“If you make 100 loaves and sell them for 99 cents each, you’ve provided 1 dollar of value to society, but made 100 dollars for yourself. ”
The argument here is that since the loaves are worth $1 to each consumer, and they pay $0.99, they gain only one cent by buying them. (That’s improbable, since they would likely not buy them at all if it was only as useful as picking up a penny.) The problem is that something is going to happen to that $100 that the seller takes. If the seller does not spend it, then the average value of money in society will go up, meaning that society will have profited by $100, not by $1. If the seller does spend it, others will receive that $100 in return for other things that they valued less. And so once again, society will profit by more than $1.
“If you make 100 loaves and sell them for 99 cents each, you’ve provided 1 dollar of value to society, but made 100 dollars for yourself. ”
The argument here is that since the loaves are worth $1 to each consumer, and they pay $0.99, they gain only one cent by buying them. (That’s improbable, since they would likely not buy them at all if it was only as useful as picking up a penny.) The problem is that something is going to happen to that $100 that the seller takes. If the seller does not spend it, then the average value of money in society will go up, meaning that society will have profited by $100, not by $1. If the seller does spend it, others will receive that $100 in return for other things that they valued less. And so once again, society will profit by more than $1.