Gain

Gain. Action and effect of winning, esp. in trade . In economics , profit that an individual obtains from his property, his work, etc. In accounting , credit balance of the profit and loss account. Gains and losses Account in which the losses or increases experienced by the merchant’s goods are recorded. Surplus income received by the capitalist for his capital investment. Metamorphosed form of surplus value .

Profit is also known as economic profit and implies the economic remainder that an actor benefits from as a result of carrying out a financial operation. Simply put, it is the ratio of total revenue minus total cost of production, distribution, and marketing of a particular product or service.

Summary

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  • 1 Synonyms
  • 2 Types of profit
  • 3 Profit share
    • 1 Overall Average Profit Share
  • 4 Capitalist profit
  • 5 Profit of the entrepreneur
  • 6 Public economy and finance
  • 7 Consequences
  • 8 Sources

Synonyms

Business, utility, profit, performance, farming, profit, achievement, usury, profit, product, fruit.

  • Profit, benefit and performance are felt as select terms, preferred in the laws.
  • Farming, profit and achievement suggest greed for profit and are often taken pejoratively or as synonyms for usury.
  • Profit, product and fruit are of very general significance and can be applied to the concept of profit.

Types of profit

  • Minimum profit: It is the one that the capitalists obtain and that allows them to continue as such.
  • Average Profit: Average or general share of profits that capitalists obtain by investing the same amount of capital.
  • Extraordinary Profit: It is the one that some capitalists obtain above the average profit.
  • Industrial Profit: That obtained by capitalists who have their investment in some branch of the industrial sector.
  • Commercial Profit: That obtained by the capitalists who have their investment in the sphere of trade.

By investing in stocks, shareholders make three types of profits or returns:

  • Capital gains : Buy low, and sell high. The investor expects that when buying shares, they will increase in value over time. If the stock market rises, the capital gain increases when it comes to selling the securities; that is, the market price of the stock rises. If interest rates drop, it grows, and it pays off.
  • Dividends: When a company distributes profits, this percentage to be received for each share is called a dividend. First, the company must have benefits, and on the other, it must decide whether or not to distribute the dividends. There are companies that usually distribute benefits and others that are rare the year that they provide it.
  • Preferential subscription right: When a company increases its capital by issuing new shares, current shareholders have a preemptive right over the acquisition of new shares. If these shares are resold, they will make an immediate profit. The shareholder must pay the nominal value, and sometimes a premium that is called issue. Other times if the expansion is released, the investor does not pay any amount, and it is the company that assumes the nominal value of the share (With these new shares that come free, the investor can sell them whenever he wants).

Profit share

Ratio of surplus value (usually of the annual mass of surplus value) to all paid-up capital, expressed as a percentage. The rate of profit characterizes the efficiency with which capital is used, the profitability of the capitalist company.

The profit quota is a metamorphosed form of the capital gain quota. It covers capitalist exploitation, since the profit is presented as generated by all the paid-up capital and not by its variable part. The magnitude of the share of profit depends on the share of surplus value and the organic composition of capital. The higher the share of capital gain or degree of exploitation of wage labor by capital, the higher the share of profit. As a result of competition between the various branches of production, an average (general) profit is established on capital of the same magnitude. With the development of capitalism, the organic composition of capital grows and this causes the share of profit to decrease. Several factors oppose this trend (increased exploitation of workers, economy of means of production, etc.). The rate of rotation of capital influences the increase in the rate of profit obtained in a year, on which the amount of annual profit depends. As the rate of rotation of capital increases or decreases, the profit share increases or decreases, respectively, the analysis of the factors that influence the magnitude of the profit share shows that it is not created in the sphere of circulation, but during capitalist production, and the increase in the share of profit depends on how the degree of exploitation of the working class grows. The rate of rotation of capital influences the increase in the rate of profit obtained in a year, on which the amount of annual profit depends. As the rate of rotation of capital increases or decreases, respectively, the profit share increases or decreases, the analysis of the factors that influence the magnitude of the profit share shows that it is not created in the sphere of circulation, but during capitalist production, and the increase in the share of profit depends on how the degree of exploitation of the working class grows. The rate of rotation of capital influences the increase in the rate of profit obtained in a year, on which the amount of annual profit depends. As the rate of rotation of capital increases or decreases, the profit share increases or decreases, respectively, the analysis of the factors that influence the magnitude of the profit share shows that it is not created in the sphere of circulation, but during capitalist production, and the increase in the share of profit depends on how the degree of exploitation of the working class grows.

Profit (and its share) constitutes the driving spring of capitalist production. The quota of profit reflects both the antagonistic class relations between the bourgeoisie and the proletariat , as well as the relations within the exploiting class itself, between its groups and people in the struggle to seize part of the profit by distributing it . Under the conditions of capitalism, when monopoly capital prevails, monopolists obtain a high monopoly profit significantly higher than the average share of profit.

Average overall profit share

Equal share of profit produced by capitals of the same amount regardless of the industry in which they are invested. It is equivalent to the relationship, between the global surplus value created by the worker and capital, global anticipated by the capitalist class and invested in all spheres and branches of the capitalist economy.

The inequality – inherent to capitalism – that the development of companies and branches of the economy presents finds its expression in the diverse organic composition of capital. Under these conditions, capitals of the same magnitude extract unequal masses of surplus value. In the branches with low organic composition of capital, capitals being equal, more capital gain will be produced than in branches with high organic composition of capital. When selling merchandise for value, in the low organic composition branches of capital the profit share will be greater than the profit share obtained in the high organic composition branches. In the process of competition between branches of production and as a result of capital moving spontaneously from branches of production with a low share of profit to branches where the share of profit is high, the different shares of profit are equalized. at an average (overall) profit share. The leveling of the share of profit causes the goods to be sold on the market at the price of production.

The formation of the average share of profit means that surplus value is redistributed among the capitalists of the various branches of production according to the principle: equal capital, equal profit. Although the average share of profit arises as a result of the sharp competitive struggle between the capitalists, it expresses, at the same time, the class solidarity of the capitalists to increase the exploitation of the proletariat. Every capitalist is interested in raising the degree of exploitation not only of his workers, but also of the working class as a whole. Ultimately, the profit of each capitalist is their share of the entire mass of surplus-value that the working class produces. In this, Marx writes,

“We have … the mathematically exact proof of why the capitalists, despite the quarrels that separate them in the field of competition, constitute a true Freemasonry when they jointly confront the collectivity of the working class”

As capitalist production develops, the organic composition of social capital rises and capital turnover slows, giving rise to the law of the decreasing tendency of the share of profit. The capitalists try to counteract the reduction of the profit quota by intensifying the exploitation of the workers. This makes the contradictions between the proletariat and the bourgeoisie sharpen. Under imperialism , when monopoly capital dominates, the major monopolies make a high monopoly profit, significantly higher than the average share of profit.

Capitalist profit

Metamorphosed form of surplus value; a surplus (income) appears on capital investments and the capitalist appropriates it free of charge. The transformation of surplus value into profit is due to the fact that the capitalist disburses capital not only to contract labor power, but also to acquire means of production, without which the production process cannot take place, the process in which it is created. capital gain. For this reason, the surplus value presented in this way as the result of all the capital paid up, takes the metamorphosed form of profit. In reality, however, the source of profit does not comprise all capital, but only the part invested in labor power. The form of profit conceals the real origin of the latter: the exploitation of living labor by capital. The fact that surplus value is converted into profit is conditioned by the fact that surplus value only manifests itself effectively in the process of realization of the commodity, and it does so under the aspect of difference between its price and capitalist production expenses, it is that is, under the aspect of profit that the capitalist receives after each rotation of capital. The owner of the capital is indifferent to the fact that in his company such or such use values ​​are manufactured; for him only one thing matters: making a profit. Achieving maximum profit for capitalists is the determining purpose of capitalist production, its main motive. He who, in the race after the gains, lags behind, is ruined in the competitive fight. and it does so under the aspect of difference between its price and capitalist production expenses, that is, under the aspect of profit that the capitalist receives after each rotation of capital. The owner of the capital is indifferent to the fact that in his company such or such use values ​​are manufactured; for him only one thing matters: making a profit. Achieving maximum profit for capitalists is the determining purpose of capitalist production, its main motive. He who, in the race after the gains, lags behind, is ruined in the competitive fight. and it does so under the aspect of difference between its price and capitalist production expenses, that is, under the aspect of profit that the capitalist receives after each rotation of capital. The owner of the capital is indifferent to the fact that in his company such or such use values ​​are manufactured; for him only one thing matters: making a profit. Achieving maximum profit for capitalists is the determining purpose of capitalist production, its main motive. He who, in the race after the gains, lags behind, is ruined in the competitive fight. The owner of the capital is indifferent to the fact that in his company such or such use values ​​are manufactured; for him only one thing matters: making a profit. Achieving maximum profit for capitalists is the determining purpose of capitalist production, its main motive. He who, in the race after the gains, lags behind, is ruined in the competitive fight. The owner of the capital is indifferent to the fact that in his company such or such use values ​​are manufactured; for him only one thing matters: making a profit. Achieving maximum profit for capitalists is the determining purpose of capitalist production, its main motive. He who, in the race after the gains, lags behind, is ruined in the competitive fight.

In the era of free competition, entrepreneurs were content with the average profit. In the period of imperialism , the monopolies, intensifying the exploitation of the workers of their countries, plundering the peoples of the dependent and backward countries, resorting to the militarization of the economy and war, and also appropriating part of the profits of the Non-monopolized entrepreneurs, they extract monopoly super profits. In socialist society profit is the net income of society created by the additional labor of workers in material production.

Profit of the entrepreneur

Part of the average profit obtained with capital borrowed; industrial and commercial capitalists appropriate it. In order to obtain higher profits, capitalists, to expand production, not only use their own capital, but also loan capital, which they obtain from other capitalists who have a monetary surplus. This capital is used to purchase means of production and labor power. By exploiting wage labor, the capitalist extracts surplus value which takes the transfigured form of profit. When the capitalist uses loan capital in production, he must deliver part of the profit to the lender. Consequently, the profit is divided into two parts: the profit of the entrepreneur, from which the industrial or commercial capitalist appropriates, and the interest, which is appropriated by the capitalists who have loaned the money. The division of profit into profit of the entrepreneur and interest conceals capitalist exploitation, and disfigures the real nature of these parts of surplus value. On the other hand, this division of surplus value gives rise to certain contradictions between the capitalists who lend money and those who use it, since within given magnitudes of profit, that of interest and that of the entrepreneur, they are in relation to each other Inverse: the higher the interest, the lower the entrepreneur’s profit, and vice versa. However, this contradiction does not eliminate the community of class interests of both groups of capitalists: both the capitalists who lend money and those who use it are interested in increasing surplus value, that is,

Public economy and finance

From its beginnings, Economic Science has dealt with the problem of determining what profit is, that is, what should be attributed to it and where it comes from. The solutions have been diverse according to the economic schools or the theoretical approaches that have been adopted.

Profit is the basic objective of every Company or firm that must make use, therefore, of the optimal combination of Productive Factors to reduce their Costs as much as possible, at the same time attracting the demanders of the Goods or services that it produces to sell these at the highest obtainable price.

In any case, modern conceptions of the problem do not define profit as a category of income different from the others and insist, in one way or another, on its relationship with risk and the uncertainty of economic activities.

  1. Value of the Product sold, discounting the Cost of inputs and Depreciation , payments to contracted factors, such as wages, interest and leases. Therefore, the profit is the implicit remuneration to the factors contributed by the owners of the Company.
  2. Net Product Value sold less payments to all Productive Factors, including the Opportunity Cost of the factors contributed by the same owners of the Company. In this concept, profit is compensation to the owner for his initiative and effort to assume the risk.
  3. Profit, benefit or benefit of economic order obtained by a Company in the course of its operations.
  4. the difference between the Price at which a Product is sold and the Cost thereof.
  5. Benefit, profit or advantage obtained from the performance of a job or activity. More specifically, in commercial activities it is the profit obtained as a difference between the purchase price of a product and the sale price.
  6. remuneration that the Entrepreneur obtains for his Work, which derives from waiting or abstinence, or which is the reward obtained when the risk of investing Capital in productive activities is assumed.
  7. What is earned, particularly money. Difference between the income of a company and the set of charges related to the production and sale of its goods and services.

Consequences

The search for profit is decisive in the growth of the economy, it forces companies to seek the highest possible Profitability, incessantly incorporating the technological advances available and trying to make use of all the existing economies of scale, to thus be on the border Production Efficiency. On the other hand, it allows new Venture Capital to enter the Market, since the latent Demand of Consumers stimulates the generation of Goods and services that, when they satisfy such Demand, produce a Profit for the Entrepreneur.

In the same way, the absence of Profits or a recurrent decrease of the same allows to direct the work of the companies towards the areas that are of greater interest to Consumers. The Company that does not adapt to the Demand is first marginalized and then expelled from the Market, since the absence of Profits forces it to withdraw from the Competition or to undertake new and different activities.

 

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