Prof Bhaskar critiques the Union Finance Minister’s statement that profit isn’t a bad word, highlighting its complex economic realities and the need for nuanced scrutiny, exclusively for Different Truths.
Words convey many meanings, which the thesaurus shows. A combination of words that makes a sentence also carries many meanings. Some sentences, of course, do not carry meaning, like ‘boulder is spherical’, other than that the sentence is grammatically correct. However, in most of the situations, it is not a linguistic problem—it is a description of the life and living of people or at least a description of man-nature symbiotic relations. The words and sentences are also not like a spiderweb; the words are woven for some purposes, like the work of a weaver. The more skilled the weaver, the stronger the piece of cloth.
The context is the statement, of course innocuous, of the Finance Minister of the Government of India that I was fortunate to have perused from The Economic Times, June 01, 2025. The statement says, “…profit is not a bad word.” This needs clarification for the budding social scientists, at least.
Redundancy
What I find most is the redundancy of the statement, which opines that it is bad since the time of classical political economy. The whole of the organised market is based on the price-profit mechanism. This can be elaborated further.
By juxtaposition, who says wage is a bad word? The statements rotate because of the nature of the state – one is accelerated convergence to a trillion Rs economy that may run faster on the shoulders of the monopoly capitalists. The other is the wage economy. This also needs elaboration.
For any output produced for exchange, each of wages and profits is to be positive in the organised production system. In some systems, like a social economy and subsistence farming, profit is probably not estimated. For the unorganised segment of the economy that encompasses around 90.0 per cent of the working population in India, it seems difficult, if not impossible, to estimate profit when many of these workers are self-engaged, unpaid, and paid–unpaid intra-household and outside. The outside encompasses those who collect from common-pool resources.
In the organised industrial production, the rate of profit is an offshoot, specifically a product of labour productivity and inflation. Neither ‘high productivity’ nor ‘inflation’ is a bad word. The questions remain. Is the worker of higher productivity given an exit today? Do a falling real wage rate and a falling real interest rate continue for rising prices of final commodities? Not all participants are affected equally in such situations.
There is no debate that an upswing or prosperity is preferred to depression, for that generates surplus for distribution, as well as a part of that surplus ploughed back into production or spending on corporate social responsibility (CSR). The core state needs to make its position transparent on all this, rather than glorifying the term ‘profit’.
Wealth Creation
The quick sentence uttered by the finance minister was an argument in favour of wealth creation. Understood—national wealth and not the wealth of two tycoons. But wealth is the product of labour, just as profit is. It is to be understood that man does not create anything materially—he transforms nature, imagined as resources, by his labour. So, if anything is to be praised, it is labour.
In colonial history, mainstream records ‘wealth of nations’ as the coloniser Britain had 60 dependent colonies, plus India, in 1914. It was the wealth of Britain – ‘wealth of a nation’ – that was the consequence of loot-plunder and manipulative prices in trade. I believe that route is not being glorified when profit is being glorified, for loot-plunder may also explain accelerating profit.
The sharp economic inequality, whether recorded by data, explains the glorification of profit. The problems may emanate from the other side—further marginalisation of the middle section and mass society that constitute no less than 90.0 per cent of India’s population. Extraction from the bottom 90.0 per cent or dispossession by the top two per cent has a limit. For someone to be dispossessed, that someone has to possess something. In pauperisation, the core state may allow monopoly capitalists to grab the forests, mountains, lakes, and mines and glorify wealth creation.
Where did 8.0 per cent go in this calculation? It is the hidden section of the upwardly mobile who expect to get state benefits, not free food distributed through the Fair Price Shops. This 8.0 per cent echoes the state voice, talks in state vocabulary, and guides the media. If necessary, it miseducates the mass society.
Social Profit
It may seem paradoxical, but the fact remains that India’s society generates an economy that is culture-based. This includes organising Kumbh and Mahakumbh in Prayagraj in Uttar Pradesh and elsewhere, and then boasting about how much business occurred and the estimation of surplus or profit. And hence, investment possibilities apart from political possibilities. Economic profit in such cases is latent in ritual culture at the state level.
Parallel duties
While praising profit, it would have been better had the ex-post redistribution of profit been mentioned, like, one, taxes on profit that go to the government; two, taxes on the super-rich that go to the government; three, diversion of a part of profit to welfare activities that go to society; and so on. All these are premature suggestions because it is not yet clear if the finance minister included public enterprises that produce public utilities, and most of those are not guided by the maximisation of profit as the single objective.
The statement, however, may signal a major departure from the basic structure of India’s economy – from a ‘mixed economy’ led by the public enterprises and ‘socialistic pattern of society’ to a fully private enterprise economy or full-fledged capitalism. If India’s society is understood carefully with its variations and pre-capitalist mode reflected in the varied division of labour, the emergence of full-fledged capitalism is a far cry.
In alternative thinking, it may be a case of a dual economy where one segment belongs to the top 10.0 per cent and the other to the bottom 90.0 per cent. Each of these segments is heterogeneous. For example, self-employment of a lawyer, architect or chartered accountant is sharply different from self-employment of a street vendor. And billionaires are sharply different from the educated-enlightened middle section. A single, not-a-bad-term ‘profit’ seems unable to capture all these categories.
Picture design by Anumita Roy
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