Profit Motive vs People
Many economic theories are based on the assumption that businesses exist to maximize profits. Neoclassical economists (mainstream) use the profit motive as an axiom to build economic models. Making money is seen as the single purpose for all business.
Let's assume that businesses exist to make money (profit motive). Let's also assume that businesses need people to work for them. Who are these people? and why do they need a job? There could be a wide rage of reasons why people seek work. Some people love work. That's wonderful! Others just need to pay their bills. That's fine. Other's have no choice but work, and they may even really hate their job. "I hate my job", is a very common phrase. Others believe they are being exploited (cheap labor, social pressures, no unions, etc..)
Do businesses care that some employees hate their job? Perhaps. Perhaps not because caring about your workers may cut into their profits, a big no-no. Society has allowed a bunch of systems to exist, called "businesses", who may not even care about the employees they hire. Many workers are treated like dirt. It all seems so cruel and unfair.
What do you think?
Let's assume that businesses exist to make money (profit motive). Let's also assume that businesses need people to work for them. Who are these people? and why do they need a job? There could be a wide rage of reasons why people seek work. Some people love work. That's wonderful! Others just need to pay their bills. That's fine. Other's have no choice but work, and they may even really hate their job. "I hate my job", is a very common phrase. Others believe they are being exploited (cheap labor, social pressures, no unions, etc..)
Do businesses care that some employees hate their job? Perhaps. Perhaps not because caring about your workers may cut into their profits, a big no-no. Society has allowed a bunch of systems to exist, called "businesses", who may not even care about the employees they hire. Many workers are treated like dirt. It all seems so cruel and unfair.
What do you think?
Comments (37)
Interesting question!
I was focusing more on businesses and how they relate to 'people'. But your raise an interesting point about our biological needs and resources. We do have limited resources, and dividing it 'fairly' among people is neither feasible nor desirable.
Well unless we're referring to some science fiction artificial intelligence.. business by definition is an endeavor by people. So how does it not relate to people becomes the question. Free market. If you're not relevant, you don't bring in new customers. It's pretty simple really.
I think the point of the OP is that our current society despite libertarian appearances entails more of the latter than the former. The argument for capitalism is that everyone has the possibility to "make it"- but in many cases the hierarchies of economics are so far apart from bottom to top that the bottom will feel like slaves to this system. There are people that lack some of the most basic needs in life while others have abundance to sustain thousand of lifes all for themselves.
Quoting Wheatley
Money has completely distorted the value of things. As I grew up, I found it stranger and stranger that people are spending all their life chasing money instead of trying to use money to not need money anymore. Work is necessary, but strictly speaking I merely need food, water and shelter - once I have the basics down, I can basically do what I want.
But instead of relying on nature directly (for instance, by tending to a garden and growing our own food), most of us take a detour through the medium of money.
I don't think the system is right. It made sense to some degree. A currency that represents the value of goods makes perfect sense. But in our day and age, the currency IS the value. This is backwards.
On the note of resources and such: While population is growing, production needs to grow as well. In this regard, the growth of businesses and companies is perfectly sensible as well. However, again the issue is that the representation (money) has become detached from the thing itself. Hence businesses aim to maximize profit rather than their use for society.
I think businesses are always looking to maximise profit and cut costs and will ususally do whatever the legal system, the government and conditions allow them to get away with. Happiness of staff only starts to matter when you go further up the hierarchy.
Exactly! You end up with tons of miserable people at entry level jobs.
Can't take it with you. Lost are those who call circumstance reality. Contrary to popular belief, you actually can make a horse drink. Though it usually drowns.
But they are not people.
Not sure what you're trying to express or what the point of the horse anecdote is.
'Work' was always about humans. The first 'computer' was a job role for a human. Economics being essentially about resources and distribution shows up something interesting in regards to work and production. A work horse needs to be tended to as does a human. Petrol doesn't and nor does a machine. This leads to the ethical problem of there being no ethical problem.
Fuel will not go on strike or die of exhaustion. The fewer humans required for a workplace means that there is certainly more room for a 'profit only' concern - not that I think this is the be all and end all of all business ventures!
Human wants and needs drives the economy more than businesses. I am not denying there is a feedback though. If the concern is there is too much concern with profit then I believe we need to look towards forces that can change cultural habits in regards to consumerism and/or changing how humans live their lives in general.
Quoting Wheatley
I think there is a combination of things in at work in here. Some are willfully blind to their workers (and/or so disconnected from them). Others care about how productive they are and so wish to have happy workers that do better work BUT this is only a serious factor for rare/skilled labour. If there are only a handful of people able to do X or Y then they will be treated better or move to another business or set up their own.
For non-skilled labour there is a problem. With an almost endless supply of people to fill positions z and x there value of their labour is decreased and so concerns for the workers welfare will not really impact profits at all - in fact it will likely increase them if businesses act together to decrease wages. Or act in opposition to each other by undercutting labour costs to increase profits by way of cheap production. This double-edged sword is certainly an issue that governing bodies have a headache with not being able to find a constant balanced between these two problems.
Neither are these sentences, yet we know they're personal. Created by and for persons. Your point (what I assume to be at least) is not lost on me, I understand the "less than personal" environment that successful businesses tend to operate from (simply because the next guy who maybe spends a little less time being all buddy buddy with every single person who steps foot in the door and more time selling product and maximizing efficiency may make it in the black while the other guy remains in the red) the fact remains unless you're selling a product or service to a robot and/or employing them, it is in fact all about the people at the end of the day. Whether or not you "dehumanize" them as some would say to a paper sheet of demographics and numbers or not.
Free market capitalism works. Other systems, e.g. government controls, don't seem to. What do I mean when I say "capitalism works?" It creates a market that gets resources to the places they're needed in a more or less efficient manner. When I fly over New York City and northern New Jersey, I get a visceral feel for the vastly complicated network of pushes and pulls that create the civilization I'm flying over, for better or worse. Problem - often, usually? capitalism does what it does with no regard to it's employees, the surrounding communities, or the world at large. The involvement of large corporations can make things much worse. Solution - 1) govern regulation 2) labor unions and 3)...? I don't think the revolution of the proletariat, if it were possible, would be a very good candidate.
Democratic governments are created by and for the people. Yet we still talk about how the government (as an entity) treats its people. Business are like governments because they both act like an entity with goals different than individual people. Of course people contribute to these systems, but to call these entities "people" is a bit of a stretch.
I don't think so either. Sorry, Marx.
First, it's true that the profit motive is a very basic aspect of capitalism. But making a profit, and markets generally, have been around for a long time.
What's different about capitalism is the relationship between employer and employee. That's the dynamic that separates capitalism from feudalism, slavery, and economic/political systems. This is a point the economist Richard Wolff makes repeatedly, and which I'm echoing here. I think it make sense.
Second, you're quite right about the assumption that businesses (especially corporations) exist to make a profit. But this idea, surprisingly, is relatively new. It can be partly traced back to a famous 1970 article by Milton Friedman, titled A Friedman doctrine?- The Social Responsibility Of Business Is to Increase Its Profits.
This idea spread throughout the universities and business schools. Around the same time, you had the mobilization of the business community, partly in reaction to the 1960s movements and the writings of Ralph Nader. They felt under threat. The call to arms is the now-famous Powell Memorandum, written to the U.S. Chamber of Commerce, which outlines a number of actions that should be taken by businesses.
Currently, there is a big shift away from the Friedman Doctrine (also called "shareholder primacy") and towards "Stakeholder Capitalism," as stated in the Chamber of Commerce and Business Roundtable mission statements. You hear guys like Larry Fink of BlackRock and Mark Benioff of Salesforce talking this up a lot now.
So some of the ideology is beginning to shift. On the left, there's been a greater push towards New Deal-era policies, including the "regimented capitalism" which was predominant in the 50s and 60s. A large chunk of the Democratic establishment are still neoliberal. The right, however, are becoming even more corporatist and authoritarian -- what's often called more "libertarian." This is embodied in Mitch McConnell.
So no, it's not a fair system. But if we recognize what's going on, we can change it for the better. I think stronger unions is a fine start, but also voting for more progressive candidates like Bernie Sanders and AOC is helpful as well. The government should be working to regulate these industries, workers should be given the option to run the factories themselves, there should be workers on the board of directors, there should be a strong safety net put in place given that we're the wealthiest country on earth, taxes should be changed, etc.
Human nature cannot be escaped so easily, unfortunately, as your point reminds us of.
Quoting Wheatley
I think there's a Star Trek episode that covers this.. "the needs of the many" or some business like that.
Quoting Wheatley
Again, unless it's an automated and unmonitored system, people are wholly involved in every benefit, gain, inconvenience, and grievance, though we'd like to think otherwise. We as frail beings subject to the whims of nature and biology have to invent a boogeyman of sorts, someone - anyone - who's not the man in the mirror. And that's why he'll never be caught.
Point me to one country where they have free markets.
Quoting T Clark
Capitalism does not create markets. You can have markets in any system. You had markets in ancient Greece, you have markets in communist China. China is also highly efficient at getting resources to places they're needed. Is that capitalism?
Quoting T Clark
Returning to the policies of the 1950s and 60s would be a start -- much higher taxes on the wealthy, a much better regulated financial sector, and an ideology of corporate governance that prioritized employees, innovation, and infrastructure along with shareholder dividends (as opposed to the "shareholder primacy" doctrine of Milton Friedman). You look at where the profits started shifting during the 1980s: buybacks and dividends, shrinking all the other investments to employees and infrastructure, and leading to stagnant wages, destruction of unions, precarious jobs, less corporations overall and, ultimately, less growth.
You're right that capitalism is very efficient at distribution. It creates demands where there were none, so it's growth oriented.
Apathy about communities and employees is made possible by private property, but that kind of disregard requires a large mobile work force that can be exploited. That's not always available, as we're now seeing in the US.
I wonder how long the worker shortage will last. Probably not long enough to make a permanent difference. We need regulation and labor unions.
Both have been pretty thoroughly ground into the dust. We need a system reset.
Seems like there is some enthusiasm for putting the squeeze on some corporations. Those are mainly tech companies, which probably aren't the main problem. Unions seem to be waking up a bit too. May be a flash in the pan. We'll see.
They'll just exit the US like so many before them.
They have a lot of customers here and they need to be here to serve them. They won't be able to escape.
Take a closer look at where your consumables were manufactured. I think you'll find that most of it wasn't here, except maybe some of the food you eat, which was produced by disenfranchised migrants who couldn't possibly unionize.
Remember, the US economy revolves around Wall St., not manufacturing. This is called Neoliberalism.
I don't see how that contradicts my point.
Quoting frank
Yes. It strikes me that making the financial industry the heart of the economy has been disastrous. It highlights how things are distorted when pure profit is the motive.
Well, what did you mean by:
Quoting T Clark
What companies are you talking about?
You're talking about where the items being sold come from. I'm talking about where the customers are. Amazon can't get out of the reach of the US government as long as they're selling here. A lot of American companies get more trouble from the EU than they do here. Ditto with China.
Oh, Amazon. Yes.
Many economic models are also just that, model -- not as easy to put to work in reality. And yes, while profit is the goal of doing business -- you don't spend money and workforce just to have losses -- this has been simplified too much. Rational economic principles include ethical business practices. But just because there exist rational economic principles, it doesn't mean we are not going to have the problem of bad business owners.
Anyway, maximizing profit must take into account the working condition of the workers/employees since labor is one of the most costly expenditures of a business. It's like pulling a rope -- you pull too much on one end and it stresses the other end. You can't cut corners without consequences, and you ask yourself, are these consequences something I could live with or is it going to drive the business to the ground?
Does nature make a profit?
Quoting unenlightened
So you are bordering on my previous thread about the "forced game". There is no way around the need for survival, which requires some system of work and cooperation. We don't seem to survive easily Robinson Crusoe style (which is still its own single player game). Anyways, my point is that there is no way around an economic system which by its very nature causes strife and challenges. The problem has to be rewinded to an earlier point.. the point of birth itself. Simply DON'T put more players into the economic game with its inevitable "dealing with" aspect. Once born, we MUST deal with the game.
So this gives the larger context, is forcing people into a game wrong? Absolutely. The cost of not playing correctly (or at all) is death. You must "deal with" and "learn to like the game" or live other sub-optimal options. It is an injustice to put people into a situation of a forced game, even if that game is the whole of life itself. No one said because it's "life" it's default "good" to be put into the situation of life. That should not be assumed.
Quoting Outlander
There are other options of course- don't put people into the game in the first place. However, you are right in the sentiment that once born, there are no other options but to play SOME economic game. The game itself doesn't matter. The injustice of having to play ANY economic game is what I'm interested in. That is brought about from the condition of birth, which is my biggest concern as that is the first injustice. Everything else follows.
Perhaps someone who's not you doesn't view life and it's benefits, rewards, and yes as you obsess over it's negatives, drawbacks, and moments of torment as a 'game' but something greater? I'd wager many non-theists would agree with me and others as this fact being relevant enough to spur religion itself now, wouldn't you?
To create someone and have them go through challenges for no reason other than “views life as some grand thing” is still wrong. Not an excuse to make people deal with a lifetime of the overcoming challenges game just because YOU (the procreate) have some agenda you want to see enacted. Mind you I think this is wrong to create, even if someone reported “I like the game created for me to play”. I simply view the forced game as an injustice similar to the “happy slave” who is happy as a slave but is in an unjust position.
To operate a business and employ others one needs the profit to do so, but he must also cover the costs of his forced labor whenever the state comes around to take it. So of course the profit motive exists.