Not Making a Profit, is Immoral

Dear Business Owner: This image is how most non-business owners, especially students, perceive you.

Dear Non-Business Owner: You don't have a clue.

At the peak of his wealth, Rockefeller had a net worth of about 1% of the entire US economy. When asked "How much is enough?" his answer was “just a little bit more.”

Paul Darafeev Lectures at Law School

A friend of mine was a professor at a law school and asked me to come in several times and lecture his labor law students, from the perspective of a business owner.

I placed one of our chairs before them and said "I sell this for $100. After I pay labor, overhead, materials, & administrative and marketing expenses, how much net profit do you think we have left over?"

50%. No kidding. That was their answer, almost to a student. I don't believe anyone guessed less than that.

Even Vladimir Lenin called for a limit on profit. He argued for an 8% cap, and accused many private business owners of making "crazy profits", and pushed for state run businesses, while demonizing private ones. The Marxists then created rules and laws to trip up those businesses, and if they failed, the government confiscated all assets, sends owner to Siberia, and the kids go to Pioneer Camp.

I continued with those labor law students.

"What if I sold this chair for $100, BUT, it cost me $101 to make. That means I show a $1 loss. Who do I take that dollar from, the lumber company? Do you think I could ever buy more lumber if I short my suppliers? How about the utilities, would they accept receiving less than their bill? What if I short the government on taxes and fees? Do I short rent?

"I know, I will short the workers and pay them less!"

At that point the labor law students screamed out "NO! You can't short the workers!" (presuming that their life's goal was to go after businesses, I was not shocked).

I asked,

"Who then makes up the $1 shortage?" Realistically, I do not mean one dollar. Think of this in terms of percentages; $1 is one percent. Sell for $100 means 100%, and cost $101 is 101%. So, $100 million in sales, would produce a $1 million loss.

Crickets

They were absolutely clueless, so I gave them the answer. "The business owner." Yes, sometimes the business owner goes without a paycheck so that his workers can be paid. Or, they borrow; or sell off assets, and infuse personal funds."

I then asked, "What government program is there that helps business owners when they suffer losses?"

More crickets.

"There ARE no programs." (mind you this was before PPP). I gave this lecture in the early 2000's.

If you have an opposing view, please comment.

Next Lecture

What do you call it when someone works hard, for little money?

What do you call it when someone works VERY VERY hard, for ZERO pay?

I will share after receiving a comment.

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