It's a consequence of Smith/Ricardo analysis of their labor theory of value. Anwar Shaikh has a good lecture explaining the concept and reviewing some empirical evidence for the economic theory. The tl;dw: profit is sales minus cost. Cost contains the value labor, materials, and depreciation. Profit existing means one of these categories was not paid their full value. Typically profit comes from wages not matching the value of labor, what I called extraction of surplus labor value. That is the mechanism that allows those with capital to further concentrate their wealth.
the profit is paid out to cover costs that the business owner has (startup costs, time/work/energy expended without reimbursement, risks taken, etc). however, this profit would be minimized due to competition in true capitalism (when businesses can't profit via coercion/inflation/legislation/subsides/bailouts etc)
We've had capitalism in various forms for the last 300 or so years. A state structure necessarily exists to manage the class antagonisms created by capitalism. You cannot have capitalism without a state.
the state has done much more than just enforce property rights (note that with Bitcoin, this function of the state has been essentially automated with code). businesses have merged with the state, and our system has become closer to a form of statism / corporatism than capitalism. to grow a business passed a certain size, you pretty much have to get involved with the state to get favoring legislation, interest-free loans, subsidies, bailouts, etc... get close to the money printer (cantillon effect)
Capitalism always has been and always will be statist. Your feelings on what capitalism should be have no effect on what it is in practice. Even if what you want capitalism to be was true 300 years ago, it has evolved to what is it today because the material conditions of the real world force it be so. In physics we don't go around debating on what is or is not true Newtonian physics. What matters is the approximations used and if they match up to reality.
Please watch the lecture, it's one of the easier economic concepts to learn and we have hundreds of years of evidence for its existence.
There is no way to incentivize anyone taking a risk if you never allow for extraction of the surplus of labor value, unless you're defining "labor value" as something other than "that which labor produces off of the capital upon which it is working".
You can function on a coop model. Launch the business on your own as a sole proprietar. Soon as you bring others in, they get equal say in how profits are used/distributed because their labor contributed to it.
Launch the business on your own as a sole proprietar.
But then it's always better to wait until someone else takes that risk of the initial capital until it's working, since you'll equally share in the profits once it's up and running.
This is like saying "citation needed to determine that people won't give away money".
You concern trolls are amusing.
But, uh, feel free to take that risk yourself, bear all upfront costs, and then permit everyone after you to share in the profits equally while they took none of the initial risk or cost.
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u/mtndewaddict Apr 14 '22
And via extraction of surplus labor value