ABSTRACT
This chapter examines the function and determination of profit under modern Socialism, its distribution and its relation to prices. The function of profits in specific respects depends on the manner in which profits are shared. The first claimant on the enterprise profits is usually the State. The proportion of gross profit on the national scale absorbed directly by the State normally varies in different countries according to the degree of financial decentralization. Acceptance of profit as a criterion of enterprise performance and efficiency necessitates the rationalization of the prices payable to producing enterprises. Under capitalism profit is the mainspring of economic activity. Private enterprises are set up in search of profit, and in pursuing this objective production becomes a means whereby employment is provided to labour in conjunction with other resources. The chapter concludes by examining some misconceptions, common in capitalist countries, on Socialist profit.
