Do Socialist Countries Have a Fixed Profit?

Because they have no way of knowing how to determine what the profit should be and why.

For example, the socialists reasoned, since profit is just an arbitrary rip-off, an amount added on to costs, therefore we'll decree that profit shall be, say 10 percent added on to costs. So then what the managers of communist factories did, was inflate the costs of everything. So the more costs you ran up, the more wasteful you were, the more profit you made.

And so on. Everything they tried, to approximate profits, kept failing.

The reason is, because their theory is wrong - obviously.

The reason is because profit, in its very nature, is not just an arbitrary quantity added on to costs, and it's not an expropriation of surplus labour value, as the socialists wrongly theorised.

Profit comes from the decisions of the *masses of consumers* in their decision whether to buy or not buy. And it comes from the difference between the value of the factors of production that went into producing a final product, and the value of the final product.

These quantities can only be known in terms of money prices i.e. markets for capital. But the whole purpose of socialism is to forcibly abolish the market for capital. This means that socialist economics and socialist governments are COMPLETELY INCAPABLE of working out any rational basis for profit, EVEN IN THEORY, let alone in practice.

In reality, profit is never "fixed". It is always a response to unexpected changes in circumstances.

Because market transactions are voluntary, this means that, no matter how great the profit, the value that the masses got from the entrepreneur, was *always and necessarily* greater than the profit.

In other words, the exploitation theory of profit is flatly incorrect. Profit and loss are the processes by which everyone who participates benefits. That's why the workers in the capitalist countries got much better pay, better working conditions, safer workplaces, and better environments, than the masses in the socialist countries. Socialism is wrong, simple as that.

"Also, do communist countries pay little or no tax?"

In a communist country, all the means of production are owned by the state. This means that everything that the workers do, is owned by the state.

The idea that you own the fruits of your labour, and then the state takes some, is a capitalist idea. The communist idea is that the state owns the fruits of your labour, and then gives you whatever it wants. Socialism is nothing but legalised slavery.

To really understand what you're asking about, Google and read the very good clear article "Profit and Loss" by Ludwig von Mises.

There's only about 4 communist countries left in the world.