---
entity_slug: extraordinary_profits_analysis
evaluator: null
evaluated_at: '2026-02-23T05:26:37.868430'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes extraordinary profits from normal
    competitive profits and identifies specific causes (monopolies, bounties, market
    distortions). It avoids circularity and captures a distinct economic concept with
    measurable characteristics.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is thoroughly grounded in Smith's actual analysis, particularly
    his extensive discussion of monopoly profits and market distortions in Book IV.
    Smith explicitly argues that profits above the natural rate indicate inefficient
    resource allocation and reduced economic welfare.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: The "Exchange" domain is perfectly appropriate since extraordinary profits
    arise from distortions in market exchange mechanisms. This concept directly relates
    to how prices and profits deviate from their natural levels in competitive markets.
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: This entity has moderate VSM relevance, primarily mapping to S3 (internal
    regulation) as it represents a diagnostic tool for identifying system inefficiencies.
    It could also relate to S4 (intelligence) as information about market health,
    but the mapping is not as natural as more operational concepts.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides strong explanatory value by identifying a key mechanism
    through which market distortions manifest and can be detected. It illuminates
    the structural relationship between competition, resource allocation, and economic
    efficiency rather than merely naming a surface phenomenon.
---

# Evaluation: Extraordinary Profits Analysis

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes extraordinary profits from normal competitive profits and identifies specific causes (monopolies, bounties, market distortions). It avoids circularity and captures a distinct economic concept with measurable characteristics.

## source_grounding — 5.0 / 5.0

This concept is thoroughly grounded in Smith's actual analysis, particularly his extensive discussion of monopoly profits and market distortions in Book IV. Smith explicitly argues that profits above the natural rate indicate inefficient resource allocation and reduced economic welfare.

## domain_placement — 5.0 / 5.0

The "Exchange" domain is perfectly appropriate since extraordinary profits arise from distortions in market exchange mechanisms. This concept directly relates to how prices and profits deviate from their natural levels in competitive markets.

## vsm_relevance — 3.0 / 5.0

This entity has moderate VSM relevance, primarily mapping to S3 (internal regulation) as it represents a diagnostic tool for identifying system inefficiencies. It could also relate to S4 (intelligence) as information about market health, but the mapping is not as natural as more operational concepts.

## explanatory_value — 4.0 / 5.0

The entity provides strong explanatory value by identifying a key mechanism through which market distortions manifest and can be detected. It illuminates the structural relationship between competition, resource allocation, and economic efficiency rather than merely naming a surface phenomenon.
