Philosophy concepts and applications

Profit Is the Purpose of Business - and This Can Often Lead Us Awry

Philosophers, especially western philosophers, have long debated the mysteries and goals and expectations of life, and this discussion inevitably settles on wealth, material satisfaction and its itinerant power. Even discussions of metaphysics and political-philosophy have their links to and bearings on the philosophy behind wealth maximization.

Although the resulting philosophies are completely different (think: Mill vs. Marx), one common thread links economic philosophies launched from the West: the fact that profit is the purpose of business. Even those philosophers who decry profit as a motivator acknowledge that profit looms large in our everyday calculations of what is wrong and what is right.

Most obviously, the basic tenets of capitalism rely on profits. We are motivated to act in our best interests, and this understanding is critical to a conceptualization of how mankind movies forward. Even if we act with others or for others, it is because it provides us with the best possible opportunity to better ourselves, and our own positions. Capitalists traditionally want as few controls on the economy as possible, allowing the free market to function on its own.

The problem with letting the free market and profits rule, however, is that - although economic theory dictates that his process is best in the long run - lives are finite, and people expire. So we place controls on the economy essentially to protect people who need protection from the pure profit motive in the short run. That is the essential difference between the Republican and Democratic perspectives in American political-economy.

John Stuart Mill asks us, in Utilitarianism, to do precisely what is most useful. That path of least resistance by which we reach our goals with the fewest obstacles is our correct path. Mill's work on profit defers from general capitalistic principles in that it does not deal directly with profit as a motivator. However, it too acknowledges that we act to maximize our utilities, which, of course, can be read easily as profit. Mill does not outright say that the profit motivator is the most important, but it is implied in his work.

Marx takes the furthest stand from praising the profit motive. He believed that people cannot be trusted to act in their own best interest, and are better governed by a state that usurps the profit motive thought process from the people. He understood the evils of the profit motivator in business, and sought to artificially remove it from the equation. However, he too understood that it is natural to seek profit as the motivation for business, as he acknowledged that the government must actually take steps to cleanse business of the profit motive.

At first glance, the profit motive seems inseparable from business. However, examining Mill and especially Marx, we understand that it is indeed possible to antiseptically remove profit as a motivator and purpose of business, but the question remains, what to replace it with?

Communism was not the answer. It removed profit as a motive, but was not able to substitute any other purpose to business, so business in ex-Communist states such as the Soviet Union failed miserably.

China and North Korea find themselves making concession after concession to keep their socialist business leanings, but even China, for instance, oversaw the recent merger between the IBM PC branch and one of its computer companies. Profit here was definitely the motivation. Perhaps removing the profit motive from business may work in the short-term on a domestic level, but with our highly layered international economy, it is downright impossible to remove profit as a purpose altogether.