Allocation of Resources, Capitalism, Distorted Meaning, Hobby Lobby, Profit, Real Liberals LIke Liberty, Stephen Carter
Subverting language seems to be a preoccupation on the Left, as amply illustrated by the misappropriation of the word “liberal” itself (see here). Another distortion is in the Left’s use of the word “profit,” but with no direct change in its meaning as the excess of business revenue over costs. Rather, there is a peculiar innuendo often attached to “profit” by Leftists. This point is developed more fully in “Liberals Make Profit a Dirty Word.” Too often, profit is characterized as undeserved, motivated by ill-will, evil. The author, Stephen Carter, notes that so many of those opposed to the Supreme Court’s recent Hobby Lobby decision, which struck down certain forms of mandated contraception benefits, were aggrieved by the fact that Hobby Lobby is a “for-profit” enterprise. Could anything be less relevant to the decision? And yet…
So far, the number of e-mails accurately describing the decision is, as my physics professors used to say, arbitrarily close to zero. But there’s one underlying fact they all get right: the justices ruled in favor of a “for-profit” employer. This little hyphenated term appears in e-mail after e-mail, suggesting that it’s the for-profitness that creates the perniciousness.
Profit is simply what a business earns as a return to its capital and entrepreneurship. It is a reward for risks taken, and it actually measures gains from voluntary exchange corresponding to benefits derived by customers. As Carter points out, profits provide a signal directing resources to flow toward their highest-valued uses, a social function that central planners can never replicate. Casting aspersions at “profits” or an enterprise’s for-profit status is no more righteous than a generalization that wages are wicked. Some qualification is needed for either sort of condemnation to have pertinence.