Re: "Earning" One's Wage

On Wed, 17 May 2006 14:22:48 -0500, "Jim Blair" <jeb@xxxxxxxx> wrote:

<royls@xxxxxxxxx> wrote in message
news:4430993d.43774602@xxxxxxxxxxxxxxxxxxxxxxxx
On Sun, 02 Apr 2006 17:10:11 -0400, Robert Vienneau
<rvien@xxxxxxxxxxx> wrote:

o All firms make the same rate of profits

These assumptions are all dramatically and fundamentally at variance
with actual conditions in real-world economies, capitalist or
otherwise. The mathematical result therefore has no relevance to
real-world economies......

Do all firms not "make the same profit" over an extended time interval?

No, of course they don't.

I would like to see some data on profits as a percent of investment and
percent of sales for different industries averaged over a decade or so. How
much variation is there?

Google might be able to help you.

The expectation in a free market economy is that higher than average profits
would attract more investment and so increase production and so reduce
profits.

Whose expectation? My expectation is that people will generally
invest lots of money in professional sports franchises, fashion houses
and movie studios even if they mainly lose money, and will not invest
much in funeral homes, rendering plants and sewage treatment companies
even if they make lots of money.

And conversly, for low profits. And a firm would be expected to direct its
resources where the profits are highest, meaning away from products that are
thought to have no future and to products predicted to be in demand.

You mean like IBM treating PCs as a sideline to their mainframe
business?

For example while energy company profits are denounced today for being
excessive, I have read that over the last decade (or even last several
years) they are only slightly above the average of all industries, somewhere
in the range of 7%.

?? 7% of what?

-- Roy L
.

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