Scott, boiled down, your argument is that if a company has to spend any cost savings on legitimate corporate expenses instead of shareholder distributions that it will refuse to save that money, that it will deliberately not earn more money if it can only spend that additional money on actual business expenses instead of shareholder distributions.

Your argument is that when given the opportunity to save $50 million in costs the board of directors will say, “Well, if we saved that money we’d have to spend it on valid corporate purposes instead of distributing it as a dividend, so let’s not save that money.”

On its face of it that argument is silly to the point of being ridiculous.

That’s because that isn’t your real objection to a cap on profits. It’s just a cover for your real objection.

Your real objection to a cap on corporate profits is that it violates one of the principal rules in the catechism of your political religion, namely your belief that there should be no restrictions on what businesses can do, period.

Your philosophy is that if a pharma company can find a gap in the antitrust laws that lets it quintuple the price of a vital generic drug that it should be free to do so, that no damage it does to the economy, health insurance rates or people’s health is enough to overbalance the “right” of the company to get as much money as it can get away with.

Your philosophy is that anything that allows a person to get more money is OK no matter how great the damage that flows from that conduct, that there should be no rules limiting profit-making conduct.

You see profit as a goal instead of a tool, but everything, including profit, is a tool that it is useful only to the extent that it accomplishes a goal.

Because every tool has an operating range where it works well and boundaries beyond which it works poorly or dangerously, we use tools within the boundaries where their operation is more beneficial than it is harmful.

Fire is very useful, but taken to extremes it is also damaging. So is salt, sugar, government, automobiles, speech, religion, the Internet — everything that is useful in meeting some need can and will also be damaging when taken to extremes. That includes profit.

Profit is not a goal. It is a tool used to reach a goal, namely a prosperous, efficient, harmonious, innovative, and free society. When that tool is taken to extremes in order to increase shareholder and executive distributions, like every other tool taken to extremes, it causes more damage–poorer quality products, higher prices, more fees, poorer service, more pollution, etc.–than good.

Your philosophy doesn’t care if profit becomes harmful because it doesn’t see profit as a tool but as a goal. All your political religion cares about is preserving the freedom of the person making the profit to do whatever he wants in order to get more.

You can have that philosophy if you want. But instead of making silly arguments that if a company will have to spend cost savings on business needs instead of distributing them to shareholders that it will refuse to save any money at all, just be honest.

Just say, “My political religion says that companies should be able to get as much money as they can any way they can and any limitation on their ability to do that violates the rules of my political religion” because that’s really what your objection to capping profits is all about.

Graduate of Stanford University & U.C. Berkeley Law School. Author of 17 novels and over 200 Medium columns on Economics, Politics, Law, Humor & Satire.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store