Profit

There is often a good deal of verbiage about “profit” in the political press and most of the time it’s derogatory. Profit has been picked out as a target for hate by Communist propagandists, probably because it’s a point of irritation with people who envy other people who have become wealthier by making—profit.

But what is profit? It’s often defined as the reward you get when you add value to something. But let’s see what the Merriam-Webster dictionary has to say:

Profit

noun

prof· it ˈprä-fət
Synonyms of profit
often attributive
1: a valuable return : gain
2: the excess of returns over expenditure in a transaction or series of transactions, especially : the excess of the selling price of goods over their cost
3: net income usually for a given period of time
4: the ratio of profit for a given year to the amount of capital invested or to the value of sales
5: the compensation accruing to entrepreneurs for the assumption of risk in business enterprise as distinguished from wages or rent

I have to admit that doesn’t add a lot to our inquiry but then it doesn’t suggest anything objectionable, either. So let’s have a closer look at it. And some examples:

Thomas A. Edison invented the light bulb and he made a fair profit from that invention. But what was it really worth? The electric lamp changed the lives of the countless people all over the world. It continues to change them today. It added productive hours to every day for every person who had the benefit of one. Imagine the value of adding useful hours to the day of almost every person on Earth. It made precise dentistry and other kinds of surgery possible. It lit and continues to light the streets making it safer for people to drive and to walk home at night. It is immensely useful both in peacetime and in wartime. It makes countless things possible that just weren’t so before an artificial light could be shined on them.

It also eliminated the need for dangerous carbide lamps in coal mines. And likewise it eliminated the need for incendiary lanterns and candles in the home, the barn and the factory. Mrs. O’Leary’s cow could not have started the Chicago Fire by kicking over an electric lamp.

So, what would be the fair compensation to Mr. Edison for giving, I mean selling, us the electric lamp? You figure it out but do think about some very large numbers. Immense numbers. The value of that product was infinitely greater than he ever received.

Now let’s take the case of a Mr. Henry Ford. He put one of the world’s first cars into production. But he wasn’t the only one. Others, especially some Germans with names like Daimler and Benz, were doing it too. But Henry got the jump on all of them with his own very special invention. You see, he had a couple of steel rails put up, about chest high. He had them greased and the car chassis put on them so they would slide along while men on either side put the part of the car on them. So they would go, from bare frame to chassis, with springs and brake backing plates bolted on here and there, an engine dropped into place by a hoist and then an exhaust pipe, fender and so on and so on until a finished auto rolled out the door at the end. And you could have it in any color you wanted—so long as it was black.

While other nascent auto companies were building dozens of cars a day our Henry was building hundreds. And his fast and efficient production was making them affordable by everyman. Ford had invented the assembly line and with it mass production. What has that been worth to the world? Practically everything we use every day is produced by this method. How shall we say thank-you to Henry Ford for giving, oops, again I mean selling (these guys don’t work for nothing) mass production to the world? There may not be any numbers large enough to measure it.

So we are all enriched by the rich while they are getting themselves rich. It has made America the rich country that it is. Yet most people don’t count it or aren’t even aware of it but the rich become rich by creating wealth. We all share in that created wealth.

How can you imagine what the fair compensation would be if we all paid for the amount that our lives have been enriched by these creators, these inventors, these doers of things that had never been done before? We continue to be rewarded every day from the dazzling economics of those inventions.

Follow through every rich man’s wealth on the benefits received by the public at large but which are universally ignored. And don’t forget my favorite tycoon, the late Steve Jobs. The nine billion dollar estate he left was small compensation for all the utility the world got from his computers and that includes me, right now, writing this essay on my MacBook laptop.

By the way, I do all my writing on a computer these days. In the past I used an IBM typewriter. It was a late model Selectric that I bought new. That typewriter cost more in real dollars than the computer I’m using now. And may I field a passing suggestion at how much more a computer does than the simple typing done by a typewriter? I’m very thankful that profit was available to cause computers to be made to replace typewriters.

Look at any tycoon and you will see that the wealth he has acquired is an infinitesimal of the wealth that person has created. In most cases the wealth created is inestimable, it’s in the uncountable billions. It’s the reason we no longer live in caves.

Then have a look at how politicians get rich. Consider Barack Obama, who had nothing when he was elected president and now has more millions than anyone can estimate. (He even owns two mansions that are within a few feet of the sea level he insists is going to rise, one on Martha’s Vineyard and one in Hawaii.) That’s where the unearned wealth is. Where did all that money come from and what increase in the wealth was created by those people for the rest of us?

And don’t forget Nancy Pelosi’s millions from insider trading of a different kind—not from inside the company being traded but from inside the government. Nancy Pelosi gets rich; Martha Stewart gets jail. Sorry Martha, that’s what happens when you are in the free market producing value instead of being inside the government using its inside information.

Don’t complain about wealth in the private sector until you have accounted for how far and wide that wealth has been spread and enjoyed. Profit means profit for the entrepreneur to be sure but it also means the vast profit enjoyed by the entire society. When thinking about profit be sure to include all of it in your thoughts. The rich get richer by making us all richer. Let’s hope we are all allowed to continue doing so.


[1] The imbecilic AOC made the comment yesterday that no one could earn a billion dollars. That may be true for bartenders but not for entrepreneurs.

© Thomas A. Nelson Sr. 2026