All profits are all bad?

Regarding the conception that the profit margin is always bad

We know that profit motive can drive bad behavior, as a clear example we can use something in the current news where counterfeit products are sold via the Amazon Marketplace. By purchasing something other than what they expected, the buyer is getting less value, and the seller is obtaining a profit. That’s not a great explanation but I won’t go into this because I think everyone gets it and can think of examples.

So how can profit be good? And this is not as-in greed is good, this is as-in a better allocation of resources and reducing waste. This example comes from grading a computer science course for C++ data structures. In cs, graphs are a set of connected points. Sometimes the connections are assigned values and a common task is to find the optimal path. If we use an arbitrary scale from 1 - 1000 where 1 is good and 1000 is bad, and we can get from point 0 to point 5 directly for 500, but indirectly via point 1 for 470, then we simply choose the path(s) with the lowest sum and say it is a better choice.

graph

Graph of the example of the cost of flying from SFO to JFK¹

The problem with an airline example is people will think of greenhouse gases, how takeoff & landing are where the accidents happen, and the time delay from a layover - at least I would. We have to imagine a theoretical world where all flights had one extra seat that would have gone empty, you have no luggage, and are so engrossed in [a book] for the next 12 hours that you don’t care where you are or what you are doing. We could think of a simpler example, but as physicists like to ignore gravity, let us try to ignore these other things to get to the point. So it costs less, is that good?

If it costs less, there is more for something else. Something else could be more travel, if you’re into travel, a donation to the non-profit of your choice, some nice dark chocolate, savings, or anything. In other words, if resources are limited, and you expend less for this required item, resources are conserved and available for other things. Which, by the abstraction power of currency, can be nearly anything.

Maybe there is an even better, simple example. An extremely obvious one. So imagine you are printing a newspaper (remember those?) and half your machines are out of whack and waste half the paper given. For a given print run, you can get twice as much by using only the good machines, or in other words, use twice as much paper to get the same result by selecting the bad machines. Assuming all else is equal, which do you choose? Well, it’s just wasteful to waste half the paper, plus it saves money (i.e. is more profitable). But that’s the point here, that conserving money conserves resources which reduces waste. (It turns out newspapers aren’t really profitable anymore so we’ll be careful not to call this ‘profit.’)

And making decisions and tradeoffs against different cultures and believes, resource availability and technical ability, personal preferences and interpretation of facts and implied futures is extremely difficult. An example of the complexity can be seen with nuclear power. On the one hand, sane people and protectors of the planet have seen the disasters that can occur and want them banned - not to mention that even in normal usage radioactive waste is generated that must be stored, and avoided, for thousands(?) of years, on the other hand climate skeptics are saying we can’t reduce carbon fast enough without more nuclear power and the climate impact may be horrendous (in a different way). Even worse, neither nuclear meltdown nor climate driven tornadoes are certainties, but are practical risk calculations based on inputs that might also be disagreed upon. I always thought that currency was an attempt to put decisions like these on a level playing field, or rather, that is allowed by abstracting away the history of this dollar versus that one. Money is fungible, this would never happen with trade and barter.

Yet profit is bad? Becomes another topic to examine; I’d like to argue that greed is bad, and being nefarious is bad, and not pricing in total cost is bad, and externalities are bad, etc.