The Meaning of Profit

In stuff about the "information" or "knowledge" economy, I say that profit is a tax paid by ignorance; in the sense that the cost of finding the next best deal exceeds its value. Either because the value of my time is greater than the extra saving, or the deadline is too close and I don't have that time to spend.

Which, among other things, is why the net is revolutionising business; it is making the discovery costs fall like a rock.

But there's another meaning to the word profit and it comes down to something like this.

Profit means being paid for something you don't deliver, or getting something for free that you can then charge for or even better, selling something that doesn't belong to you.

I know this because where a new tool or process is discovered that lowers the actual cost of building a specific product or performing a specific task, while the discoverer can gain a little extra income while everyone else catches up, in the end the previous extra costs are driven out of the value chain and wind up in the consumer's pockets.

But if you can dig up some minerals and not have to pay realistic depletion, pollution and social damage costs, you externalise those costs to another place or a future time and keep the difference for yourself, that's profit.

Even better is to sell someone the idea that, by buying this or that product or service, in this special location, with this trademark attached it will make you a better, more desirable person or provide some incalculable, unmeasurable, but highly desirable benefit.

Religion does it all the time, makeup and liposuction companies do the same, as do Nike and BMW and SUV makers. And so does private education. But it looks like Australians are finally waking up to the scam. Fees, bullies and poor results behind private school exodus

BULLYING, poor academic results and high fees have prompted a surprise student exodus from private schools, a survey of NSW principals has found. Public high schools across NSW are enjoying boosts in enrolments as a growing number of students reject the private school system, the statewide survey, conducted by the NSW Teachers Federation and released exclusively to The Sun-Herald, shows.

The high cost of attending private schools is the No. 1 reason for leaving. A broader curriculum and a desire for "better academic results and teacher quality at public schools" were the other top reasons for the change.

Other respondents cited students leaving their private schools because of a heavy focus on religion, having academic results that were not "up to scratch" and discipline issues. 

Here's the news, a good teacher only needs a blackboard and a bit of chalk, a bad teacher can't be helped by the highest tech, most expensive, anything; and academic results cannot be "put into" kids, they can only be drawn out of them. That's what education means, "to lead out".

You have to laugh. They are leaving because, in the end, the private schools failed to provide exactly the things they offered. Of course. The schools are in education for profits, the profits that are made from paying for something that you don't get, or getting something you don't pay for. 

And their disappointments are not over yet. They thought that they were buying into an old Boy's NETWORK that would provide unearned benefits for their kids in the future.I'll give good odds that they don't deliver either.

Disclaimer: my daughter's Grandparents paid in full for part of her education at a private school. I will never know whether she made more of that than she would have at a state school, but my bet is that she would have made a good fist of whatever her circumstances because that is how she has been all her life. I suppose she'll get to test the proposition about Old Boy's Networks.

Comments

[red river]

And public schools don't have OBN, too?

Ever heard of the Football Program(tm)?

If the costs of discovery are dropping, then how come companies are making money off the internet?

[Earl Mardle]

Name 5

[M. Simon]

Without profit profits decline.

i.e. without some income that exceeds costs there is no money to reduce costs.

[Earl Mardle]

2 points.

Costs for many things, from raw materials, non-renewable consumables and human labour are already too low, that's why there is a profit.

The other is that the internet creates an economy where profits are not concentrated but one where they are distributed.

Moore's law, for example, reduces the cost of computing power, but nobody has been able to corrall the increased difference, it always leaks out to the end consumer. The more peope who are connected, the faster this will happen and the more industries that will be affected.