It's a defined term in economics. Normal profit is when enough profit is made to pay the workers and managers a reasonable wage and for the company to remain in the market. Average Revenue = Average Total Cost.

super-normal profit is when Average Revenue > Average Total Cost and economic theory says this should only ever occur temporarily as it means there will be incentive for others to enter this market as it is clearly very profitable.

It is therefore very easy to tell which and how many businesses are making super-normal profits.

The interesting question is how they are doing this.

That is because Economic theory also assumes the super-normal profit is being made while still paying the workers and managers a reasonable wage.

So if we end up with firms making super-normal profits while not paying the workers and managers a reasonable wage i.e. ending up with Average Revenue > Average Total Cost by exploiting the workforce or relying on in work benefits as a subsidy, then any such firm is making super-normal profits is not doing so because they have cornered the market but are doing so at their workers and the taxpayers expense.



The fact John Lewis and Richer Sounds are more successful than many of of their competitors gives lie to what you say above. They value their staff and for example John Lewis are for more successful than M&S who under successive chairmen have abandoned treating their staff as they once did (in a similar way to John Lewis).



I have no idea what the implications of that would be and neither I suspect do you. Nor do I understand why you mentioned it.

I agree in the USA especially in the Clinton era there was government support for extending the American dream downwards to those on lower incomes by making them have access to credit.

But in the UK the problem was the politicians didn't meddle with it. There was no policy of encouraging subprime lending from the Blair government and if you think there was how about find some policy measures and/or government statements in favour of extending credit to those on the lowest incomes....?

So?


Clearly not, because you are paying it. You are even using more power to argue with me here.


You're effectively arguing against private hire taxi drivers here. They rely on state infrastructure. Do you propose taxis should be provided by the state?


Not happy with hard working taxi drivers then?



You're arguing against a lawless and unregulated free market. Thing is, nobody is arguing for that.
Which particular market do you think you serve?
Which book should I read about North Korea? Was it written by a private enterprise, or a state?

If you value it as too expensive for you then that only applies to you, not anybody else. What alternative do you want?

They may well value their staff, but saying they're more successful because Mr Richer lets them have a go in his Rolls Royce every now and then is fanciful.

So, just what the staff at these 2 companies get? Salary? Pension? Bonuses? Private Medical Care? Shares? Holidays etc etc

For comparison, The M&S company pension scheme has 3% employee 6% Employer Contributions for new starters, after 2 years this goes up to 6% and 12%. Which isn't bad.

The point being that John Lewis and Richer Sounds are highly successful businesses, which is a very nice illustration of how you do not have to shaft your workforce to be successful and highly profitable.

I'm not personally familiar with Richer Sounds, but I am with John Lewis, and a key reason I go there when I need, say, anything for the flat is because the standard of service is so much better than most other places. And that also means a standard of service that includes honesty and not just an intention of flogging you something come what may. Thus they get my return custom – and my recommendation to other people.

In other words, treat people well and value them and give them a stake in the success of the business and you improve the business because you improve the standard of work.

The fortunes of M&S, on the other hand, are declining.

That is the same for anything though isn’t it?

Either a market that actually works, which in this instance likely to be impossible, so failing that a nationalised industry able to supply a necessary utility at an affordable price.

I;ve already explained that to you.

Under free market economic theory that would be the case. But those companies aren’t operating in a free market. They are operating in a highly regulated, massively subsidised one using what was nationalised infrastructure where there isn’t a realistic alternative. Your premise here is wrong.

In what way are taxi drivers subsidised by the state? They do use state infrastructure, they do pay towards that infrastructure, they are also highly regulated and often their prices are set at a reasonable level by the local council. I am perfectly comfortable with that.

To borrow a tactic from yourself? Why differentiate? Why only hard working ones? Why not lazy ones? Whats the difference?

Nobody is arguing for that, I accept that. You are however justifying excess using that economic theory. You are using the free market theory, where the capital will find the best product, where people will pay a products worth and that is how it finds its value, and that risk takers and wealth creators should be rewarded for the risk they take and the wealth they create and applying to markets which aren’t free markets, where the wealth created is subsidised by the state and the risks taken are mitigated by the state. You cannot apply free market theory and justifications to a managed and subsidised market
myself? Media.
Any. In fact all. dont limit yourself to one.

No you haven't


Why is it wrong?


Is our road network, traffic police, not provided by the state then? I guess we should shift food distribution from the likes of Asda and Tesco to the state too.


Just take out the "hard working" then


Why not? Remember, it's freer market, not free market in your measurements.


Interesting.....so how do you think the media market exists to make you serve it, and how should it change to serve you instead?


I should read all the books about North Korea? BRB in a mo then.

The likes of JLP certainly have their place. Whilst they might be the preferred retailer for the likes of you (and we got most of our furniture there) there is also a place in the world for "no-frills low cost" retailer who doesn't give good service but is cheap. Some of those will be succesful, and some won't, just like those at the premium end of the market.