[lbo-talk] profit-as-investment ?

Doug Henwood dhenwood at panix.com
Mon Oct 24 07:50:01 PDT 2011


On Oct 24, 2011, at 9:00 AM, Wojtek S wrote:


> In national accounting, operating surplus (i.e. "profit") is
> "distributed" into several "components" - distributed income of
> corporations, taxes, social benefits, final consumption, and savings,
> the latter basically ending up as investments of one sort or another.

Yeah, but you're sort of mixing the income and product sides of the NIPAs. Profit is income, investment is product (expenditure of income).

I think what they mean is that profits should be used to fund investment, not luxury consumption. But who knows, since it makes no sense.

Doug



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