Investors Take Risks, Are Not Entitled to Profit
Regarding “Developers Again Aim at Pebble Beach,†Golden State, March 20:
You say that nobody disputes the developers’ rights to a fair profit. Well, I do.
Although I am not knowledgeable about the specifics of this particular deal and its environmental effects, I want to point out that a basic tenet of capitalism is that the investor accepts the risks of a deal. There is no right to a profit.
The owner has rights and limits in accord with the law, whatever that may be. This is particularly pertinent when the owners purchased the land fully aware (or they should have been aware) that environmental considerations could limit development.
The price they paid was determined by a market that reflected those risks and limits. Investors are not entitled to a profit under our system of capitalism.
Dave Dichner
Los Angeles
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