attempts are not successful and so they become discredited;
they do not work because inherently they cannot last, and inability to
endure is fatal to the purposes of any economic undertaking. We are
emphasizing the fact that business is necessarily conducted for the
long run, the very nature of success implying permanence. A man may
take some criminal advantage of an opportunity: he may abscond with
money entrusted to him; he may abuse the confidence reposed in him by
an employer, by a customer; he may obtain an immediate profit by
misrepresentation. But no one could expect such things to last; he
could not possibly be building an enduring structure; such a course
could not in the end promise him profits, or any other kind of
success. A properly conducted business enterprise then is concerned
with making profits in the long run; that is to say, in accordance
with accepted notions of business conduct; in short, according to
rules of the game, and this involves conformity with a standard, a
standard of giving good value for what one gets.

We must next distinguish between gross profits and net profits. The
merchant or manufacturer naturally desires to do a large business, he
points with pride to the increase in his sales this year over last
year. The larger his turnover the smaller the proportionate amount of
his overhead expenses that must be borne per unit of product, and
other economies follow large-scale production or distribution. He may
occasionally be desirous of increasing his output even when it entails
a disproportionate increase in his expenditures, with the idea that he
can later occupy himself with reducing these expenses and in the
meanwhile the goodwill of his enterprise will have gained from the
larger circle of customers. Such is the case with a new enterprise
that often starts out with the expectation of little or no profits
during its early years, when it is gathering a clientele and learning
to distribute its product with economy. All these, however, are
special cases. The normal situation is that the business enterprise is
aiming at net profits, having an interest in large sales, heavy
transactions and gross profits only so far as these are expected to
lead finally to net profits, the real goal. Now these net profits are,
of course, the remainder of earnings left on hand after providing for
all costs and expenses, for depreciation and every other factor
causing loss, destruction, and deterioration du