[aninhumer]

>Profit is (the monetary value of) the benefit to society of the product being produced.

No. Monetary value is not perfect measure of utility, because market demand is weighted by wealth.

A luxury yacht for one individual clearly provides nowhere near as much utility to them as an equivalently priced quantity of food would provide to a bunch of homeless people, but the market prices it as such because the individual is richer. If we could magically swap the yacht for the food, everything else being the same, society would be better off as a result.

We allow this inequality of demand because it is what drives the supply side towards efficiency, and for the most part I think this is a reasonable compromise.

But we should not confuse profit with utility.

[candiodari]

Again you're confusing some arbitrary ideological measure with utility. Social justice in this case.

Firstly profits of 5% of revenue are considered high, on average. That's what that yacht is paid out of, and that means that feeding many homeless with it wouldn't work in practice.

Second luxury articles provide firms with the rewards of motivation of their employees. Everyone in Silicon Valley keeps reminding us how that's the lifeblood of every company, and while I disagree with that, it's obviously useful, both to that firm and to society. So the yacht has more utility than you give it credit for.

[aninhumer]

> you're confusing some arbitrary ideological measure

Well I'm not using a well defined measure of utility here, but I thought it was fairly non-controversial to say that, at least in immediate terms, food for many people creates more utility than a yacht for one person.

That they're homeless isn't the point, and I should have left out that rehetoric. The point is just that they're less able to demand the food than the rich person is the yacht, despite it providing them more utility.

> luxury articles provide firms with the rewards of motivation

Yes, I said that. Inequality is what drives the supply side, and I agree that this may lead to better outcomes overall, but my point is that it complicates the process, and detaches money from being a raw measure of utility.

The possibility of a yacht may encourage someone to produce food more efficiently, but this is a lot harder to measure. Maybe the level of inequality doesn't matter that much as long as people perceive higher social status? Maybe the inequality reduces opportunities for many potential innovators, destroying more efficiency than it encourages? Or maybe the lack of security discourages people from taking risks even if they have opportunities?

I'm not asserting any of these ideas, just pointing out factors that confound measuring the utility created by inequality.