Message-ID: <s2d61ad5.082@crs.loc.gov> Date: Fri, 10 Jan 1997 10:29:02 -0500 From: Jonathan Sanford <mailto:JSANFORD@CRS.LOC.GOV> Subject: Re: C and sustainability -Reply To: Multiple recipients of list DEVEL-L <mailto:DEVEL-L@AMERICAN.EDU>
Dear Kerry--I don't think it is correct to argue that capitalism has but one "port" or measure (profit). This is too limited a perspective. For one thing, profit is a composite factor, generated by a mix of things such as the likelihood that an investment meets a demand for the product or service produced, the relative price (scarcity, cost of acquisition, etc.) of inputs and of alternative products (competition), etc. These are a very powerful feedback loop--more powerful and sensitive, for example, than the views of a central planning board.
For another thing, the capitalist economic system--like all other economic systems--operates within a social and political framework. They act upon one another. Hence, society may not produce enough people willing to do a particular kind of work or it may produce too many, both of which influence the price that must be paid for the skills needed to produce the investor's intended output. Society may produce people interested in creating certain kinds of technical changes rather than others (the overemphasis on gentlemanly skills in developing countries and the underemphasis on applied or manual skills). Society may decide that it disapproves the product, regulating its availability or prohibiting it altogether. (For example, closing hours for liquor establishments, prohibition on smoking inside buildings and sale to minors of tobacco products, prohibition of various drugs--previously available without restriction in the nineteenth century--now deemed illegal). Society may also persuade the political system to regulate the operations of the economic system--security and exchange control regulation of stock markets, food and drug regulation of health and safety of consumer items, wage hour and safety legislation regulating employment conditions, etc.
Of course, in the end, these factors all influence the thing called profit, since they determine whether it is effective for the investor to hope to generate a yield from a particular investment of funds. So the idea that capitalism has only one measure may actually be correct. But I think for present purposes the latter observation is of little value, considering all the things that go into the formulation of the "profit" information.
Jon Sanford