| How The Capitalist Maximises His Income |
| The income a capitalist gets from his enterprise is made up of the profit he makes on everything produced and sold by his enterprise. |
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The profit on each item is the price for which he can sell it, less what it costs him to produce it. The daily income from his enterprise is therefore this (his unit profit), times the total number of items per day which his enterprise produces and sells.
To maximise his daily income, he must force his unit price as high as possible, his unit cost as low as possible and his rate of production (the number of units per day he produces and sells) as high as possible.
His rate of production (units per day) is set by the rate at which he can induce people to buy what he is selling. This depends on how well he can market his product, and also on what proportion of all the people in the marketplace still have not bought his product. However, having lots of capital, he is able buy the mass-media advertising power to persuade people to buy whatever - and as much as - he wants them to buy.
The unit price a capitalist can demand for his product depends on how hungry for his product the market is at the moment. The market is at its most hungry for a product roughly when half the people who are ever likely to buy one have not yet done so. That is, when the population of his product within society at large is about half of what it will be when everybody who is going to buy one has done so. This is also the point at which its potential rate of consumption - and consequently its rate of production - are at a maximum. So the criterion for maximum price is the same as that for maximum production. By driving up consumption, he will therefore automatically be able to drive up the price also.
However, it is not the actual population of the product within its market which is of interest to the capitalist. It is the rate at which the product's population is increasing within its market which matters, ie: its rate of growth. This is synonymous with the rate at which the product is being sold. And it is this which determines his daily income. So to maximise his income he must maintain as high a demand as possible. He does this through a variety of techniques. These include:
The constant high price and constant high rate of production thus achieved compound together to yield a constant super-high rate of income for the capitalist. But the social and economic consequences of the capitalist's super-high rate of income is that the market is kept in a constant state of turmoil. Products are short-lived, non-repairable, narrow in choice, inadequately made, and constantly changing in design, technology and fashion.