When I was early in my political awakening and becoming disenchanted with capitalism, I grew to see profit as a bad thing. I demonized it, and I centred it as the source of a lot of social issues.
I’ve since changed my mind.
Profit, in its basic form, is revenue minus expenses. It’s what’s leftover from the money a company took in after they paid all their bills, including paying the workers who produced their products and served their services.
If a company has a profit, it means that they charged their customers more for their products and services than they paid their workers to provide those products and services (plus other overhead).
We can refer to this as the surplus labour value.
A chair, for example, is more valuable than the lumber it came from, but it’s the labour that transformed that lumber into something more valuable.
When you sell that same chair for $20 but pay the worker $5 to make it, then it has a surplus labour value of $15. Not all of that will go to profit, but that is where profit comes from.
In other words, not all surplus labour value is profit, but all profit is surplus labour value.
I’ve since learned, however, that the problem isn’t profit; the problem is who gets that profit.
Under capitalism, the profit doesn’t typically go to those who generate that profit: the workers. It usually goes to the owning class: those who directly own or control the means of production or those who indirectly own or control the means of production (through investments, for example).
But that doesn’t need to be the only way.
Sometimes, profit from one year becomes the next year’s financial capital, to invest in fixed capital, such as buildings, machinery, or tools.
However, another option is that profit could be given directly to the workers. Some companies have profit sharing endeavours, which sort of do this.
Ideally, workers themselves could own and control the means of production, so they could then democtratically and collectively determine what to do with the profit.
And I think that makes sense. After all, they’re the ones whose labour generated the profit. They should decide what happens to it, whether they reinvest it into production, give it back to themselves, or something else entirely.
Profit isn’t inherently bad; it just is. The problem doesn’t lie with profit; it lies with who gets to decide what happens to that profit.
And I think workers should decide.
