What's Wrong With Capitalism: Profits and Losses—Price Signals Part 9

In this final part in response to ContraPoints video on what's wrong with capitalism, I address the argument on profits and losses in relation to do with price signals. ContraPoints doesn't understand the fact that, without the information of price signals, there is no way for central planners under socialism to be able to work out production for consumers.

In a market based economy, prices fluctuate and are driven by consumer demand and only by consumer demand will you get the information of profits and losses, after all, it is the consumer that determines freely what profits are and losses. This brief explanation should help give an insight to what profits REALLY are and why it is a grave mistake to wrongly assume that profits are merely some sort of obstacle or problem. To oppose profits itself, as well as losses, is to support such a system that goes down the road of economic inefficiency.

Another issue is the knowledge problem, argued by F. A. Hayek, that without such knowledge, central planners could not possibly work out HOW such goods are produced.