Beware the Green/Labor 'super profits' tax – it could be coming to ruin an economy near you

But that there will be higher prices at some time is factored into the decision to invest in mining, just as is the fact that there will be times when mines will be unprofitable.

The belief that over time prices for the underlying commodity will be at a level that will justify investment is what keeps people investing.

Mining is also an inherently risky proposition, not unlike starting new media companies, in that many more fail than succeed.

Some of the capital in mining is supplied by people who are more speculative and who invest at times when they think the price is low, hoping to be rewarded when it is higher. While speculators are often criticised, they are a valuable part of the market.

Sometimes people just need to sell an asset. Without speculators the market would be much thinner, and those necessary sales, particularly in industries like mining when prices are at a low point, would be much more difficult, or impossible, to achieve.

High profits are also a reward for people who are better at their job. Ironically, the same politicians who are likely to complain that companies make too much money are the ones who will criticise superannuation funds for making too low a return on investors’ funds.

How do superannuation funds make returns on investors’ funds? By investing in the most profitable companies. The stock market is full of companies that outperform other companies in their own industry by significant margins, and industries that outperform other industries.

Superfunds try and invest in those companies and industries. The fact that some superfunds do better than others is a sign that it isn’t so easy to predict which companies or industries are going to outperform.

Super profits and high profits also contribute to a higher economy-wide performance.

Not everyone is as good at making money as everyone else.

What higher profits do is deliver more assets into the hands of those who are best at making money so they can do more of what they are good at with our collective assets.

That is why free market economies are better at making wealth, and distributing it, than command and control economies, like the ones the Greens’ and Labor policies favour.