Profits serve a function; they’re not dispensable costs. How are capitalists supposed to know what to produce to satisfy consumers, or what resources to use? How would they be incentivized to delay their own gratification to take a risk and invest in production? If we can save money by doing away with profits, can we also save money by doing away with wages paid to laborers? Can you give me an example of an economy that succeeded without profits?
Discussion
I’m not arguing against profits at all. I am stating that the cost of a public service as provided by government is (labor + admin + materials). The cost of a public service as contracted out to a government contractor is (labor + admin + materials + profit). Contractors wish us to ignore the added cost to public services
The most common reason government agencies contract out work to private firms is to reduce costs.
The most common reason is not to reduce cost, it is to satiate the desires of the electorate. And the electorate are not members of the public; they are controlling members of corporations that sponsor elections and put people in office…for the sole purpose of winning those contracts