Economics Questions

Re: Non Profit question

Bogart — Wed, 29 Aug 2012 18:31:12 GMT

A Non-Profit organization is a legal distinction based upon government approving of its activities over a Profit organization. The distinction exists to allow the organization to avoid paying some taxes and avoid having to adhere to fewer regulations compared to the "Profit" organizations.

Even if the dictinction did not exist and Non-Profits had to abide by the same tax rules and other regulations then the disctionction would still not make sense because the government defines the term PROFIT.

I prefer this definition of the term profit: Profit is the difference in value to the customers/benefactors between how much they value the product and/or service of the organization and how much they paid to the organization.

So given definition, all organizations, regardless of motive, function, beneficiaries, or products, are profit seeking. That is the people by definition prefer the output of the organization over what resources they pay into it.

Re: Non Profit question

Wheylous — Tue, 28 Aug 2012 17:14:40 GMT

This is not an Austrian view, but Bryan caplan claims tha discrimination may be more prevalent in non-profits in some cases:

http://econfaculty.gmu.edu/bcaplan/e321/lab7.htm

Re: Non Profit question

grant.w.underwood — Tue, 28 Aug 2012 17:08:18 GMT

need more info on what exactly you are looking for. nonprofit organizations all have incredibly different business models. Some make money and reinvest, some are strictly charity that have like 0 overhead so they dont need that much (if any) money to operate, ect. I've never read anything about Austrians being for or against it per se. If its government subsidized then Austrians are against it because of misallocations of scarce resources and if it is private nonprofit organization then Austrians are for it because no one knows better how to invest their money then themselves.

*addition

I cant think of any text off hand (maybe someone can point you to an article or something), but when the government funds/subsidizes charities Austrians have written about how that can lead to less private donations to that cause. Which can lead to a public cry for more government intervention if the subsidized industry isnt getting enough money. That might interest you.

Non Profit question

Erock — Tue, 28 Aug 2012 15:59:01 GMT

Hi everyone,

I did a search but could not find the information I need.

Where can I read up on the austrian view of non-profit(s)? I'm in a public administration class and today is the planned worship of non profits. I understand that they basically do make profits and that they redirect those profits towards their cause.

Any other points worthy of raising?

Thanks!