[greenhexagon]

This is more like, a gross oversimplification of the first chapter of a freshman intro to economics.

This is to economics what "assume the cow is a perfect sphere moving on a frictionless surface without wind resistance" type of problem is to physics.

In the real world, profit absolutely does not correspond to "taking advantage" or "extracting value through arbitrage".

[mcmcmc]

Just because you dislike it doesn’t mean it’s not a useful framework. And yes, it does come up in first year econ classes, as well as in advanced courses that study the history of economic thought. If you bothered to read the linked page or do your own research on “economic profit” you would realize that the “normal profit” you’re thinking of is a distinct subject.

Edit: also keep in mind that literally all of economics up until relatively recently relied on broad assumptions like the rational consumer. Kepler thought the sun was the center of the universe, does that invalidate his laws of planetary movement?

[roarcher]

> Just because you dislike it doesn’t mean it’s not a useful framework.

You've got your arrow of causality backwards. People dislike it because it's a useless framework when taken in the simplistic way you've presented it.

The actual concept doesn't say that you can only make a profit by stepping on people's heads. It says you can't profitably do the same thing in a market forever. You have to introduce new and better products, which you can profit from until your competitors catch up.

[lazide]

The implicit assumption you seem to have here is that building the “machinery” to get to the point of a “frictionless”/perfect markets is not fundamentally valuable to everyone.

The implication in fact is that it’s immoral to be ‘paid’ for doing so?

I’d argue that just makes the world a poorer place overall, as there is no direct incentive to do things better. In the typical environments this plays out, there is actually a lot of incentive to do things worse.

Cost plus is one way of doing this kind of thing, and that gives strong incentives to inflate costs, for instance.

gov’t budgets are another, and anyone who has worked in the government or other large organization knows you’d better spend your budget each year or you’ll lose it. So no one ever has any left over short of something crazy happening.