Greed is not good, Profit is not Evil!

Do good, making a profit

The eighties orgy of "greed is good" has turned large swathes of the current entrepreneurial entire generation, globally, against what it perceives as the evil and injustice of turning a profit. We increasingly encounter younger founders who see the principle goal of business as "doing good", rather than making a profit. Are these two aspects really mutually incompatible? Should the world loose many transformational ideas because their founders do not understand what profit implies? I do not believe that these two things are in anyway mutually incompatible. Here are a few thoughts, I'd be interested in your feedback.

Show me the money

I do understand it when some ask "How can profit be good"? It smacks of corporate greed. It reeks of a system of limitless expansion consuming the world's resources until nothing is left. What could be wrong with "doing good" in a socially responsible fashion, using state subsidies or promoting the sharing economy?

Control

As it has often been said - "the road to hell is paved with good intentions". Lets talk about what it means to "show me the money". Lets talk about profit in a capitalist system. First, lets talk about control. How are you allowed to earn your money? How much are you allowed to earn? What may you spend it on? These are not frivolous questions. For the majority of human history small elites have dictated what you may or may not do. What may or may not be produced. What it must cost. Who may buy it. Whether these groups are guilds, theocrats, kings, monopolists, state planers or creepy social marketing experts - the complexity of what is possible is damped down and suppressed under the interests of what is good for those doing the dictating.

Capitalism, in the sense of Adam Smith, is and was an anarchist revolution of incredible scope and potency. Individuals could suddenly decide what *they* wanted to do, what *they* wanted to produce, what *they* wanted to buy and for *how much*. One specialism which has emerged (among many others) is the startup scene as a structure dedicated to discovering new needs and desires which emerge as society changes, addressing new and unrecognised wants and needs. If you can get there first, and do it right, your reward is profit. This has not (yet) led to the kind of socio-economic collapses which plague societies when economic dictators lose sight of reality completely. The risk which has been identified, however, is that as individuals consume ever more we as a society risk losing sight of how much we can take out of the earth's webs of life and it's chemical deposits before the foundation for our own existence collapses. This leads us on to the relationship between profit and growth. Does profit inherently mean environmentally destructive growth?

Growth

Lets imagine profit does inevitably lead to growth. What kind of growth? Growth does not have to mean an unlimited growth in resource usage. Growth is a relative concept. Growth can, and *is*, relative to market share. This means, growth can be achieved, for example, by small new businesses consuming larger older businesses. They can do this by using less resources in the manufacturing process, by using those resources more intelligently. They can do this as the political system insists on an economy where old products become the only source of raw materials for new products (a long term goal within the EU, for example).

As Entrepreneurs, we are here to identify new needs, killing old products, services and processes, replacing them with better products, services and processes.

What are you going to do with your profit?

Generating a profit is *not* inherently evil. As an entrepreneur, what are *you* going to do with your profit? Are you going to use it to generate still better products and services? Are you going to blow it all on hedonistic adventures? Are you going to redistribute it among your workers? Are you going to spend it on increased defensive or offensive anti-competitive measures in the market place? Are you just going to horde it and try to make more and more? Your call!

Profit intrinsically means you're doing something right - you are literally "adding that much value" to somebody's life. It is a signal that you have found something which matters to people, into which they are prepared to invest their energy in the form of money.

What you choose to do with it is up to you. If you want to use it for *your* personal idea of "good" - in this system you are able to do so. Be thankful that as a "little person" you *are* able to generate a profit, and that it is not just in the hands of the kings, the bureaucrats, the theocrats and the guilds to do so - as it was for so many Millenia. As entrepreneurs, we ought to be aware of the constant pressures towards corrupting centralised control, and be doing everything we can to hold the opportunities to profit open for all people and ideas - that means quite the opposite of disposing of profit. It means making *more* profit, and being politically aware enough to fight for the rights of others to do so.

© 2014 - Sefol UG (Haftungsbeschraenkt)