Hello Arshad,

Actually that isn't true. In the prior scenario more of the benefits flow to the customer base. In the latter scenario it flows to the business at its revenue line, then to the company's suppliers at the cost of goods sold line (and then to the supplier's stakeholders), then to its employees in the SG&A line, then to debt holders, then to citizens via taxes paid, and on to other stakeholders.

Capitalist transactions that do not contribute to productivity are all of this nature: who gets paid? The way to measure that productivity is to ask if each party's return exceeds their all inclusive costs of capital.

Also, so long as both parties to any exchange have the ability to decline the transaction, then you have to assume they are comfortable with both the benefits and the costs.

Thanks for your comments!

Jason