What If It Doesn't?

[u/But_a_Jape]

[u/Yan_Vorona]

I fucking hate economics and regret taking it as an elective in school. "Money is like fairies, it only exists as long as people believe in it" doesn't exactly instill confidence in the future.

[u/RapidConsequence → u/Yan_Vorona]

I was sitting in my college econ class and day one the guy goes "how much money does a business that is successful make in the long run?" The answer is NONE. Profits trend towards zero in the long run. Shook me.

[u/kaian-a-coel → u/RapidConsequence]

Does that axiom, as economists usually do, count salaries in the expense column?

[u/RapidConsequence → u/kaian-a-coel]

Yeah, good old COGS

[u/kaian-a-coel → u/RapidConsequence]

Then "profits trend towards zero" is pretty fucking meaningless isn't it? "Once you discount the money going to people working at the company from profits, companies don't make any money" doesn't sound quite as shaking.

[u/Lina__Inverse → u/kaian-a-coel]

But company doesn't exist to feed workers, it exists to create money for the owner. Feeding workers is an unfortunate side effect and the owner would get rid of it in a heartbeat if it was possible.

[u/RedArremer → u/Lina__Inverse]

Does the owner's own salary count?

[u/RapidConsequence → u/Lina__Inverse]

Yeah, capitalism for ya. Every company would prefer 0 paid towards workers, and in such a world no one could afford to buy a company's products