What is economic profitability? Reflections ...

Current Economy and Sustainable Development-compatible? GDP growth (at all costs), economic development, inflation ... How concillier the current economy with the environment and sustainable development.
Christophe
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by Christophe » 02/03/08, 09:31

Arthur_64 wrote:If I buy an object - let's say a car - that lasts a very long time, that does not need a lot of maintenance, that consumes little fuel, ... it's profitable for me.

This vehicle, I keep it a long time so I do not renew it and it does not need a lot of maintenance: it is not profitable for the manufacturer.

(...)

It's all about repository. What is interesting for the consumer is not necessarily for the seller.


Exactly, the notion of profitability is obviously subjective but be careful, a car is never profitable in itself, it can simply be more "profitable" compared to another car. Economically, a car is a deadweight loss.

By reading your different opinions, I think that we have therefore identified (at least) 3 profitability definition points:

a) she is economic : at least indirectly, the economy is the tool that allows to estimate the notion of profitability
(b) it must be comparative : nothing is profitable in itself
(c) it depends on the entitité : ie the person who bought the "profitable" object
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Ahmed
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by Ahmed » 02/03/08, 18:38

Economism has contaminated our perception of things. This is why the notion of profitability seems so vague. This term measures the gain (or loss) in relation to an investment, as part of a trading exchange. It therefore concerns only one company. Take an example cited by Christophe:
An individual may choose a car whose cost to purchase and / or use will be + or - advantageous, but we can not speak of profitability since it is a simple final consumption. Conversely, a taxi driver can talk to him about profitability.
It should be understood that this term does not cover common sense: many profitable activities for companies are catastrophic for the community (this is what explains a good part of "growth").
Take for example this large group that manufactures chemicals and manages water treatment plants: it is paid to pollute and then clean up.
Another example (we could multiply them!), A company has an interest in relocating its production by dismissing people who will be supported by the community.
In a narrower sense some activities are profitable only because some of their costs are outsourced, this is the case of agriculture that pollutes the water without bearing the financial consequences (it is true that it is rather the l fertilizer-phyto industry which is responsible).
If we want to define, as some suggest above, a social "profitability", it would be better to get out of this context and find an appropriate terminology: let's stop considering ourselves as only producers / consumers and find our human dimension.
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