3 votes

Beyond the bottom line: Should business put purpose before profit?

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  1. patience_limited
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    Like others quoted in the article, I'm skeptical that businesses can meaningfully knit broader goods into their business plans in the current environment. In an unregulated market, the drive...

    Like others quoted in the article, I'm skeptical that businesses can meaningfully knit broader goods into their business plans in the current environment.

    In an unregulated market, the drive toward competitive share of profits will always equilibrate to the lowest achievable costs, not the most long-term sustainable production. It's less expensive to manage a brand's reputation for consumers than to actually improve sustainability and the well-being of workers, environment, and community.

    Corporations or plutocrats also lack expertise in what community well-being, sustainability or other public goods consist of. Their efforts to promote them have often had poor results.

    Pension and hedge funds, as major shareholders, may be developing some immunity to marketing and financial statements, but they're not going to continue applying pressure to reform if they can't deliver at least some margin to participants.

    We've already seen what happens with globalized, race-to-the-bottom competition, in the absence of adequate regulation - loss of worker rights, environmental destruction, wasted resources, loss of public goods, and devastated communities.

    "Free" markets are not sustainable or fair without external governance and genuinely public goods (education, welfare, civil and criminal law enforcement, natural resource reserves, etc.).

    See this also for why shareholding and stock prices are a poor means for determining best corporate resource allocation.

    2 votes