Macroeconomic Classification of Profits

Abstract

Prior to the 20th century, countries fought armed warfare equipped with a variety of weapons entailing loss of trained and untrained men and destruction of materials whereas in the 20th century, countries are waging economic warfare armed with a variety of economic weapons such as money, business power, market power, etc. avoiding the loss of trained and untrained men and destruction of materials. Whether it is conventional armed conflict or modern economic warfare, the purpose has always been acquisition of wealth or profit. Macroeconomic literature has largely measured the national wealth produced in a year or the progress or welfare with gross domestic product or national income but largely ignored the characteristics of wealth and profits from the macroeconomic dimension. Profits have received some attention from the microeconomic dimension, though. This paper attempts to present the characteristics of profits from the macroeconomic dimension and proposed a macroeconomic classification of profits with a few interesting implications based on Arthasastra, the science of wealth, an Indian contribution long before the recognition of Economics as a subject of study of importance!