Sunday, November 4, 2012

What is Profit?

The other day I was talking to a young man, who seemed almost obsessed with his concepts of 'business' and 'profit.'

Now, I am not opposed to business (or taking care of it), nor profit. But as he began to tell me the importance of getting contacts and followers of some online venture of his, I got the impression that his idea of profit was simply the hoarding of currency.

So much so, that the concept of investing capital back into improving the business had not yet occurred to him.

Granted, he was not much more than 20, with the business experience of a part-time job or two and that of any other freshman who has split an ounce into dime bags and sold them on the quad.

So, I hit with the big Q first, "So kid, how do you determine what your profit is?"

"Money in the bank, duh."

I then ask, "What about the your contacts?"

"That's where the money comes from. They pay to be member of the club."

He is not wrong so, "That's true, but it's not that one dimensional... What is the value of your exposure through these contacts? Don't they bring you more contacts, which then bring you more money... So dose the profit generated from those early contacts add to their value? How do you quantify that?"

And so on, through what I imagine to be a standard business 101 course, a couple PBR's, a joint, Cheeze-its, etc.

By now I'm asking him to consider the "profit"required from natural resources to sustain the nutritional and physical needs of one human life (land to grow food, raise livestock, grow lumber, mine ore, fresh water, etc...) and then equate that into acreage.

So how many acres of land/ water does it take to support one human life (and all its buildings, and tools, and the tools to make those tools) for, say 70 years...

Let's just say, 10 acres (about four city blocks, big place for just yourself). Per person, for their entire life. Multiply that by say 8 billion.

80,000,000,000 acres = 125,000,000 Sq miles.

Area of land on the surface of the Earth, 57,268,900 Sq Miles.

And, that's not including ALL the rest of the life on this planet.

SO, what about profit? How did we get here?

If taking more than you NEED is the definition of profit, that is a troubling thought.

There's just not enough to go around.

What about businesses that profit in the traditional way, but at the same time focus on "using" less and "creating" more. Making money through neo-efficiency; instead of monoculture and production lines why not production webs? The natural world does it best. Just ask TED.

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