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10 Reasons to Reconsider Profit and Profit-making
Disadvantages of profit-making
1. While 85% of humanity are motivated by reward (15% are motivated by safety), profit is not the same thing as reward. Profit is the money left over after all expenses (including salaries and provision for future expenses) have been paid. A reward is defined as anything one gets in return for doing something beyond the call of duty. It can be a bicycle for good behaviour, a kiss for making an effort, a smile for making someone laugh, a bundle of money for information given which leads to an arrest, or a bonus for doing something extra on the job.
2. Profit is not the incentive that makes people work. Survival is. The only reason people work for money (which is not the same thing as profit) is because it is the only means of survival they know. If money wasn’t the currency of survival, then they wouldn’t work for money. Ninety five percent of the world’s population go to jobs which pay a wage or a salary, and salaries and wages are not the same thing as a profit. A salary is a monthly wage, irrespective of hours worked; wages are based on time worked, and profit is the money left over after all business expenses have been paid for the year.
3. Profit goes to shareholders and/or owners. While the owner may or may not work in the business s/he owns, shareholders seldom work. In fact, the more shares someone owns, and the more profitable those shares, the less need there is for shareholder to work. Most of the world’s very wealthy people do very little work. That’s why profit is important to them, otherwise they would have to go out and get a job.
4. A business can either make a profit, a loss, or be sustainable. If it makes a profit, it means that goods become a lot more expensive to produce. It if makes a loss, it means it cannot sustain itself. A business is able to sustain itself when it makes enough money to cover all its expenses, plus pay wages and salaries, and have over enough for future investment and emergencies. A business that does not have to make a profit but makes enough to sustain itself can produce and sell goods at a much cheaper price than businesses which insist on making a profit.
Lower wages and higher prices
5.The more successful a company becomes, and the more shareholders it has, the more there is a demand for greater and greater profit. There are many ways to ensure profit. Cut the wages and salaries of staff so that they earn increasingly less. Charge more and more for goods so goods become more and more expensive. Replace workers with robots. Move the production side of the business to a place where the rate of foreign exchange means that workers earn substantially less than in a first world country. As a result, goods become more expensive and workers earn less and less. Increasingly, therefore, over a period of time, greater and greater numbers of people become more and more poor. This is the reason that, internationally, the number of people in the middle class has decreased for the past thirty or forty years. Profit making enriches those at the top, but increasing impoverishes everybody beneath them.
6. Because profit-making is aimed at enriching the ownership class (about five percent of humanity), its goal is not to provide for the rest of humanity. At its core, an economy is a system of production and distribution. Capitalism is a system of production and distribution that permits a small number of people to be rewarded more than others if they own the system of production and distribution. This makes the system of production and distribution both inefficient and expensive. It means that goods which are vital to poor people are not produced because they are not profitable, and it means that goods that are vital to people in faraway places are not distributed there because they are not profitable.
Many companies put profits before people
Advertising is a form of soft brainwashing and commercial propaganda
7. Somewhere around the 60s or the 70s, more goods than were needed started to be produced. At that point, advertising went into overdrive! The consumer society was born. The purpose wasn’t to provide people with things they wanted or needed, but to keep business going. Advertising is a method of soft brainwashing and indoctrination invented by Edward Bernay at the end of the Great Depression in order to ensure that people always bought things even when they didn’t want them or didn’t need them. That’s because the biggest reason for the Great Depression was because most people didn’t want or need all the goods that were being produced. Business has become a vicious merry-go-round in which the only way to sustain it is to keep up a system of production and distribution which has become highly destructive to the earth. The over-production of goods has led to vast landfills with plastics and other earth-unfriendly substances leading to increased pollution and death to other species. The earth’s eco-system is being systematically destroyed as a result of the profit-motive in business. Production and distribution should be a means of providing for humanity as a whole, not a means for enriching some at the expense of others.
8. Profit is not the only motive to go into business. My late father only went into business because he couldn’t get himself out of bed before ten in the morning, and bosses weren’t keen on those type of hours. Sometimes people go into business because they can’t find a job, and they’re more than happy just to earn enough to live. My mother went into business because nobody would employ her so she didn’t have a choice.
The worst man gets to the top
9. Repeated studies have shown that those people who are driven to make enormous profits are sociopaths with no regard for the destruction they wrought in their efforts to make profit. Human lives or the eco-system of the earth mean less than nothing to them. Steve Jobs may be admired by many Apple lovers but those who worked with him and who knew him as a human being have little to say about him that’s good. He was known as a prize jerk. This is the reason that enormous amounts of money are invested in climate change denial. People who make vast profits would be forced to make substantially less profit if climate change were true. So they have invested millions into public relations, paid off scientists, and worked with other profit-makers to stop politicians and community leaders from countering practices that increase pollution.
10. Profit is not the reason for innovation and/or invention. Tesla invented electricity because he wanted to provide people with energy – free. Mankind harnessed fire in order to provide heat for himself when needed on cold days and cook food because it was more appetising. Most healing practices came about because illness took away loved ones or threatened communities with fatal epidemics (think plague, small pox, etc.) In fact, profit seldom has anything to do with real invention or discovery. The constant upgrading of products in different colours, greater capacities, etc. is not the same thing as the initial invention/discovery that brought it into creation.
Enlightenment resulted in innovation and invention
11. The Enlightenment which started in the 18th century is the real cause of modern society – not capitalism and/or profit. As a result of the Enlightenment, intellectuals, inventors, academics, creatives, etc. were permitted to explore without being vilified and/or put to death by the Church and/or the State. Analysis and observation became the currency as opposed to superstition and faith. As a result of analysis and observation, many theories were tested and these led to inventions like the aeroplane and steam engines, as well as discoveries that washing one’s hands enabled one to remain healthier longer. Discovering germs, bacteria, and antibiotics were all the results of observation and analysis (science). Observation and analysis is the foundation of modern society – not profit. Certainly some men made a lot of money as a result of the Enlightenment, but the motive for discovery and invention was not and is not profit. Increased profits, nay vast profits, came about as a result of the Enlightenment.
12. Shareholders who wish to make profits are no longer necessary for funding business. Crowdsourcing can raise sufficient money for all ventures. Crowdsourcing enables owners to retain possession of their inventions as the ‘investors’ get a onetime reward that is equivalent to the money invested. IPOs are not so much a way of raising more money for the business as a way of enriching the owner/s. Seventy five percent of money on the stock exchange is used for speculation while only twenty five percent is used for investment. This means that profit for the few drives the share market with constant losses to small investors. Crowdsourcing, on the other hand, provides capital for the business without the business being in long term debt to shareholders or having to pay off a business loan with interest. The people who fund business through crowdsourcing do not have profit as a motive. The people who invest in the stock market do.
Would you be happy to earn a salary of $15,000 per month, even if it meant you couldn't make profits?
More business would flourish without profit-making
13. If making a profit became illegal, there would be many benefits to society. Goods would become cheaper as shareholders wouldn’t need to be paid. Nor would shareholders be able to hold CEOs to ransom, and the CEO then be forced to cut salaries and raise prices for goods. CEOs would, of course, still be paid the highest salary in the company, but gone would be the days when s/he would hold shareholders to ransom. That’s because the CEO would be the owner. Without shareholders, the CEO would no longer be an employee. Salaries and wages would be higher. In fact, all people should earn a salary, and salaried workers should not work more than 20 to 35 hours per week. Nor should income be based on hours worked.
When the motivation isn’t profit, the community as a whole becomes wealthier. For instance, I have provided thirteen points (not ten) for reconsidering in this article. My motive wasn’t to give as little as possible for as much reward as possible. It was to enlighten my readers. So next time someone tells you that people won’t innovate, work, be motivated, etc. if business doesn’t make a profit, make mention of some of the reasons above!
© 2015 Tessa Schlesinger