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Comment by dopylitty | Hacker News Reader

Profit is inherently waste. It is value that is taken out of an enterprise and doesn't contribute to improving the product of the enterprise.

If there is surplus value it should stay in the enterprise and be used to improve the enterprise by improving processes or improving the lives of workers. Failing that it should be returned to the customers through lower prices.

One good thing about government services is they're more efficient because they don't have this value being extracted by uninvolved parties. That means they're able to provide better service or lower prices with the value that would've been sucked out by profit takers.

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> If there is surplus value it should stay in the enterprise and be used to improve the enterprise

Profit is surplus value. The opposite of waste. Forcing it back into the place it originated versus letting it transport to the most-useful thing it can do is how you get sclerotic feudalism. Had we adhered to this philosophy during the Industrial Revolution, we would have just kept farming.

You seem to be a little confused about the nature of profit. If investors didn't expect to take out future profits then they obviously wouldn't put in the capital necessary to start the enterprise in the first place.

A lot of the value in government services tends to be extracted by public employee unions. Politicians make excessive commitments around wages, pensions, and job security in order to buy union votes and maintain labor peace. Then the politicians move on and future taxpayers are left holding the bag.

I'm afraid you're the one that's confused. Profit is defined economically as revenue minus expenses, and so the grandfather post's first sentence is correct.

What grandfather is suggesting is something like an ESOP, co-op, or etc. There are a long history of these kinds of organizations, and they thrive in free-market economies--unfortunately, nobody really lives in one of those anymore.

It is telling that you say public employee unions "extract value" by demanding the pensions/job protections that should by rights belong to everyone (and often did, in the past). Conversely, private corporations "extract value" from the labor marker by struggling to provide any job security, any retirement, or even anything resembling a living wage.

Just which sector is failing to be profitable, here?

You're welcome to start an employee owned co-op and build homes or whatever. It's completely legal and no one will stop you. There's nothing in our economic system that prevents them from working, but in practice they usually fail due to poor internal decision making. So I don't understand what you're complaining about or what point you're trying to make.

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