Capitalism And Doing Good Are Not Mutually Exclusive
from the tie-them-together dept
Over the last few years, it's been great to see more people realize that capitalism and philanthropy are not mutually exclusive concepts. When Google launched its philanthropic foundation, the biggest news was the fact that it was designed as a for profit entity, rather than the typical non-profit. The NY Times is now writing about this trend for new philanthropic organizations to also be for-profit organizations, recognizing that many of them have found they can do much more "good" by also focusing on a way to make a profit. As we pointed out when Bill Gates called for "kinder capitalism," a full understanding of capitalism would suggest that there's plenty of kindness baked in. There is benefit in doing good, and just because there's a profit motive behind some things, that doesn't mean it's at odds with doing good. It's great to see that more philanthropic organizations are recognizing that as well.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: capitalism, doing good, philanthropy
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Re: Capitalism and Doing Good
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They generally have the vocabulary and argumentive skills of a fourth grader.
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"Capitalism" and "Doing Good" are not mutually exclusive.
Where "Doing Good" refers to "doing good works" or "performing good acts" or "acting on behalf of the good of society."
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Not at the cost of profit!
Now that isn't to say that it can't be smart to do for a company to build a sympathetic public image even if doing so entails investing some funds doing what appear to be "good deeds". That's OK as long as it's done to actually increase profits. For example:
1.Improve public relations and thus increase sales.
2.Improve public image so as to influence legislation in a favorable way.
3.Obtain tax breaks, contracts or other government favors.
Those are legitimate capitalistic objectives. And a company should always avoid doing things for which the punishment is greater than the profit.
There's only thing that matters in capitalism: PROFIT. Period. This is something Wall Street understands well. It's nothing to fee guilty about and there's no reason to try and pretend it isn't so. Anyone who thinks otherwise can try selling stocks on Wall Street in a company that does "good deeds" instead of making money and see how far you get. Or better yet, just send me your money. I'll put it to "good" use.
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Re: Not at the cost of profit!
Have you ever heard of enlightened self interest?
Basically what goes around comes around. The disadvantaged of today are the customers of tomorrow is one aspect.
There are other aspects too. I mean, look at Microsoft. Then look at Google. One of them does good. The other is a corporation that has no concept of good or evil, only profit. Which is making more? Which is doing better?
Economists are stupid if they forget the human factor.
Doing good also helps attract the best and the brightest (since they tend to be idealists) and makes for good employee relations... and so on.
Altruism exists because helping others survive helps you and your relatives survive.
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Re: Re: Not at the cost of profit!
As long as it maximizes profits, then that's fine. That's in line with what I said.
There are other aspects too. I mean, look at Microsoft. Then look at Google. One of them does good. The other is a corporation that has no concept of good or evil, only profit. Which is making more? Which is doing better?
You mean, which one is doing a better job looking good? PR and a good image can be useful if it increases profits. Read what I wrote above.
Doing good also helps attract the best and the brightest (since they tend to be idealists) and makes for good employee relations... and so on.
As long as it increases profits, then like I said, that's fine. I never said that good deeds should be avoided even if they are profitable. In fact, that would violate what I said. If "doing good" happens to align with maximum profits, then so be it. But if not...
Altruism exists because helping others survive helps you and your relatives survive.
You've obviously never been in battle. Life is a competition with winners and losers and sometimes it's you or them. If you aren't prepared to be a winner, then prepare to be a loser.
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Treating life like a zero-sum game always leads to misery and fear because for you to win others have to lose and when you are ahead you live in fear of losing what you have. Money should never the end goal as it is a finite resource. Happiness, on the other hand, can always be increased for everyone if you focus on being happy and making others happy rather than accumulating material wealth.
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All of life competes with all other forms of life to survive!
We compete with nature and the basic forces of reality!
Humans have even taken it to the next level and made themselves as well as nature among their biggest competitors!
What kind of soft, easy environment, cut-off from the rest of us, did you grow up in?
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Mobile phones. Microfinance. Web development. Basc computer training. Business consulting. Providing agricultural market data.
There's a huge difference between taking money away from stockholders in order to give to charity and building your business model around social development. The reality is that people pay for services that are useful to them, especially services that have the potential to increase income/ generate revenue.
No one is saying that an enterprise should do good INSTEAD of making money. What we're saying is that it's entirely possible to make money by doing good.
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Well, if you aren't maximizing profits, then that's exactly what you're doing.
What we're saying is that it's entirely possible to make money by doing good.
As long as it maximizes profits, fine. But that's what I expect my investments to do: maximize profits. And that's generally what the law expects publicly traded companies to do also.
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And there is no law that compels publicly traded companies to be financially successful, although that certainly would be handy. Investments fail for all kinds of reasons, and not generally because they are being too nice for their own good.
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Yes, yes there is. They have full legal liability to the shareholders to be successful.
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Love of money is the root of all evil.
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Re: Love of money is the root of all evil.
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But I'm sure we can argue it forever. We certainly tried to in class!
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The problem that the post you argue against sees is that, all things being equal, we can only have confidence in what maximizes profits now. When you say, "whatever, as long as (and only if) it maximizes profits," then you fall into the major problem that post points to where companies are short-sighted, concentrating only on this querter's profits. If you plan for the future, there's a real chance you aren't squeezing EVERYTHING out that you could, you aren't maximizing your profits, and so you are offending your shareholders.
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That's absurd. If that were true, every profit driven business would immediately sell everything they own RIGHT NOW for the first offer they received. You could buy Microsoft for $1 because they couldn't be absolutely sure that someone else would offer them more in ten minutes. Like I said, that's absurd.
Companies are well aware of the value of investments. In fact, investing is the whole basis of capitalism: Invest your money so that it does the work instead of you. There are different kinds of investments, some are short term and some are long term. Profit, however, is still the goal. The question then becomes simple whether a series of short term investments or a single long term investment will ultimately yield the greatest profit. The answer to that question depends on the opportunities available to the investor and isn't always clear.
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NEVER NEVER NEVER NEVER NEVER
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Capitalism
The reason for this recession is not as much the greed of humans, although that is a factor, but more the stupidity. Yes, the credit card and loan companies have been playing people for years, but people were stupid enough to get played. Do you know how many people I know alone who bought a $500 a month car when they can hardly afford to pay rent because it makes them feel good? Homes people knew they culdn't really afford when they originally bought them? Vehicle trading in non-stop? People were stupid and "bought" things they couldn't really afford to make them feel better, and now they are paying the price. People who bought homes in their price range, bought cars they could afford, and lived within their means are not really suffering from this recession (or rather, imminent recession).
"Capitalism is the worst form of government... except for everything else that has been tried". Capitalism IS a morally horrible system. But it works. It counts on one sure thing to work... human greed. Yes, those rich people are greedy. But so are thos middle class who tried to live rich because it felt good and are now paying the price. Does government need to step in and regulate things somewhat? Of course. Things are not black and white, and a line needs to be drawn between total and no regulation (unless, of course, you are a libertarian :p jkjk).
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