Profit and Loss

Profit is the pay-off of successful action. It cannot be defined without reference to valuation. It is a phenomenon of valuation and has no direct relation to physical and other phenomena of the external world.

Human Action, p. 393; p. 396

Profit is a product of the mind, of success in anticipating the future state of the market. It is a spiritual and intellectual phenomenon.

Planning for Freedom, p. 120

The entrepreneur profits to the extent he has succeeded in serving the consumers better than other people have done.

Human Action, p. 380; p. 383

Profit is the reward for the best fulfillment of some voluntarily assumed duties. It is the instrument that makes the masses supreme.

Bureaucracy, p. 88

Profits and loss withdraw the material factors of production from the hands of the inefficient and convey them into the hands of the more efficient.

Planning for Freedom, p. 16

There would not be any profits but for the eagerness of the public to acquire the merchandise offered for sale by the successful entrepreneur, but the same people who scramble for these articles vilify the businessman and call his profit ill-got.

Planning for Freedom, p. 122

It is precisely the necessity of making profits and avoiding losses that gives to the consumers a firm hold over the entrepreneurs and forces them to comply with the wishes of the people.

Planning for Freedom, p. 134

There is no reason why capitalists and entrepreneurs should be ashamed of earning profits.

Planning for Freedom, p. 146

The elimination of profit, whatever methods may be resorted to for its execution, must transform society into a senseless jumble. It would create poverty for all.

Planning for Freedom, p. 149

Profit tells the entrepreneur that the consumers approve of his ventures; loss, that they disapprove.

Human Action, p. 701; p. 705

Profits are the driving force of the market economy. The greater the profits, the better the needs of the consumers are supplied. For profits can only be reaped by removing discrepancies between the demands of the consumers and the previous state of productions activities. He who serves the public best, makes the highest profits.

Human Action, p. 805; p. 809

It is not the fault of the entrepreneurs that the consumers—the people, the common man—prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling “bad” things than in selling “good” things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.

Human Action, p. 297; pp. 299–300

The dividends of corporations are popularly called profits. Actually they are interest on the capital invested plus that part of profits that is not ploughed back into the enterprise. If the enterprise does not operate successfully, either no dividends are paid or the dividends contain only interest on the whole or a part of the capital.

Human Action, No Entry; p. 300