ABSTRACT
When people speak of profiteering they do not seem at all clear whether they are referring to the profits of a firm as a whole or to the profit on a particular transaction.
With regard to high profits as a whole, previous dis cussion should have made it clear that profits necessarily differ from firm to firm according to the size of the firm and the general efficiency of production. This must con tinue owing to the differing cost of production so long as the different firms sell at the same price. For firms to sell at different prices would ruin the less efficient firms and cause a shortage of supply. Neither would it be approved by the public, who bitterly complain if they are asked to pay more at one place than another. Immediately after the war there was a certain legitimate grievance owing to the great differences in retail prices in the same article. This was due to the general breakdown of market organization and the upheaval of prices, which made it difficult to judge values. Normally there must be differences in profits, and the only question arises if it is
advisable to tax the higher ones. The difficulty is that such a tax tends to check efficiency since high profits are an incentive to good management.
