Michael Munger on Industrial Policy
EconTalk
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The Profit and Loss System
Ludwig von Mises was the clearest articulator of the system of profit and loss as an industrial policy. The idea that there's a particular price in the capitalist system, which is I compare the amount of revenue that I get from consumers to the costs of what it took me to make the thing. If my revenue exceeds my cost, we call that particular price a profit. And that profit is an indication that this activity is socially valuable.
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