Partner Article

Is the profit motive profitable?

Whatever happened to bankers? Back in the sitcoms of my youth if the writers ever wanted a career for a stolid, upstanding but dull character, they make them a bank manager – think Captain Mainwaring in Dad’s Army. That was the image – stuffy, risk-averse and avuncular – self-appointed pillars of society. So how did we end up with a bunch of testosterone-fired spivs lending ever more money they didn’t have to people who couldn’t afford to pay them back?

The answer is the one-eyed adoption of the profit motive as promoted by the Chicago School of Economics. This holds that business should blindly pursue profit at the expense of all else. Yet, paradoxically, business after business crumbles as the fanatical pursuit of profit cuts into their profits – as the banking crash illustrated so dramatically.

It is often said that the concept of sustainable development has three pillars – society, environment and economy. I say let’s ditch the abstract middleman and think of every business sitting directly on top of those same three pillars. Every business needs a healthy environment to provide raw materials, clean water, energy and vital services like a stable climate. Every business needs society with its essential legal frameworks, education sector and other important public services. Every business needs a healthy economy of suppliers, customers and investors.

Why would we want to erode these three pillars? It would be like digging out the foundations of your own house to create more room - and then being surprised when the whole thing collapses around your ears.

Instead we should be recognising them, nurturing them and investing in them – such as protecting the environment, paying fair taxes and supporting suppliers. Like a gardener adding compost to the soil, this creates a fertile system within which the business can flourish. You could call it doing business in the real world.

Ditching the profit motive might be the most profitable thing you ever do.

This was posted in Bdaily's Members' News section by Gareth Kane .