Don't Unplug The Profit Motive
The shocking greed of a few corporate officials has recently rocked the faith in our economic system. Some investors are even questioning their own personal motives for where they put their money.
The shocking greed of a few corporate officials has recently rocked the faith in our economic system. Some investors are even questioning their own personal motives for where they put their money. They see that their own lust for gain may not have been all that different from that which drove top executives to commit fraud and thievery. It seems that the profit motive itself is at the root of all this corruption. Anything to make a buck!
This is very foggy thinking. Consider this comparison:
The power of the profit motive is a lot like the power of electricity. Electricity drives our machine tools, lights our shops and factories, and runs our computers. Until we discovered the nature of electricity only a few centuries ago, however, our encounters with this form of energy were random, mystifying and dangerous. It was best known in its most violent and deadly natural manifestation, the lightning bolt. Today, controlled and put to use, electricity makes our modern civilization possible.
The profit motive can be an equally mysterious but pervasive form of energy. It does indeed power our economy. The profit motive is the pressure that self-interest applies to human action and choice, especially those regarding exchanges made in the marketplace. It is a force that inspires investors to fund the invention of new products and bring them to market. These goods compete with those from other such companies. Consumers, intent on advancing their own self interest, reward the company offering the best value. This is free enterprise in a nutshell.
Both electricity and the profit motive have the potential for much benefit or much harm. It all depends on how well we understand and control these forces. Electricity can be mishandled, leading to accidents or injury, but that does not mean we should ban it. The mishandling is at fault. Likewise, for the sake of profit, some people have mistreated themselves or others, often to heinous and criminal proportions. That does not mean that the profit motive is wrong or evil. It's the excessiveness that is to be condemned.
Believing that our economic system is based on greed is as illogical as believing that a toaster operates on lightning.
Free enterprise is still the best way to handle the profit motive so that it maximizes efficiency and minimizes human want in a climate of tolerance and personal freedom. Just as we will continue to learn safer and more effective ways to apply electricity, we will also continue to develop better ways to regulate and safeguard our economic system.