Profit is an indicator of success

Philip Booth

23 September 2010

Institute of Economic Affairs > Blog > Uncategorized

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.

Prof Philip Booth

Philip Booth is Academic and Research Director at the Institute of Economic Affairs and Professor of Finance, Public Policy and Ethics at St. Mary's University, Twickenham. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. Previously, Philip Booth worked for the Bank of England as an advisor on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs and on the editorial boards of various other academic journals. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.