every damn widget produced, be at 0.01% production capacity or 100% capacity, is a profit earner once sold.
No, it's a revenue earner once sold. It's extremely unlikely that a factory at 0.01% production capacity can ever produce a profit -- and if it can, it means that demand so outstips supply that it is probably critical to society that we get that factory up to near 100%.
You can never realistically operate a business without this understanding, not under any economic system.
Idle workers are not wasted (unless they happens to still get paid).
So wait, you want people to be employed variably? Nobody is going to sign up to be an employee at a random 0.01% of the time. Yes, there are fields of variable employment, but they are limited.
Idle production equipment is not wasted
It absolutely is. What do you think "wasted" means?
Even aside from inefficient use of resources, it costs money to hold the land for the factory (and land costs aren't artificial costs -- you get to use the land because *nobody else does*), and basically everything needs maintenance eventually or it will fall apart. Security to prevent people from stealing all your shit (although in this case, the economy would probably be better off if somebody stole it from a 0.01% production factory and used it in a 10% production factory, making 1000x as many widgets).
Sure, there is a "loss" of potential profits if the market is screaming for the widgets the factory is providing.
I don't know why loss is in quotes here. Again, it's not just the owner's money that's wasted. All the resources invested into producing widgets are being used inefficiently.
That right there is economist talk, and do not hold up to a reality check what so ever.
There's lots of things we can say about the "dismal science" that I'd agree with, but this is not just economist talk, and things are not wrong simply because economists say this. It's accountant talk, business administration talk, and reality talk.