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Show . . . 4 Profits Fallacy f p. t " I: ' By GEORGE S.BENSON f President of Harding College (19 J lAd Searcy.Arkansas jjflfidU ffe, w THE PROFIT incentive is widely misunderstood and nialigned. Many folks talk about profits as though they were injurious. These folks indulge in side-glances, as if profits were a vicious imposition imposi-tion upon the people. Profits, to some who are misled or misinformed, misin-formed, have assumed a negative sound. The fallacy is that industry indus-try arrives at selling prices by piling onto production costs as much profit as the traffic will bear. This is not the way profits are calculated. Sales prices on the tags are the prime consideration. In a free competitive market, the price tag is not marked according to preconceived pre-conceived notions of what the profit ought to be. The consumer is king in a free market; the price tag is slave to the demands of a price conscious buying public. pub-lic. This is one game in which the consumer takes the sweepstakes. sweep-stakes. Competition YOU AND I man-Is man-Is Regulator ufacture radios. We meet squarely In the market, where mine is priced at $100 and yours at $75. If the quality is the same, I must either lower my selling price to compete or give to the customer cne-third greater value than you do. The lower the price and the more quality included the better off each of us will be saleswise. Competition thus regulates the selling price regardless of my costs. The cycle is just that simple. To keep factories running, the goal of our industries is to make a better product available to a larger number of people through mass production and lower selling sell-ing costs. After deducting costs from the customer's price the result re-sult may or may not be a profit. ' When the margin is uncomfortably uncomfort-ably close, the next logical step will be toward more efficient production. pro-duction. ; Consumer EFFICIENCY of op-Is op-Is Winner eration means to industry in-dustry the ability to' keep down costs of making and selling a product. The object is, a favorable position on the open market. This means that factories facto-ries must be busy constantly taking tak-ing up the unemployed, supplying products at lower cost to an ever increasing buying public. Winner of this game is the" buying buy-ing public. Because of the profit; incentive and free competition, the public reaps huge dividends, in the form of better merchandise at fair prices. To the average cit izen of socialistic and totalitarian countries, where I have observed that these things are never duplicated, dupli-cated, these simple facts seem an unattainable dream. What American Amer-ican would wish to exchange this system for methods that have never succeeded half so well? Profit is no parasite feeding on our economic system. Profit is the life blood of the industrial and business enterprises responsible for the highest level of civilization civiliza-tion the world has known. Freedom Free-dom to compete against skill and efficiency by using better skill and more efficiency means a progressive progres-sive civilization not a static economy that;either withers away ' or makes spoilage for the spoilers. |