Rate of profit

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According to Mises, rate of profit is an absurd expression based on the false assumption that there exists a relationship between profit and capital. Profits are earned by superior foresight in adapting production to meet future shifts in consumer demand before competitors are aware of the need for such adaptation. Since profits cannot be related mathematically to superior foresight, there can be no meaningful "rate of profit."[1]


  1. Percy L. Greaves, Jr. "Mises Made Easier ", 1974. Referenced 2014-08-21.