A crucial understanding of the nature of corporate profitability is that it is a zero-sum game. Profits enjoyed by corporations must be financed by one of three macroeconomic entities dissaving: households, governments, or foreigners. Alternatively, profits can be generated by businesses choosing to reinvest in aggregate. This understanding allows

It offers further understanding of virtually every important macroeconomic issue—deficit spending, business cycles, trade imbalances, etc. It exposes misconceptions about the relationship between saving and investment and between wages and profits. It