Poverty Pitch

The intersection of American business and global poverty

Just go with the cashflow: profit motive good for society

3 Comments

Futurama Fry saying "not sure if profit is selfish or socially responsible"

Futurama Fry talks about profit
(meme created via http://memegenerator.net)

The Triple Pundit dedicates a whole section of its website to a collection of blog posts offering different perspectives on what it means for a business to be “Socially Responsible.” Helping the environment, looking at social impact, pushing for consumers to make conscious decisions … these seem like normal CSR tag lines that I’ve seen in the past. However, one article caught my eye because it argues for what would seem like a counter-view to the “lets save the world” attitude of CSR. According to Jonathan Mariano, the main social responsibility of businesses is…(are you ready for it?)…increasing profit!

Mariano argues that the role of businesses in society is really to provide for individual’s needs. Businesses are being socially responsible as long as they are able to look out for someone or a group in society and their families. He goes on to say that profit is often seen as negative and exploitative because it is not being taken under the condition that “increasing profit must be sought without the initiation of force.” This means that a profit motive should not be penalized as long as it does not impede on the ability of others to provide for their own needs. This condition, if followed, supposedly allows the market to be a fair playing field for all in society to benefit from businesses.

At first this seemed strange to me, but then I thought of microfinance. Microfiance programs aim to give economic opportunities to people at the bottom of the pyramid by providing them with a microloan to start and run their own business. In theory, this sounds like a good idea, but there are a lot of things that could complicate the system. Could these small and medium enterprises (SMEs) that started with Microfiance loans compete with other businesses? Do larger corporations profit more from providing loans to these SMEs businesses – and thus increase the inequality between them?

I think that Mariano’s concept of “force” is interesting. He gave the example of Clean Energy Subsidies as a forceful way of making profit by using taxpayers money. This means that even if clean energy programs help the environment, they may impede of the ability of businesses to play fair. Does it count as force to ask consumers to pay more or solicit more money from investors to fund initiatives like Fair Trade and other programs that aim to alleviate global poverty?

Mariano could argue that the system as it is right now does not allow for equal opportunity for all because of those companies that forcefully impede on the opportunities of smaller businesses. However, what does this mean for the role of  CSR programs? Are they unnecessary as long as a business is not doing any harm to the world? Could they be the “force” that contributes to the corrupt capitalist system?

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3 thoughts on “Just go with the cashflow: profit motive good for society

  1. Very informative. I like how clear and concise the article is although you kind of lost me with your argument about microfinance programs–I don’t really see how they are connected with Mariano’s theory. Maybe a little more explanation would help.

  2. I agree about more explanation, but you are very knowledgeable! Good headline, and your banner is fantastic, I would maybe recolor it so the band is a light blue instead of yellow. I cant get over how much I like your banner.

  3. Thanks for the comments! I wish i had more time to go deeper into this. Maybe I’ll do a follow-up post to explain more.
    Stephanie – is it yellow? It comes out as a light green-bluish color in my computer. I wonder how I can change that.

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