Nobel Laureates Paul A. Samuelson, MIT professor of Economics, and Kenneth J. Arrow, professor of Economics, yesterday delivered the first two of the 1976 John Diebold Lectures on New Challenges to the Role of Profit.
Samuelson spoke on the meaning profit held for economists from Adam Smith to Karl Marx.
"Profit is today a fighting word," he said, adding that, "profits are the lifeblood of the economic system," and the "magic elixir" on which economic progress depends.
Arrow spoke on "Why Profits Are Challenged." "The strongest argument for profits has always been they are needed as an incentive," Arrow said. He added that "profits may not be the motive of the economic system today," as management is not in the hands of profit recipients.
He cited the Tennessee Valley Authority and the Manhattan Project as "apparently efficient enterprises" not run for profit.
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