When you talk about perfectly competitive markets having no profit, you’re probably thinking of the term “economic profit”. The sort of profit everyone usually thinks of is revenue minus cost, which is called accounting profit by economists so as to distinguish it from economic profit. Also economists are really bad at naming things. Economic profit is revenue-costs-opportunity costs.
In perfect competition, firms do make accounting profit, but they don’t make economic profit.
Thanks for posting your model here and getting involved in the discussion. It’s always good to be able to discuss these things publicly because I’m sure many people are learning a lot from it.
These are all excellent points. The increase in labor productivity accruing to immigrants to e.g. the US is often discussed by economists. I’ll grant that it’s not often discussed in general media, which is part of PhilGoetz’s point, but I’m sure I’ve seen it there too.
Also, many economists have argued that in certain contexts immigration (even low-skilled) does result in economic gains for the native born. The argument goes that immigrants’ negative impact on native born wages is small and that this small change is more than offset by the immigrants’ ability to make domestic goods cheaper. People earn less, but things cost less still. In this scenario GDP per person has gone down, but native born purchasing power has increased. And the immigrants are far better off- their labor productivity has increased through the place premium and (related) their wages are almost certainly higher than they would be in their country of origin.
A final point:is that total GDP in some contexts can actually be a good in itself. Having a country with a large GDP is very meaningful politically. The fact the Norway and Qatar have higher GDP per capita than the US is meaningful and worthy of discussion, but the US matters far more to global politics and it’s due primarily to one reason- the US is responsible for one quarter of the entire world’s nominal GDP. Along some margin, allowing immigration that lowers GDP per capita but raises total GDP can be beneficial to members of a country purely based on international economic strength.