I was reading in Chapter 8 of Murray's "Man Economy and State," and I noticed that Murray's definition of "profit" is only that income above and beyond the rate of income that could be gotten from the market rate of interest (if I have understood him correctly). However, this seems a bit strange to me, because under this definition, if the market rate of interest is 5%, and a particular individual has a very low time preference that only necessitates a 2% interest return in order for that individual to feel that he has benefited, and he ends up getting a 4% return, by Murray's definition, this man would have taken a 1% loss. But by receiving something he values more than what he would have gotten by not investing in that line, has not the individual profited (by a 2% margin)? Why must an individual's profit be defined by how much higher the revenue is over the market rate of interest? Shouldn't real "profit" be defined in reference to the individual's own rate of time preference?
"Anticapitalist theories share in common an inability to take human nature as it is. Rather than analyzing man as a complex creature, anticapitalist theories tend to focus on what the theorist wishes man to be." - Isaac Morehouse
Opportunity cost.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
generally speaking profit has two broad meanings; psychological profit, and an 'accounting' type profits measured in definite units.
Reisman seems quite happy to use the accounting style excess of sales receipts over costs, which seems the most natural to me, as it doesnt involve a fudge between the two meanings. Seems that invoking opportunity cost *in money terms* is, as Reisman says, an imagined cost, so one has to be very careful to be explicit abouts its psychological nature when using a meaning of profit that is such a blend.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
Are you talking about actual accounting or the kind of accounting where the government allows you to only deduct half your entertainment costs?
To paraphrase Marc Faber: We're all doomed, but that doesn't mean that we can't make money in the process. Rabbi Lapin: "Let's make bricks!" Stephan Kinsella: "Say you and I both want to make a German chocolate cake."