but also not in a posituin ti say much right now.

 

[Reep]

Anyone interested in Distributism should check out John Medaille’s books on this subject. Medaille’s writings are the best explanation of Distributism since Chesterton and Belloc. . . . . It is clear that Distributism is not utopian but actually practical. All it lacks is a political organization to make it a reality.

Belloc himself had no false hope that Distributism would ever be adopted. According to Duff Cooper’s autobiography, the morning after an evening’s campaigning on Cooper’s behalf, Hilare Belloc: …] was sitting in the club next morning over a glass of beer when an enthusiastic young man was shown in who wanted the honour of a word with him. The young man explained that he was a fervent supporter of the principle of distributism, the political theory for which Chesterton and Belloc were supposed to stand and which advocated the small ownership of the national wealth. Belloc said he was glad to be assured of the young man’s support, and added that so far as he could see there was only one difficulty in the way of his policy being adopted.

“What is that?” eagerly asked the young man, anxious to learn.

“It is,” answered Belloc, “like trying to force the water at Niagara to go up instead of coming down.” The young man went away sorrowful.

from “Distributism” by Carol DeBoer-Langworthy quoting Cooper, Duff. Old Men Forget: The Autobiography of Duff Cooper (Viscount Norwich). London: Rupert Hart-Davis, 1953. (emphasis added).
​

For myself, it was distributism that drove me to libertarianism. Distributism’s ideals are appealing in many ways, but the more I read about it (including Medaille’s work–which has much good in it), the more it seemed hopeless. It just seemed that it could never be implemented without arbitrary governmental violence & theft on a grand scale.

Now if we could roll back government to constitutional boundaries (a reasonable goal and a good start) and force the crony capitalists into honest work, perhaps the distributists might have a go at their favorite social experiment. Say, in Montana or somewhere. Heck, if they could pull it off without bossing everybody around, I might enjoy a visit myself.

 

[Monte_RCMS]

David, Abu, Monte…
Just a quick question, under the system you advocate, is “maximizing profit” necessary?

Attempting to maximize profit is necessary.

So, basically, YES!

Because you don’t know what your actual financial results are going to be.

Contrary to the discussion and debate “business models”, running an actual business is not a “steady state”. It’s not a smooth process. This year’s profits will most likely not be the same as last year’s profits … which most of your government official assume. There are bumps … mostly bumps, in fact.

If you follow your government and elected officials’ statements, they do ASSUME that this year’s and next year’s profits will be the same as your last year’s profits. Which is why it sometimes is so difficult to come up with your own pension contribution … they assume your money will be the same and steady. Not so, unfortunately.

You cannot tell ahead of time if some unknown unknown is going to pop up. So you need “maximum profits” to carry your business across that chasm.

You are doing great, for example, and suddenly find you need a piece of software that is very expensive. BAM! You’re screwed. So you need to figure out how to manage buying and paying for that expensive software. And the requirements change on a daily basis. Or your delivery truck stops dead because the transmission failed; and your business requires immediate delivery [you have perishable products, for example], so you need to rent or find a temporary replacement truck AND you need to get your old truck fixed right away. OR, you are a plumber and you NEED to reach your customers immediately …

The “problem” is that you have competition, even if you don’t know who that competition might be. So, you cannot charge super high prices because that unknown competitor will eat your lunch by undercutting your pricing. Take a look in the Yellow Pages at how many plumbers offer FAST service at unplugging stopped-up drains.

But, yes, you do need to maximize your profits.

You “might” get lucky and have enough profits to afford a vacation in Hawaii. Or, you might get unlucky and have to spend all those profits on a new / used delivery truck.

 

[Monte_RCMS]

Thanks, both of you, for your replies. It sounds lke your system does not require that the business owner maximize profit, altho profiting is a good thing in that system. I was just reconsidering some of David’s responses, and at one point seemed very derogatory about the idea of a business owwner decling to sell some goods because it might hurt his neighbor’s business, and I wasn’t sure how seriously I should take that response.

Anyway, as you can see, I am thinking about this stuff… not just ignoring it but also not in a posituin ti say much right now.

Profit is not “a good thing”.

Au contraire, Profit is absolutely essential.

Your business cannot survive without profits.

Without profits, your business is toast … gone.

Please keep in mind: profits are not some philosophical construct … Profits are ONLY the difference between revenues and expenses.

Why did American Airlines just declare bankruptcy? Because their revenues and expenses were out of whack. Not because some executive wanted to punish the employees or punish the shareholders.

Most “theoreticians” are only familiar with government operations … Government is based on having some form of base year or base line budgeting.

You take what your agency spending was last year and assume a budget that is a certain percent larger for next year.

Government stopped using zero-based budgeting decades ago.

ALL BUSINESSES WORK ON A ZERO-BASE BUDGETING.

You just don’t know what your revenues and expenses are really going to be, in business.

So, you work to maximize your profits and hope it all works out.

 

[frankpearson]

Belloc himself had no false hope that Distributism would ever be adopted. According to Duff Cooper’s autobiography, the morning after an evening’s campaigning on Cooper’s behalf, Hilare Belloc: …] was sitting in the club next morning over a glass of beer when an enthusiastic young man was shown in who wanted the honour of a word with him. The young man explained that he was a fervent supporter of the principle of distributism, the political theory for which Chesterton and Belloc were supposed to stand and which advocated the small ownership of the national wealth. Belloc said he was glad to be assured of the young man’s support, and added that so far as he could see there was only one difficulty in the way of his policy being adopted.

“What is that?” eagerly asked the young man, anxious to learn.

“It is,” answered Belloc, “like trying to force the water at Niagara to go up instead of coming down.” The young man went away sorrowful.

from “Distributism” by Carol DeBoer-Langworthy quoting Cooper, Duff. Old Men Forget: The Autobiography of Duff Cooper (Viscount Norwich). London: Rupert Hart-Davis, 1953. (emphasis added).
​

For myself, it was distributism that drove me to libertarianism. Distributism’s ideals are appealing in many ways, but the more I read about it (including Medaille’s work–which has much good in it), the more it seemed hopeless. It just seemed that it could never be implemented without arbitrary governmental violence & theft on a grand scale.

Now if we could roll back government to constitutional boundaries (a reasonable goal and a good start) and force the crony capitalists into honest work, perhaps the distributists might have a go at their favorite social experiment. Say, in Montana or somewhere. Heck, if they could pull it off without bossing everybody around, I might enjoy a visit myself.

But, at the same time, according to Servile State, he thought the alternatives both lead in the long run to slavery. I don’t know that he grasped the success that could be had for bringing up the working conditions of the poor that we have seen throughout the West in things such as Keynesian economic practices. Certain distributists would consider whether there is a way to affect the same outcome of lifting the poor laboring class out of the gutter without simply throwing cash at them, working to ensure those distributions are in the form of productive capital or land as much as possible. We can work toward this simply by supporting these types of practices whenever possible.

On libertarianism, I have to ask how you align holding those types of views with clear admonitions from the Church to the sorts of Laissez Faire practices that held the great mass in the West in squalor preceding and in the early parts of the 20th Century.

I tend to think we live a cradled existence in our day and age. We don’t consider the level of poverty that engulfed the working class in Western countries only about one hundred years ago and extending back centuries. The Laissez Faire proponents like to put the blame on government alone. I think that is short-sighted, and it is clearly not where the Church put the blame; that sadly, we are going to let history repeat itself all over again.

 

[frankpearson]

Post # 355:
“Capitalism” is a derogatory term coined by Karl Marx, and that’s perhaps why Bl John Paul II dislikes it, as he makes clear as he affirms free enterprise in Centesimus Annus, 1991:
CA 42. ‘If by “capitalism” is meant an economic system which recognizes the fundamental and positive role of business, the market, private property and the resulting responsibility for the means of production, as well as free human creativity in the economic sector, then the answer is certainly in the affirmative, even though it would perhaps be more appropriate to speak of a “business economy”, “market economy” or simply “free economy”.
‘CA 43. The Church has no models to present;’

Free enterprise is affirmed also here: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36).

Still reviewing this, but I thought you might like to see Distributist Review has reviewed Centesimus Annus regarding market utopia vs. distributism:

“… there is a risk that a radical capitalistic ideology could spread which refuses even to consider these problems, in the a priori belief that any attempt to solve them is doomed to failure, and which blindly entrusts their solution to the free development of market forces.” (Centesimus Annus, no. 42, emphasis mine.)

distributistreview.com/mag/2011/09/the-continuity-of-centesimus-annus/

 

[frankpearson]

Free enterprise is affirmed also here: “Society does not have to protect itself from the market, as if the development of the latter were ipso facto to entail the death of authentically human relations…Therefore it is not the instrument that must be called to account, but individuals, their moral conscience and their personal and social responsibility.” (Caritas in Veritate, Benedict XVI, 2009, #36).

Catholics have to wake up and consider our societies and our own salvation is at stake when we subscribe to condemned economic philosophies:

Caritas in Veritate 32:

“Lowering the level of protection accorded to the rights of workers, or abandoning mechanisms of wealth redistribution in order to increase the country’s international competitiveness, hinder the achievement of lasting development.”

34
"
But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well.
"

“Economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value. But it also needs just laws and forms of redistribution governed by politics, and what is more, it needs works redolent of the spirit of gift.”

"
Economic life undoubtedly requires contracts, in order to regulate relations of exchange between goods of equivalent value. But it also needs just laws and forms of redistribution governed by politics, and what is more, it needs works redolent of the spirit of gift.
"

The quote taken in support of reduced restraint in the market, was simply out of context.

 

[David_Castlen]

But, at the same time, according to Servile State, he thought the alternatives both lead in the long run to slavery. I don’t know that he grasped the success that could be had for bringing up the working conditions of the poor that we have seen throughout the West in things such as Keynesian economic practices. Certain distributists would consider whether there is a way to affect the same outcome of lifting the poor laboring class out of the gutter without simply throwing cash at them, working to ensure those distributions are in the form of productive capital or land as much as possible. We can work toward this simply by supporting these types of practices whenever possible.

On libertarianism, I have to ask how you align holding those types of views with clear admonitions from the Church to the sorts of Laissez Faire practices that held the great mass in the West in squalor preceding and in the early parts of the 20th Century.

I tend to think we live a cradled existence in our day and age. We don’t consider the level of poverty that engulfed the working class in Western countries only about one hundred years ago and extending back centuries. The Laissez Faire proponents like to put the blame on government alone. I think that is short-sighted, and it is clearly not where the Church put the blame; that sadly, we are going to let history repeat itself all over again.

Keynesian economics has done nothing but exascerbate problems

 

[Abu]

frankpearson #465
I have to ask how you align holding those types of views with clear admonitions from the Church to the sorts of Laissez Faire practices that held the great mass in the West in squalor preceding and in the early parts of the 20th Century.
We don’t consider the level of poverty that engulfed the working class in Western countries only about one hundred years ago and extending back centuries. The Laissez Faire proponents like to put the blame on government alone. I think that is short-sighted, and it is clearly not where the Church put the blame; that sadly, we are going to let history repeat itself all over again.
The Laissez Faire proponents like to put the blame on government alone. I think that is short-sighted, and it is clearly not where the Church put the blame.

The fantasy that “squalor” was a product of “Laissez Faire practices” and “extended back centuries” to be “repeated all over again” is at the heart of the problem here. Pope Leo XIII referred to the “large majority of the very poor”. How many were “very poor”?

Quote from Dr Woods:
*In a major 1985 study, economist Nicholas F. R. Crafts estimated that real income per capita doubled in England between 1760 and 1860. The economic historian R. M. Hartwell devoted much of his career to this debate, and by 1970 he could proclaim, ‘Is the controversy over? As regards the standard of living – the bundle of goods – it should be, and indeed, appears to be. Even E. P. Thompson, the most convinced pessimist, now agrees that “no serious scholar is willing to argue that everything got worse.” *The Church and the Market, Dr Thomas E Woods, Jr., Lexington Books, 2005, p 169].

The Industrial Revolution developed in the mid 18th century in England and in the Communist Manifesto, Engels and Marx described the developments they saw:
“The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization or rivers, whole populations conjured out of the ground – what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?”

Without the great contribution of the Industrial Revolution, sparked by Catholic economic and social thought and action in the West, we would still be eking out an existence as before that development. Catholic teaching, especially social teaching outlines the morality of this interaction. Free enterprise has revolutionised the standard of living of billions.

Matthew Harbinger equates misery and wretchedness to social dislocation resulting from the Protestant Revolt; personal licence through the so-called Enlightenment and French Revolution; the developing Industrial Revolution moving masses to the cities; the development of mechanical transport and the rise of nationalism and imperialism. [Matthew Harbinger, Papal Teaching on Private Property: 1891-1981, Lanham, MD: University Press of America, 1990, p 4].

 

[St_Francis]

Profit is not “a good thing”.

Au contraire, Profit is absolutely essential.

Your business cannot survive without profits.

Without profits, your business is toast … gone.

Please keep in mind: profits are not some philosophical construct … Profits are ONLY the difference between revenues and expenses.

Why did American Airlines just declare bankruptcy? Because their revenues and expenses were out of whack. Not because some executive wanted to punish the employees or punish the shareholders.

Most “theoreticians” are only familiar with government operations … Government is based on having some form of base year or base line budgeting.

You take what your agency spending was last year and assume a budget that is a certain percent larger for next year.

Government stopped using zero-based budgeting decades ago.

ALL BUSINESSES WORK ON A ZERO-BASE BUDGETING.

You just don’t know what your revenues and expenses are really going to be, in business.

So, you work to maximize your profits and hope it all works out.

Both you and Reep suggest that profit is essential. First, let me say that the question arose out of the discussion in this thread between David and me, and he was talking about “focusing on mazimizing profit” and “getting every nickel out of the business.”

I had stipulated that one of the business expenses would be adequate compensation for the owner of the business, so profit is above his compensation.

Now I see that there needs to be at least a prudent reserve to cover unexpected expenses. That makes sense, like when people are supposed to have 3 or 6 months living expenses on reserve.

However, once this has been achieved, is it necessary to *squeeze *every nickel out of the business; would the business owner who declines to sell a line of goods because it would cut into his neighbor’s business be doing the wrong thing in the eyes of (I’m not sure what y’all call yourselves, since most of what I have mentioned has been shot down…).

Thanks

 

[Abu]

frankpearson #467: Catholics have to wake up and consider our societies and our own salvation is at stake when we subscribe to condemned economic philosophies:
Caritas in Veritate 32:
“Lowering the level of protection accorded to the rights of workers, or abandoning mechanisms of wealth redistribution in order to increase the country’s international competitiveness, hinder the achievement of lasting development.”

The problem continues as there are no “condemned economic philosophies” here; there are criticisms of specific economic actions proposed by governments or individuals, which are prudential, without the specifics.

Fr James V Schall, S.J., highlights the problem:
“ ‘Rights’ are philosophical words, words that are rooted in a system of thought very alien to the sort of concerns the Pope has in mind in using them.” (re Centesimus Annus)….“Moreover, ‘rights’ to work or to housing, economic rights, in other words, have tended to embody the very socialist ideology that has failed. In any case, the point I want to make here is that it is not sufficient to use the doctrine of ‘rights’ without in every case clearly identifying what is meant by them and how they are justified. As they are used in Catholic social thought, I am afraid, they often tend to imply notions quite at variance with what in fact is desired.” *Does Catholicism Still Exist?, *Alba House, 1994, Society of St Paul, p 182-3].

On Caritas in Veritate, Fr Schall comments:
‘What is unique about this social encyclical, then, is its philosophical and theological depth. It does not allow us to be superficial. It does not seek to explain “social matters” as if they had no ultimate source or as if, even with their own proper order, they stood by themselves. “Truth, and the love which it reveals, cannot be produced: they can only be received as a gift. The ultimate source is not, and cannot be mankind, but only God, who is himself Truth and Love. … That which is prior to us and constitutes us—subsistent Love and Truth—shows us what goodness is, and in what our true happiness consist. It shows us the road to true development” (#52). Thus, not only do “duties” stand before “rights,” as Benedict teaches, but “gift” stands before and beyond them both without denying their validity.’
ignatiusinsight.com/features2009/schall_caritasinveritate_july09.asp

‘This encyclical, moreover, does something that I have been concerned about for many years. It is very careful how it uses the term “rights.” The Pope clearly spells how “rights” and “democracy” in their modern meanings can lead to a violation of human dignity if they are grounded in no standard or understanding of human nature, including fallen human nature.’
freerepublic.com/focus/f-religion/2289208/posts

 

[Monte_RCMS]

Both you and Reep suggest that profit is essential. First, let me say that the question arose out of the discussion in this thread between David and me, and he was talking about “focusing on mazimizing profit” and “getting every nickel out of the business.”

I had stipulated that one of the business expenses would be adequate compensation for the owner of the business, so profit is above his compensation.

Now I see that there needs to be at least a prudent reserve to cover unexpected expenses. That makes sense, like when people are supposed to have 3 or 6 months living expenses on reserve.

However, once this has been achieved, is it necessary to *squeeze *every nickel out of the business; would the business owner who declines to sell a line of goods because it would cut into his neighbor’s business be doing the wrong thing in the eyes of (I’m not sure what y’all call yourselves, since most of what I have mentioned has been shot down…).

Thanks

If you have a business, then how do you know when “is enough”?

What does it mean for a business “to have 3 or 6 months living expenses on reserve”? For a business, that is a meaningless idea.

A business is different from a household or a home or a family. You must constantly be buying equipment and materials and dealing with a very dynamic environment. If you have a piece of equipment that is made in the UK, then your replacement parts cannot be purchased from an equipment manufacturer in Japan. If you have a work stoppage, you may need to air freight the parts in, which is ruinously expensive. But if you ship them by surface freight, then you would be shut down until the parts arrive. Just one minor example; but you cannot forecast when something goes wrong.

There was a flood in Pennsylvania and it destroyed all the factory equipment for one company … and that coupled with other things that went wrong, resulted in the company declaring bankruptcy.

The idea that it is in some way immoral to try to maximize your profit makes no sense where a business is concerned.

And, keep in mind, that there are competitors … and if you let your selling price get too high, then your competition will undercut your pricing.

It’s a very dynamic situation.

The marketplace is very dynamic; there are constant changes.

The hypothetical notion of “the business owner who declines to sell a line of goods because it would cut into his neighbor’s business” is meaningless for a business.

You do the best you can.

The idea that “once this has been achieved” … is a false notion for a business … because business conditions change constantly.

A number of very famous book store chains have gone out of business. All of it owing to dynamic conditions.

Technology changes … there was a television program that showed the selling of stuff people had in their homes. One of the items was a very rare cylindrical manual computer made by a company called Keuffel & Esser. They were very successful. As far as I know, they are gone. en.wikipedia.org/wiki/Keuffel_and_Esser

 

[frankpearson]

The fantasy that “squalor” was a product of “Laissez Faire practices” and “extended back centuries” to be “repeated all over again” is at the heart of the problem here. Pope Leo XIII referred to the “large majority of the very poor”. How many were “very poor”?

I’m sorry. Your argument is with the Church and not with me. The Church continues to make the case that Laissez Faire practices are, at least in large part, to blame for the conditions of the poor, and they are quite clearly condemned over and over again.

Let’s be clear that your fight is with the Church and not the distributist.

 

[Abu]

frankpearson #473
Your argument is with the Church and not with me. The Church continues to make the case that Laissez Faire practices are, at least in large part, to blame for the conditions of the poor, and they are quite clearly condemned over and over again.
Let’s be clear that your fight is with the Church and not the distributist.

Incorrect. The mirage is that the Popes are condemning free enterprise.

The reality is the fact that free enterprise has enabled billions to escape poverty, was developed by Catholics, affirmed by the Popes but conjectured into “Laissez Faire practices”, “Laissez Faire proponents”, and by St Francis (#428) into “the sort of laissez-sfaire capitalism promoted by Fr Sirocco” – tilting at windmills.

Fr James V Schall, S.J., in *Does Catholicism Still Exist?, *Alba House 1994, p 184-185, explains (post #357):
“Since the Catholic Church wants poverty confronted, since She wants this confrontation to be done justly and with the interest and cooperation of the workers and the poor, She has had to acknowledge, as did the socialist systems themselves, that there are certain ways that must be employed if mankind is to meet its economic problems. These ways can be known and imitated, but they must include a juridical system, profit, enterprise, knowledge, exchange, a market, voluntary organisations, a relatively independent economy, private property, and respect for work and excellence.”

In post #431 the question is asked “Where is the reference to and quote for “laissez-faire capitalism” by Fr Sirico or by the Popes?” as stated by St Francis in #428. This has never existed in any society or country, only in the minds of a few economists.

That people are responsible for good or evil, and not the market, is reaffirmed by Pope Benedict XVI – in the free economy lauded by Bl John Paul II.

 

[St_Francis]

If you have a business, then how do you know when “is enough”?

…The idea that it is in some way immoral to try to maximize your profit makes no sense where a business is concerned. …

I am not and have not said that it is immoral to make a profit. What I am asking is if it is all right to *decline *to make a profit in one area or another.

For example, there is a rural area with quite rich people and quite poor people and man who owns the one grocery store for 60 miles around. He could make his store a high-end grocery store and make a greater profit selling just to the rich, but then the poor people would be unable to afford to shop there.

Would it be “all right” for him to decline the greater profit in favor of continuing to serve *all *the people in the area? That’s what I want to find out: if under your view (which I am still unsure what to call), it is all right to *not *maximize profit in favor of other considerations.

(Posit that the business, being paid for, can maintain itself in one of the two ways but that to build a new business would not work because one would have to start from the ground up.)

 

[David_Castlen]

If you have a business, then how do you know when “is enough”?

What does it mean for a business “to have 3 or 6 months living expenses on reserve”? For a business, that is a meaningless idea.

A business is different from a household or a home or a family. You must constantly be buying equipment and materials and dealing with a very dynamic environment. If you have a piece of equipment that is made in the UK, then your replacement parts cannot be purchased from an equipment manufacturer in Japan. If you have a work stoppage, you may need to air freight the parts in, which is ruinously expensive. But if you ship them by surface freight, then you would be shut down until the parts arrive. Just one minor example; but you cannot forecast when something goes wrong.

There was a flood in Pennsylvania and it destroyed all the factory equipment for one company … and that coupled with other things that went wrong, resulted in the company declaring bankruptcy.

The idea that it is in some way immoral to try to maximize your profit makes no sense where a business is concerned.

And, keep in mind, that there are competitors … and if you let your selling price get too high, then your competition will undercut your pricing.

It’s a very dynamic situation.

The marketplace is very dynamic; there are constant changes.

The hypothetical notion of “the business owner who declines to sell a line of goods because it would cut into his neighbor’s business” is meaningless for a business.

You do the best you can.

The idea that “once this has been achieved” … is a false notion for a business … because business conditions change constantly.

A number of very famous book store chains have gone out of business. All of it owing to dynamic conditions.

Technology changes … there was a television program that showed the selling of stuff people had in their homes. One of the items was a very rare cylindrical manual computer made by a company called Keuffel & Esser. They were very successful. As far as I know, they are gone. en.wikipedia.org/wiki/Keuffel_and_Esser

**:thumbsup:This is a good reply, Monte; I think there is a flawed method of thinking by all who opposed a free market. I believe they are addicted to materialism as:

1. That everything can be solved by a formula; all the varibles are know and understood and
2. They have little faith in the potential of Man; they see man as a machine. They can not possibly vision a man discovering a process that could produce milk at 2 cents a gallon or if they were around in 1950, man developing efficient air-conditioning or CDs**…

 

[David_Castlen]

I am not and have not said that it is immoral to make a profit. What I am asking is if it is all right to *decline *to make a profit in one area or another.

For example, there is a rural area with quite rich people and quite poor people and man who owns the one grocery store for 60 miles around. He could make his store a high-end grocery store and make a greater profit selling just to the rich, but then the poor people would be unable to afford to shop there.

Would it be “all right” for him to decline the greater profit in favor of continuing to serve *all *the people in the area? That’s what I want to find out: if under your view (which I am still unsure what to call), it is all right to *not *maximize profit in favor of other considerations.
**
**Would it be all right!!! Absolutely!! First by up-grading new jobs are created new suppliars are given new business. Then I see that *Uncle Joe’s Grocery ***** is now Blue Blood Bounties. You know what I do knowing that there is a segent of the market not being satisfied? Right! I start a new store. New emplloyees, new products bought from new vendors and customers happier in all cases. I might even try to buy the old name from BBB and name my store Uncle Joe’s Grocery

(Posit that the business, being paid for, can maintain itself in one of the two ways but that to build a new business would not work because one would have to start from the ground up.)

**
This is incoherent. I am assuming you are trying to say that there will be no other entrepreuers to address this sigment or if there is there is not enough capitol. In a free market this won’t be the case. At the least Uncle Joe’s new owner will open a road side food market. It will grow. And before you can say “Kill those hateful businessmen” he will have expanded and bought a building - creating more jobs**

 

[St_Francis]

**
This is incoherent. I am assuming you are trying to say that there will be no other entrepreuers to address this sigment or if there is there is not enough capitol. In a free market this won’t be the case. At the least Uncle Joe’s new owner will open a road side food market. It will grow. And before you can say “Kill those hateful businessmen” he will have expanded and bought a building - creating more jobs**

Right. The area can support only one grocery store, not two. The owner has the choice of going high-end and making more profit, or staying where he is and have affordable food for those who do not have as much.

What I want to know from you is *would it be **wrong **in your system, *whatever it is that you call it? (And what do you call the system you all are advocating?)