Written by Bob Mills it revealed an inexcusable ignorance of the nature of profits, market processes and factor pricing, finally arguing that capitalism was now trying to shift the risks of doing business on to employees in particular and society in general. His first error was to assume that profits are a reward for risk-taking. This is incredibly naive. To fully understand what profits really are it is best to forget, for the sake of the explanation, the economic complications of the real world that hide so much from us. The normal rate of return to a firm, the rate that is equalised throughout the economy, is in fact the rate of interest as determined by the social rate of time preference.
Profit emerges when the demand for a product exceeds supply.
This can occur because demand has shifted, a new product has been introduced, cost reducing techniques have been developed, technology has improved, entrepreneurs have spotted a gap in the market, etc. The profit signals that the product is overpriced in relation to its costs and that factors are underpriced in relation to the value of their services. By driving down the price of the product by expanding supply and by raising factor prices by bidding them away from other lines of production, entrepreneurs compete away the profits. Yet one would learn none of this from Mills' article. He claims the search for profits is endangered by the corporate fashion for security.