Dear E:

I give to charity. I don’t tithe, but I do give several thousands of dollars to charity every year. Why do I do it? I do it because I place greater value on the Cancer Society, for example, having that $100, than I place on me keeping it.

I’m not turning, not denigrating, anything. I’m just stating a fact. If I didn’t place greater value on the Cancer Society having that $100, than I place on me keeping it, I wouldn’t give that money to them.

I improved my economic welfare by giving them the money. If you don’t want to say I profited from it, that’s ok. But, I did benefit from it. And, I’m not talking about any tax write off.

Also, I used to work for the non-profit Fraser Institute. I benefited from doing so; I regarded the salary they paid me more highly than the labor I had to expend in order to earn it. Thus, I earned a profit. The people who set up this organization also profited from it. They saw, at least ex ante, that the benefits they derived from the existence of this organization was greater than the money and hard work they undertook to set it up. They, too, profited. There is simply nothing wrong, per se, from earning a profit.

Now, of course, criminals too, fraudsters, earn a profit, again at least ex ante, or, they would not engage in these activities. But, as a libertarian, I do not approve of any such profits. These robbers ought to be put in jail.

But we must make a valiant effort to distinguish between these two sources of profit. In the market, both parties gain profit. A sells B a toy for $20. A values it at less than $20, say, $15. This vendor earns a profit of $5, roughly speaking. If he didn’t value the toy at less than $20, he wouldn’t have sold it for that price. B values the toy more highly than $20. If he did not, he would not have made this purchase. Posit that B valued it at $30. Then, he made a profit of $10. This is the “magic of the market”! BOTH parties to this trade, to ALL voluntary trades, earn profits thereby. In sharp contrast, if C robs D of $100, for former gains, but the latter loses. That is robbery.

Best regards,

Walter

The Best of Walter E. Block