The Morality of Profit; C. Russell

I don't sell food, but I do sell re maindered books and operate a pa perback exchange. I own the build ing my bookstore is in; I live behind the store and rent the apartments upstairs. Both my books and my apartments are for people, and both Mr. Russell owns a bookstore in upstate New York. 350 bring me a profit. My income is com pletely dependent on customers who buy my books and tenants who rent my apartments. I do not get a reg ular paycheck. Each week, indeed, each day, is different and brings a greater or lesser reward for my ef forts. How much money I have to pay the mortgage, the taxes, the utili ties, and the other bills owning a house and a business entail-even the amount I have for food-is en tirely up to the public. I cannot force them to support me. I can't even force them into the store or the apartments. They have to come of their own free will. They have to come because they want to.

How do I get them into the store? I attract them by offering the best THE MORALITY OF PROFIT 351 books I can find at the best possiblE~ prices. First, of course, I have to buy the books. There are several com panies out there bidding for my busi ness. One of them, my main supplier, sells me books in quantity. Though I don't know what titles I'm getting, I do know the price is better than any other company's I deal with, and the more books I buy at once, the lower the per-copy price. I then supple ment what I have with specific titles from other companies. They charge more but I choose exactly what I want. Supply and Demand What then do I charge for these books? Certainly I can't sell them for cost. If I did, I'd quickly be out of business. Instead, I charge as much as I can for them. Just as the cus·· tomer wants the most for his money, I want the most for my product. I want to pay my bills, I want to eat, I want my store to grow and im·· prove, and I want to save for those days when I don't make very much.

It's not only in my interest to get the best price I can but in my customer's as well because the more profit I make, the more secure the business will be and the more books I'll be able to stock, giving my customer a wider and wider selection to choose from. Naturally, I can't sell the books for as much as I'd like, only as much as I can get. For one thing, I have direct competition. In the paperback ex change on Main Street, a customer trades in two books to get one free. In mine, he turns in one book to get another of equal value for 25¢. The other bookstore on Main Street sells a few remainders as does the one in the mall, though neither has as many as I do and their prices are higher. I also have indirect compe tition in the form of bowling alleys, movie theaters, libraries, and every other place people patronize in their leisure time. My usual price for remainders is $1.98, though I do have a few at $2.98. Most things marked higher won't sell; to my customers, $3.98 is just too much money. Therefore I can't make more profit by raising my prices, only by lowering my costs. I make more profit on books from my major supplier, because my costs are lower, than on those from my minor suppliers. I also lowered my overall costs by building my shelves myself rather than buying them and by running my business out of the same building I live in rather than renting a separate place.

My apartments have to be profit able, too. Indeed, why should a ten ant pay my cost for the apartment? He did not have to put a down pay ment on the building. He does not have a mortgage and is free to leave on thirty days notice, or less if he wants to forfeit his security deposit, whereas I'm tied down here. He is 352 THE FREEMAN not responsible for the taxes, the utility bills, the maintenance, or the repairs; I am. Competition Defines How Much the Market Will Bear How much do I charge, then? As with my books, I charge as much as I can. And again as with my books, it's in the tenant's interest to do this as well as my own. If I charge too little, I won't have enough for im provements or repairs. If the ten ant's refrigerator breaks down, or the roof springs a leak, I won't have enough money to fix it. Two years ago, the city government here started enforcing its housing code. Without profit from rents, I would not have been able to afford the $1000 it took to bring the house up to code, and my tenants may well have been evicted by the city! It's in the tenant's interest as well as mine to charge as much as I can because that's our only insurance that the house won't deteriorate.

Still, I can't charge as much as I'd like because there is competition in rentals just as there is in books. If I want too mqch, the tenant can al ways find another place at a more attractive price. The way to increase my profits here, as with my books, is to lower my costs. For' example, several years ago I had the building insulated. While it was a high intitial cost, it has since more than paid for itself by cutting my monthly fuel bill in half. To say "food for people, not for profit" is to misunderstand the ne cessity of profit. Without it, there may well be rio food. You only have to think of the starving millions in Africa, or the chronic food shortages in socialist countries around the world, to realize that. Without profit, there is no production. With profit, production is abundant because pro duction is what benefits others, and if you don't benefit others with goods and services, they won't benefit you with money.

The slogan also makes a false dis tinction and fails to understand the morality of profit. There is no either/ or here; profit is not to the exclusion of people. The two go together. Pro ducers, after all, are people too. I do not steal from my customers and tenants when I sell and rent. We ex change. We satisfy and benefit each other by trading what we have for what we don't have. Both sides gain in free market transactions. Once I've lowered my costs and raised my prices as much as possible, the only way I can profit further is to benefit more people, who in turn benefit me. This, then, is the essential, inescap able morality of profit: people help ing people and i~proving each oth er's lives. @) Bettina Bien Greaves ................................-........... ,..' ...•,......., -..'. ... .., -._.' .~ : . ;" Language J ...........\ li·aps :; .~ ....... ! :i : ! : ~ i ~ ~ .......................................