Economics
According to economists, the profit motive ensures that resources are being allocated efficiently. For instance, Austrian economist Henry Hazlitt explains, “If there is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself." In other words, profits let companies know whether an item is worth producing. In economic terms, maximizing profits ensures that resources are not wasted.
Karl Marx railed against the profit motive by arguing that profits come from the exploitation of workers. According to his labor theory of value, "All goods, considered economically, are only the product of labor and cost nothing except labor." He believed that that the bourgeoisie, or ruling class, profit by paying the proletariat less than his labor is worth.
Read more about this topic: Profit Motive
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