The Bourgeois Virtues: Ethics for an Age of Commerce

486 chapter 46those who would have no wheat in a famine at all if the capitalist granaryhad not stored it “in huge quantities.”Nonetheless he cannot let go of the notion that it is “this urge to acquiremore and more which brings so many poor people to penury.” The notion,though mistaken, has as I say become fixed Catholic doctrine by now,expressed in numerous papal encyclicals and bishops’ letters. It is part of theleftist dogma that “Western prosperity depends, directly or indirectly, onThird World poverty, which the West in some cases merely takes advantageof and in others actually causes.” The pursuit of wealth is claimed to makepeople poor.To which economics replies: no, it makes the poor less poor. If youunderstand “wealth” correctly you understand that to “pursue” it is to buildroads or to make more shoes or to notice that wheat wasted in a year ofabundance can be moved to a year of dearth, benefiting all. The wheat isallocated better across time as a result of the speculator’s enterprise. And thepursuit of profit, I repeat, produces more wheat in the first place. The largerriches for the businessman, his “quasi rent” earned before competitors learnfrom his alertness, results in more, not less, wealth for his customers andemployees.The supposedly apeiros, unlimited, profit that makes the system produceso much more is in fact surprisingly small. Most people who have notlooked into the matter greatly overestimate how much profit is earnedunder capitalism. Profit margins in American department stores areapproximately 3 or 4 percent of sales. Wal-Mart, which is a tough bargainerwith manufacturers for the benefit of the American consumer, has earned amere 4 percent on sales for decades. Profit margins in American grocerystores are approximately. ...but wait, let’s see if you really do understandAmerican capitalism. Go ahead, take a guess right now at the profit marginon groceries, the cents per dollar of your expenditure at the store going tothe owners of the store. What d’you think? No peeking. Ten cents on thedollar? Twenty percent? Thirty?A different concept, all profit as a share of all incomes in the UnitedStates, is about 14 percent. Social accounting can show that such a figurewould imply a much lower one at the industry-by-industry level, at whichthe margin is on all costs, including services and materials purchased fromother companies, not just on labor and machinery and buildings and landused directly, “value added,” as the economists put it. The profit would be