It is common to hear profit attacked as exploitation and greed. How many supervillains have appeared in TV shows, books, or movies with the diabolical plot of putting “profits over people”? In reality, profit is a powerful mechanism for human cooperation, and serves to make sure that the earth’s resources are maximized to serve the best interests of humanity. Why? Think of profit as the reward for making good decisions. Profit doesn’t have to be only about money—selling something for $5 that you made for $3. It can also be something immeasurable: volunteering time to a charity can be profitable if doing so benefits a cause you’re passionate about. The benefits of profit are obvious. We want to benefit from our actions, rather than be disappointed by them. Now let’s look at the benefits of profit beyond an individual level. The world is a complicated place, full of billions of individuals with different opinions and interests, and a future that is never predictable. Add to this that there are many resources that have numerous uses. For example, iron can be used to make all sorts of things—from refrigerators to cars to medical devices. Given this web of complexity, decisions on what to make and how to produce it are beyond anyone's comprehension. No single person can imagine a way to fulfill the needs and desires of every single other person. Luckily, no one has to. Instead of one single person trying to figure out how to use all the world’s resources, property rights allow individuals to own these resources. These individuals can then sell these resources on markets, where others can buy them and combine them with other resources to build new products. The individual who risks his money buying resources to build products to sell is called an entrepreneur. In doing so, he also invests in capital goods (such as machines and buildings) as well as laborers, who have a variety of skills. All of these parts of production have costs. The entrepreneur is hoping that he will be able to sell the end product for more money than it costs to make it. That money is the profit that he gets to enjoy. It’s not just the entrepreneur who benefits, though. Consumers benefit, because they get new and different products. Workers benefit, because they make money. A successful entrepreneur is therefore helping other people while making a profit. Just as important, however, is loss. As we mentioned before, many of the components that go into producing a good have a variety of uses. This is true for natural resources, buildings, workers, and machines. If these resources are being used on a product and it isn’t profitable, this means that consumers don’t value that product enough to buy it. By suffering a loss, an entrepreneur may sell ... https://www.youtube.com/watch?v=i66Ke2q4Lp4