ABSTRACT
We back into this chaos by indicating five popular meanings of profits to which our chapter will be largely irrelevant:
(1) "Profits" comprise all nonlabor income. (In Marxian economics, only the wages of direct labor-production workers-are excluded.)
(2) Profits or "business incomes" comprise all implicit returns not actually paid out to other firms or to outside suppliers of inputs. (They may be measured gross or net of reserves for inventory replacement, depreciation of fixed capital, and the like. The reserves, too, may or may not be adjusted for obsolescence, price changes, and so forth.)
(5) The profits of an individual or an enterprise comprise the changes in his (or its) net worth in the accounting sense, insofar as they can be associated with the operations of particular business enterprises rather than with "extraneous" changes in asset values.
