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TRUTH: Someone Needs To Say It — ‘PROFIT’ Isn’t A Bad Word

The word “profit” has a negative connotation in the lexicon of many ordinary people. Their thinking about business profit is often exaggerated and negative.

Only the business press seems to give profit appropriate credit. The Leftist mainstream media doesn’t and often prefers government control of pricing and profit.

Profit should not be considered a negative. Even so-called nonprofit businesses, which are usually held in higher esteem, must produce a surplus in order to thrive and survive.

Actually, the term nonprofit is a misnomer – a deceptive term. Nonprofit simply means not-taxable. It means the money that’s left over after all expenses of an enterprise are paid is not subject to taxation. It must be plugged back into the business, paid to employees, and/or used to repay borrowed capital–even if the business has proved to be an inefficient, ineffective, or uneconomical enterprise. The Post Office, the Veterans’ Administration, Airports, Amtrak, etc. are good examples.

In the case of for-profit companies, profits are what is left over after all bills and obligations are satisfied and the government has taken its cut of the enterprise’s surplus. This money is plowed back into the business, saved, invested, paid out to lenders and/or stockholders, etc.

Profit and surplus are measures of a company’s financial success, i.e., its ability to pay its own way and finance its future.

In a competitive, free-market, law-and-order economy, as we have in the United States, prices and ultimate profitability are controlled primarily by market forces. When government steps in and interferes with these natural forces, bad things often happen.

Of course, in addition to profitability and/or surplus, an enterprise’s long term survival and success are usually achieved by meeting the needs, wants and expectations of customers in a competitive, free-market economy.

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In God we must trust . . . but we must always do our part – to secure and promote the truth and a better way – to protect our freedom and interests – and to defend the Judeo-Christian American-Way.

photo credit: TheToch Dollars via photopin (license)

Share if you agree “profit” isn’t automatically a bad word.

William Pauwels

About the author, William Pauwels:

William A. Pauwels, Sr. was born in Jackson Michigan to a Belgian, immigrant, entrepreneurial family. Bill is a graduate of the University of Notre Dame and served in executive and/or leadership positions at Thomson Industries, Inc., Dow Corning, Loctite and Sherwin-Williams. He is currently CIO of Pauwels Private Investment Practice. He’s been commenting on matters political/economic/philosophical since 1980.

View all articles by William Pauwels

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