On the Nature of Profit

Let us consider a class, or range, of conceptions formed by a decision-maker, of which policy indicates one extreme and act of investment the other. The conceptions we have in mind compose a class by virtue of more than one character they have in common. They are all of them schemes of action. All of them are things imagined or conceived, not yet, or not wholly, applied to practice and turned into past history. For each of them, therefore, success or failure does not yet exist and valuation is a matter of judgement and conjecture. Each is in some greater or less degree adapted to live in this environment of uncertainty by containing, and consisting in, a branching tree of alternative developments, and further than this, by having the power to put forth fresh branches of shapes yet unthought of and in numbers which are in principle unlistable. This power of adaptation is the character which enables these conceptions to be ordered from greatest to least variety, at each stage or named future date, of branching paths: policy offering the greatest variety, act of investment in some plant or system whose purpose, technology and design are fixed, the least such variety. Yet there must attach to any conception which is to fall in our class a self-identity, a recognisable permanence. For we are going to speak of events which can cause the abandonment, or radical change, of such a scheme of action, and that which has no identity and recognisability cannot be abandoned.