by Locker Room contributor
You’ve no doubt heard collectivists rail against “obscene profits.”
Economist Thomas Sowell, true to form, offers a good response. You’ll find this one in his essay collection, Ever Wonder Why? (Hoover Press, 2006).
To the economically illiterate, if some company makes a million dollars in profit, this means that their products cost a million dollars more than they would have cost without profits. It never occurs to such people that these products might cost several million dollars more to produce if they were produced by enterprises operating without the incentives to be efficient created by the prospect of profits and the fear of losses.
If “obscene profits” are what cause pharmaceutical drugs to cost so much, why haven’t socialist countries set up their own government-owned pharmaceutical enterprises to produce drugs more cheaply? Why don’t non-profit organizations here do that?