Russell Brand, Ignorant Poseur Or Just Posing As Ignorant?
SO. We’ve seen the earnestly Teenage Trot Russell Brand trot out his ignorance of economics for us all on Newsnight. This is the one line that made me cringe the most:
David Cameron said profit isn’t a dirty word, I say profit is a filthy word. Because wherever there is profit there is also deficit.
Oh Dear God that’s nonsense.
Worth just taking a leeelte moment to understand what a profit is.
We’ve a pile of steel over here, some workers there, a shed and some other bits and pieces. We’re going to mix all these things together and drive cars out of the other side of that shed once we’ve built them. If we make a profit on doing so what have we just proved?
Correct, we’ve just proven that consumers value those cars more than they do the labour of the workers, the steel and the shed that we’ve used to make the cars.
That is, profit is the value added in our process.
There is no deficit there at all: only that by undertaking this activity we have added value to the world.
Yes, of course, we can all get pissed off about who gets the profit. Sure: but that is entirely different from our wanting there to be a profit in the first place. The opposite would be a loss of course: which would mean that those cars are worth less than the steel, the labour, and the shed. That makes us all poorer which is the opposite of what we want an economy to do for us.
Oh, and Brand? Just ignorant I’m afraid.