profit

from Wikipedia, the free encyclopedia

Profit (from Latin profectus "progress, increase, advantage" / pronunciation: [ pʀoˈfit ]) describes the profit , i.e. the excess of the income over the expenses of a company . In German the term is mainly used in everyday language , in other languages ​​it is also used as a technical term in economics .

Concept history

In the English-speaking world, according to Webster's Dictionary, the French term, which goes back to the Latin words profectus and proficere , has existed since the 14th century. Interestingly, Erich Fromm pointed out in 1976 that "profit ... in the Bible and also with Spinoza, meant 'profit for the soul'". The grammatical-critical dictionary of the High German dialect of 1798, on the other hand, traces the term profit back to the Latin term proficuum , and defines profit as “profit, especially accidental profit. To have a profit on something, profit. Dabey is no profit, no benefit, no gain. Profiting, a small profit, in common life, where one also has to profit from the verb, profit from something and, in a wider sense, profit from something. ”The Pierer's Universal Lexicon of 1861 defines profit as“ profit, advantage … ”Similar to the Große Meyers Konversations-Lexikon from 1908:“ Advantage, profit; profit, take advantage; profitable, advantageous "; like Brockhaus's small conversation lexicon 1911: “Profit, advantage; benefit, have benefit; profitable, profitable. "

The term was used in political economy and can already be found in James Steuart or Adam Smith . The English and French term profit corresponds to the German profit . Using the English word formations, it has also found its way into catchphrases such as “ profit center ” or “ non-profit organization ”. It was also imported into German with a neutral connotation in book titles such as “Profit für alle” ( Norbert Bolz ). According to Duden, the term is often used disparagingly in the German language. In the parlance of the German Democratic Republic , the word “ profit ” was contrasted with the word “profit” from the 1960s . Profit was used with the connotation “greedy for money”, “capitalist” - there is no such distinction between profit and gain in Marx. Likewise, in the critique of capitalism , the term is given an excessively inflated meaning or as a motive for exploitation and overexploitation with a negative value accent.

Early political economy (1662–1776)

The physiocrats knew surplus value only as a surplus product in natural form, namely as the food that the farm worker produces beyond what is necessary for his own livelihood. The Physiocrats proceeded from the assumption that agriculture forms the basis of national wealth, and that other trades only transform agricultural wealth and are dependent on it for their extent. For the Physiocrats, the capitalist's profit was merely a kind of entrepreneur's wage, basically a diversion from the agricultural surplus.

For Ronald L. Meek , the development of a profit theory such as that found in the classics Smith and Ricardo was connected with some problems that were connected with the still germinal development of emerging capitalism. The first theorists would have had problems distinguishing capital profit as an independent source of income from rent, interest and wages, unless they simply understood profit as a "capital profit" that came about through cheap buying and expensive selling.

Profit from sale

James Steuart , for example, in his political economy would tend to understand the term profit as a mere synonym for profit. For him, the price of a good is made up of its “real value” and the “profit on sale”. The real value or production price would be determined by the work that has to be expended on the goods, the value for maintaining the labor force and the material value. The difference between the production price and the selling price would be the profit on sale. The competition reduces the profit to a “reasonable” or “suitable” level. If there is a balance between the supply and demand of a good, "one finds the prices in an adequate relation to the real expenditures, which were necessary for the production, including a small increase in profit for the manufacturer and dealer."

Mixing of profit with the sources of income pension, interest and wages

In the real production process of early capitalism , the sources of income were often still combined and not to be found in pure form, the landlord was also an entrepreneur, the master craftsman who became an entrepreneur continued to manage the production process, etc.

Thus, for example, from the point of view of the landlord, the yield from the capital advanced was considered in the same way as the land made available, for which a certain rent would have to be paid. The amount of the pension is based on the land and capital employed by the sovereign.

The distinction between profit and interest only became striking with the emergence of a class of traders through which the qualitative difference between the active and passive investment of money-capital became increasingly clear.

Entrepreneurs who would have left the circle of direct producers, on the other hand, would often have understood their profit as a higher reward for their greater efforts or greater responsibility that they now perform. Even if they ultimately withdrew from the immediate production process and only took over supervisory positions, they continued to see their profit as a “wage of the supervisory authority”.

Transition to classical political economy

Only after a certain historical development of capitalism did new, independent and clearly distinguishable social groups emerge in the production process, which lived on equally clearly distinguishable forms of income with their own laws, and which Adam Smith for Meek had with great historical foresight into the system of political economy were incorporated:

“It was the emergence of capital profit as a new category of class income, clearly distinguished from other forms of income, that paved the way for the ultimate development of classical political economy. ... Profit could no longer be put under the heading of pension, which Petty had tended to do ; it could no longer be associated with wages, as with Cantillon and Hutcheson ; and its origin could no longer be sought in the sphere of circulation where Steuart had claimed to find it. The relationship between capital and wage labor became the dominant socio-economic relationship in Western society, and this fact implied a complete revision of some fundamental economic concepts and the demand for a new basic social structure. "

Classic political economy

Adam Smith

For the first time, Adam Smith made a powerful distinction between the sources of income capital profit, wage labor and basic rent. The profit from capital was for him an income, as Meek writes, "which was tied solely to the use of capital for the employment of wage labor"; for Smith, the owners of capital were the leading economic class and the mainspring of business. For him profit represents the income of a certain class. The prosperity of nations would be determined by the annual product which a nation's soil and labor produce. The value of this annual social product can be traced back to the work done, but is divided into the forms of revenue corresponding to the social groups:

  1. Basic pension
  2. Wages
  3. Capital profit

These three social groups or classes would be the three great, original, constituent parts of civilized society.

The value that the worker produces is divided into two parts: the wages he gets for his work, and the profit that the entrepreneur gets who provides materials, machines, etc. Although the owner of capital is or can be almost free from any work, he nonetheless expects a profit proportional to the size of the capital employed. According to Smith, the profit from capital is therefore regulated by entirely different principles than wages.

Capital is used in anticipation and for the purpose of profit, and in the course of this much of the useful work of a society is put into effect. Maximizing profit and the associated accumulation of capital is an essential element of the prosperity of nations for Smith. Contrary to basic rent and wages, the rate of profit would not rise but fall with the development of prosperity.

David Ricardo

For David Ricardo , too , the social product that arises through the joint application of labor, machinery and capital is divided between the three social classes - the landlords, the capitalists and the workers - in the form of rent, profit and wages.

criticism

Adam Smith and David Ricardo are accused by Marx of a lack of theoretical rigor in capturing the different forms of value . Because they confuse special forms such as profit or rent with the form of surplus value, which, according to Marx, lies on a higher level of abstraction in theoretical considerations. According to Marx, Ricardo nowhere considers surplus value separately and conceptually separate from its special forms of profit (interest) and rent.

Marxist theory

Theories of Added Value , 1956

Karl Marx worked out his labor theory of value as well as his special concept of profit by examining classical economics , as is particularly clearly shown in his theories on surplus value .

For Karl Marx, the concept of profit was a central concept in his theories. According to this, profit is the appropriation of part of the total social value that has been converted into money by companies . For him it is the excess over the manufacturing costs , while the rate of profit represents the ratio between the two quantities. The source of profit is the work of the enterprise, because the use value of labor creates a product of value that exceeds the value of labor dictated by wages. For Marx, capitalism shows a tendency towards falling profit rates. The “real product of capital”, the goal and result of the capitalist production process , is profit. For Marx it is “the form of surplus value that specifically characterizes the capitalist mode of production”. “Without knowledge of surplus value”, “no theory of profit would be possible”. The capitalist who exploits surplus value from unpaid labor is “the first appropriator, but by no means the last owner of this surplus value. He has to share it afterwards with capitalists who perform other functions by and large in social production, with the landlord, etc. The surplus value therefore splits into different parts. Its fragments fall into different categories of people and receive different, mutually independent forms, such as profit, interest , commercial profit , rent, etc. ”.

Marx's theory of profit and surplus value finds its marginal utility theoretical counterpart in Eugen Böhm von Bawerk's “Theory of Interest on Capital ”.

Entrepreneurial profit at Schumpeter

Joseph A. Schumpeter's vision of capitalism is dynamic and crisis-ridden. He considers the traditional image of price competition to be unrealistic. On the other hand, typical for the development of capitalism is the “creative destruction” through the introduction of innovations into the economic process.

A distinction must be made between the role and function of the capitalist on the one hand and the entrepreneur on the other. The entrepreneur introduces the innovations, for which he makes an "entrepreneurial profit" in Schumpeter's use of the term.

“A capitalist has a sum of economic values ​​(capital) at his disposal, which he uses according to plan to get back a larger sum than previously invested. He himself bears the economic risk for the corresponding investment process. An "entrepreneur", on the other hand, is the function of introducing novel combinations of production factors into the economic process. "

See also

literature

Web links

Wiktionary: Profit  - explanations of meanings, word origins, synonyms, translations
Wikiquote: Profit  Quotes

Individual evidence

  1. ↑ PROFIT. Merriam-Webster Online Dictionary. 2010. Merriam-Webster Online. January 19, 2010 < http://www.merriam-webster.com/dictionary/PROFIT >
  2. ^ To have or to be, dtv, Stuttgart, 1976
  3. ↑ http://www.zeno.org/Adelung-1793/A/Profit,+der
  4. ↑ http://www.zeno.org/Pierer-1857/A/Profit
  5. ↑ http://www.zeno.org/Meyers-1905/A/Prof%C4%ABt
  6. ↑ http://www.zeno.org/Brockhaus-1911/A/Prof%C3%ADt
  7. ↑ cf. Sir James Steuart: Distinction between the "profit upon alienation" and the positive increase in wealth. Karl Marx: Theories about surplus value. MEW 26.1, p. 7 ff. / Ricardo, David: Value, rent, wages and profit. 1946.
  8. ↑ Kreuter, Andreas: Transfer prices in profit center organizations. - 2nd, updated edition 1999.
  9. ↑ Duden - Dictionary for the correct use of foreign words, Dudenverlag, 2003
  10. ↑ Colin Good, Language in the Totalitarian State - The Case of the GDR, in Language in Conflict: On the Role of Language in Social, Political and Military Conflicts, Volume 5 of Language, Politics, Public, edited by Ruth Reiher, Verlag Walter de Gruyter , 1995 , ISBN 3110139588 , page 269.
  11. ↑ See also Lexicology: An international handbook on the nature and structure of words and vocabulary, Volume 21, Verlag Walter de Gruyter, 2005, ISBN 3110171473 , keyword: tendencies to differentiate between the former GDR and FRG, page 1206
  12. ↑ for an example see Noam Chomsky: Profit over people. - 5th edition. 2001.
  13. ↑ Karl Marx: Theories about the surplus value. MEW 26.1. P. 14.
  14. ↑ Karl Marx: Theories about the surplus value. MEW 26.1. P. 17.
  15. ^ Ronald L. Meek : Economics and Ideology. European Publishing House Frankfurt 1973. pp. 31–35.
  16. ^ Ronald L. Meek: Economics and Ideology. European Publishing House Frankfurt 1973. p. 16.
  17. ^ Ronald L. Meek : Economics and Ideology. European Publishing House Frankfurt 1973. p. 17.
  18. ↑ James Steuart : Political Oeconomy , Vol. 1, p. 199; quoted from: Ronald L. Meek : Economics and Ideology. European Publishing House Frankfurt 1973. p. 18.
  19. ^ Ronald L. Meek: Economics and Ideology. European Publishing House Frankfurt 1973. pp. 35f.
  20. ^ Ronald L. Meek: Economics and Ideology. European Publishing House Frankfurt 1973. p. 31.
  21. ↑ Labor measures the value, not only of that part of price which resolves itself into labor, but of that which resolves itself into rent, and of that which resolves itself into profit. Adam Smith: AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Book 1. Chapter 6.
  22. ↑ The whole annual produce of the land and labor of every country, or, what comes to the same thing, the whole price of that annual produce, naturally divides itself, it has already been observed, into three parts; the rent of land, the wages of labor, and the profits of stock; and constitutes a revenue to three different orders of people; to those who live by rent, to those who live by wages, and to those who live by profit. These are the three great, original, and constituent orders of every civilized society, from whose revenue that of every other order is ultimately derived. Adam Smith: AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Book 1. Chapter 11.
  23. ↑ The value that the workers add to raw materials dissolves into two parts, one of which pays their wages, the other the profit of their employer on the entire capital advanced by him in material and wages. He can have no interest in employing workers if he does not expect a somewhat larger proceeds from the sale of the products of their activity than is necessary to replace his capital. Nor can he be interested in investing large capital rather than small ones if his profits are not in proportion to the size of his capital. Adam Smith: AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Book 1. Chapter 6.
  24. ↑ “One might think that the profit from capital is just another name for the wages of a particular type of work, namely, supervision and management. But it represents something completely different, is governed by completely different principles and bears no relation to the amount, difficulty or mental exertion of that alleged work of supervision and management. It is entirely determined by the value of the capital invested and is larger or smaller in proportion to the size of this capital. ”Adam Smith: AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Book 1. Chapter 6.
  25. ^ Ronald L. Meek: Economics and Ideology. European Publishing House, Frankfurt 1973. p. 32.
  26. ↑ It is the stock that is employed for the sake of profit, which puts into motion the greater part of the useful labor of every society. The plans and projects of the employers of stock regulate and direct all the most important operation of labor, and profit is the end proposed by all those plans and projects. But the rate of profit does not, like rent and wages, rise with the prosperity, and fall with the declension of the society. On the contrary, it is naturally low in rich, and high in poor countries, and it is always highest in the countries which are going fastest to ruin. Adam Smith: AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS. Book 1. Chapter 11.
  27. ^ David Ricardo : On the Principles of Political Economy and Taxation. London 1821. Chapter 1. Section VII.
  28. ^ David Ricardo : On the Principles of Political Economy and Taxation. London 1821. Preface.
  29. ↑ p. 63.
  30. ↑ Karl Marx: Theories about the surplus value. MEW 26.2. P. 375.
  31. ↑ Marx-Engels-Werke, Volume 23, 1867, p. 180 f.
  32. ^ Karl Marx: wages, prices and profit. 1865, p. 140.
  33. ^ Karl Marx: Grundrisse der Critique of Political Economy . P. 707.
  34. ^ Karl Marx: Chapter III. MEW 25, p. 822.
  35. ↑ Karl Marx: Theories about the added value II. MEW 26.2, p. 376.
  36. ^ Karl Marx: Capital I. MEW 23, p. 589.
  37. ↑ Joseph A. Schumpeter : Dogmenhistorische and biographical essays. JCB Mohr (Paul Siebeck), Tübingen 1954, p. 11.
  38. ^ Joseph A. Schumpeter: Capitalism, Socialism and Democracy. 6th edition. A. Francke, Tübingen 1987 (New York 1942), ISBN 3-7720-1298-1 .
  39. ^ John Cantwell, Innovation, Profits and Growth: Schumpeter and Penrose. (PDF; 74 kB); Heinz D. Kurz: Innovations and Profits: Schumpeter and the Classical Heritage. doi : 10.1016 / j.jebo.2007.08.003 ; Bruce A. McDaniel: A Contemporary View of Joseph A. Schumpeter's Theory of the Entrepreneur.
  40. ^ Joseph A. Schumpeter: Business cycles. A theoretical, historical and statistical analysis of the capitalist process. Volume I, Göttingen 1961, p. 112. (English: Business Cycles. A Theoretical, Historical, and Statistical Analysis of the Capitalist Process. New York 1939)