Profit and loss is the heart of business and economic change. Entrepreneurs drive the market at every level, predicting future wants and taking risks with their property. Earning profits is never guaranteed. Bankruptcy puts resources to better use under new management. Bailing out failing businesses creates moral hazards that rewards bad behaviors and prevents the market from experiencing the beneficial effects of business losses.
Recorded at the Mises Institute on Friday, 19 November 2010. Sponsored by Anastasia Thiele.