Wednesday, September 11, 2013

Profit Maximization Is A Fleeting Thing!

It is inaccurate to describe human beings as merely profit maximizing economizers! First of all, decisions made by humans are not simply monetary. There is a psychic cost, the lost ‘utility’ of the next best alternative that one has to forgo, to every action taken. And there is a psychic revenue that results from the increase in happiness that comes from the action chosen.

In this sense profit is purely subjective and cannot be measured. Even if we were speaking about both monetary and non-monetary profit, profit maximization is a fleeting thing since the real world is always in a state of disequilibrium, never really reaching equilibrium.

Twitter @DivineEconomy

Check out my new website:

No comments: