It’s The Economy, Stupid: What Activists Get Wrong About Financial Policy

Written by William Pauwels on April 3, 2018

When you buy a product, recognize that the selling price is not simply covering the material cost of the item. Selling price must cover the cost of all the companies involved in the manufacture and distribution of the item.

For example, a product made from steel must cover the overhead of the mining company, the shipping company, the processing company, the distribution company, and the retail company. These process costs enable free-market Capitalism to provide the products and quick delivery that we desire — that we enjoy.

I remember, recently, a friend complaining about the cost of her eye drops from Walgreens. So I looked up the profitability of Walgreens. As I remember, it was about 3% on sales – three cents on the dollar. I did not take this further to determine the return on capital employed in their business, but I bet it isn’t much more than this.

Socialist like to ignore the economics facts of business – one of the primary reasons why socialism always fails and is always rescued by quasi-Capitalism.

So don’t be fooled by Democratic/Socialistic propaganda. Competitive, free-market Capitalism is the only system that can make a large nation prosperous.

Do your part. Spread the word.

Image: CC0 Creative Commons; Excerpted from:

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.