IT'S POWER, NOT PROFITABILITY by Peter Moss, Profit is not one concept, but two. It is accepted because few people understand that corporate profit is quite different from sole proprietorship profit. Everybody understands sole proprietorship profit: it is the difference between price and cost. When a papa-mama grocery sells a quart of milk for $1.89 and pays the dairy $1.59, the profit is 30 cents. Of course, there are some pennies for rent, electric and mortgage, but most of that 30 cents is wages for papa and mama who staff the store dawn to dusk, often 7 days a week. If they would not earn wages, they would go bankrupt and starve. Corporations also make a profit, but because of a dirty accounting trick, corporations are allowed to deduct all of their costs (raw materials, payroll, utilities, depreciation, taxes, etc.) before calculating their profit. Since payroll is already deducted, corporate profits are not wages but return on investment. The difference is not only quantitative where sole (papa-mama) ownerships earn thousands of dollars while corporations earn millions and billions, but qualitative: sole ownership profits are necessary wages while corporate profits are return on investment when times are good and companies are well managed. This is the most important single lesson I learned in three years of graduate school of business administration. The Internal Revenue Service understands this and taxes sole ownerships as individuals, while corporations pay a much lower tax and only on the small "profit" after all expenses. Unfortunately most voters never attend graduate school of business administration and do not understand the fundamental difference between corporate profit and papa-mama profit. As a result, most voters readily accept the necessity for profit and readily confuse sole ownerships profits and corporate profits. This explains why most people consider business, big and small, as a natural or even optimal format for economic activity. And then there is a whole additional level of voter incomprehension. Studies published on top executive behavior show that CEOs are far more interested in power than profit, and power depends on size, not profit. Even the FORTUNE 500 (and similar) lists of the largest corporations are in decreasing order of sales, not profit. The lame "reason" for this is that sales are relatively steady year-to-year while profits fluctuate more. But more importantly, CEOs are more keen on sales than on profits because the CEOs are power hungry and size is far more important in wielding [often corrupt] power than profitability. But why are corporate speakers and their publications always harping on profit, never on power? Because the voters (and the untutored business reporters) have no power and cannot relate to power but can relate to profit, especially the papa-mama kind. To claim that profit is a valid goal is a fraud built upon a fraud: blurring wages with corporate profit is the first fraud, and blurring hunger for power with hunger for profit is the second fraud. It is easy to show that power, not profit, motivates CEOs but it can't be done by interviewing CEOs who are not motivated to divulge the truth even when they know it. We have to refer to their documented actions. We have been indoctrinated to believe that corporate managements do everything for profit but that is just not true. They are more interested in "having their way" and nobody will tell corporate management what to do and what not to do. Pitiful, simple, childish obstinacy. Look at the General Motors notices of stockholder meetings for decades (I have been following them meticulously since 1964). Each year there are half a dozen or so stockholder proposals, but no matter how obviously desirable, they always carry a negative management recommendation and the proxies are cast to uphold the management position no matter how unprofitable, unjust, or just plain ridiculous the "management position" may be. GM's secret motto: Our way or No way. The problem with this ossified view is that corporate employees mistake corporate policy as divine command and when they have to interact with corporation victims in courts of law or other real life situations, they become babbling idiots. The situation is maintained by compartmentalization: management makes all the decisions, employees carry them out unthinkingly, and any problems that management and staff can't handle go to the law department where some devious but rarely smart lawyer does what he can to win the day or at least bury it in a confidential settlement while that legalized injustice lasts. To put corporate obstinacy and power hunger in perspective, consider the Iraq weapons of mass destruction flap. In a secret meeting between vice president Cheney and the CEOs of the fossil fuellers, it was agreed to "change the regime" because ExxonMobil, ChevronTexaco, ConocoPhillips and company want to tell Saddam how to price and schedule his oil. They have had it with Saddam telling the fossil fuellers. But of course, don't tell the voters it's blood for oil, they won't go for it. Scare the pants off the UN and mankind by saying that Saddam is "working on" weapons of mass destruction. But underneath it all, it's not mainly about blood for oil or even blood for oil profits. It's mainly about who will tell whom or else. The main danger is not even the loss of innocent lives but the danger that once Iraq's 128 billion barrel proven reserves are "liberated," they will be converted to global warming which will melt the polar ice caps and permanently flood New York, Miami, L.A., San Fran, Tokyo, Sydney, Melbourne, and all coastal megalopolises. We must stop global warming and fossil fuellers. And not to forget the tax accounting double standard. If elected, I will propose legislation so every individual will pay taxes only on income left after food, shelter, health care, commuting, clothing, and other necessities to live and generate taxable income. Why should non-corporate citizens be second class citizens? A better world is possible and it can be legislated if the people vote for it.