Profit is an indicator of success
In recent years “profit” has become something of a dirty word and corporations have been encouraged to seek wider social goals following an agenda of so-called “social responsibility”. I would like to start by saying a word or two in defence of “profit”. As the Pope has just been here, I am going to start by referring to Catholic social teaching – and then I will not refer to it again explicitly. The Compendium of the Social Doctrine of the Catholic Church describes profit as an ‘indicator’ that a business is performing well and that the productive factors have been properly employed. This is true – profit is a signal that important ends are being achieved by a business.
In economic terms, profit is the return from entrepreneurship. Entrepreneurship, in turn, involves the discovery of forms of economic activity that lead to the fulfilment of a hitherto unfulfilled need or that fulfil existing needs more effectively. The mobile phone, artificial hip and so on are all products of entrepreneurship. Profit is an indicator to the entrepreneur that he has been successful in creating something of value to others. Even an individual who had no material desires whatsoever, who wanted to give to charity all his profits, may wish to consider a vocation of entrepreneurship which involves industrious attempts to make profits because the profits would be an indicator that he was producing something of value to others…
Read the rest of the piece on the Cobden Centre website.