Wednesday, November 11, 2009

Is Profit Moral?

I recently saw this question posed and I've been mulling over it for the past week or so.  The problem is, I do think that a certain level of profit is immoral or at least becomes exploitative, but where do you draw the line?  How can anyone make a judgment on when profit is too much without being discredited as a crazy left-wing socialist?

The issue popped into my head again this evening while I was reading this article by Maureen Dowd: "Virtuous Bankers? Really!?!" (http://www.nytimes.com/2009/11/11/opinion/11dowd.html?em). She points out that while the banks believe they are providing a virtuous service - providing capital to spur economic growth - in fact the banks are growing and profiting while the real economy itself is faltering, with rising unemployment and underemployment. 

Despite myself, I have to agree on a certain level with the CEO of Goldman Sachs, that banks provide an important service for the creation of wealth and along with it jobs, though in this case that hasn't been happening.  We are back to the issue of how much profit is too much?  When do the banks stop providing a valuable service and become just plain greedy?

In the end I think that profit and morality are actually unrelated.  I don't believe that you can say profit in itself is immoral.  Without profits there would be nothing to invest back into the economy and create growth to improve living standards or grow society.  Perhaps the problem arises when people who already have enough, more than they need, continue to accumulate wealth for themselves, rather than sharing it with the broader community. 

In conclusion, some words on greed from a wise man: "But if they perished, in his possession, without their due use; if the fruits rotted, or the venision putrified, before he could spend it, he offended against the common law of nature, and was liable to be punished..." - John Locke, Second Treatise of Government (1690)

1 comment:

David said...

Interesting musings, and I agree with your analysis. As I see it, profit isn't immoral - it is necessary to attract the high-flyer types necessary for a bank (or other industry) to be successful - but it is the pursuit of profit that leads to immoral and downright illegal behaviour. The optimal situation is where the rewards to the bank and the bosses is enough to ensure success while putting separate pressure on the bank to provide a socially responsible service. Sadly, with the relaxation of regulation over recent years, the very people who stand to gain most from unbalancing these pressures have been given exactly this power.