Does a Business Exist Only to Make Profit?
Should businesses be held morally responsible for their actions? Or are they exempt?
What is the purpose of a business? Is it simply to make money? Or should businesses be held morally — as well as legally responsible — for their impact on society?
If a company has complied with the law, can it be said to have done anything wrong? Making a successful business is no easy feat, and the competition is unforgiving. Everyone will take every advantage they can get, and in most cases, cutting corners will get you the most bang for your buck — but this comes with a cost to people, animals, and the environment.
Paying for the cheapest possible outsourced labour, for example, makes excellent business sense to guarantee an attractive price for customers. Companies will use similar methods to drive down prices, like dumping waste out of sight, using pesticides that damage the soil and local inhabitants, and using the cheapest (often dirtiest) source of energy available. There are further ways to increase profit, such as advertising to children during peak times, using exaggerated claims about how excellent your product is, or raising the price of a necessary product (like medicine) knowing your customers will have no choice but to buy it anyway.
Compare one business which refrains from such questionable practices, and a competing business which has no issue with destroying the environment, taking advantage of children, or capitalising on illnesses. The latter business will come out on top, even though both businesses could be operating within the law. Of course, there are some regulations in place for this purpose — but these are far from exhaustive, and there exist many legal ways to increase your profits at the expense of someone else, especially in countries with more relaxed regulations.
Perhaps this is perfectly fine. The law rules out the worst of the impacts, like slavery, and businesses are free to operate however they like within the law to achieve their main goal: making money. Companies do not exist to make the world a better place or act as a bastion of good morals — that is the job of charities, governments, and leaders. Companies exist to make a profit for their shareholders, and offer jobs to the workforce while stimulating the economy — if we want them to be moral, we should instead seek a volunteer organisation.
Of course, this isn’t to say that they can’t be moral if they want to be — they can do as they like (within the law). If it is fashionable or avoids bad publicity to respect the environment, then so be it — but we should not expect them to be moral by default. Everyone needs to make a living, and this is just what businesses are doing for their shareholders.
At least, this is one side of the story.
I hold the contrary view — that businesses have just as much moral responsibility as ordinary people. To explain this, let’s consider an individual — should an individual have moral responsibility? We generally think so, otherwise everyone would do as they please and society would descend into chaos. Philosopher Thomas Hobbes termed this as a ‘state of nature’, where we would enjoy increased freedoms to do whatever we like but would be constantly alert to protect our possessions and livelihood. There would be no consequence for theft, murder, and so on — life would be a barbaric squabble for resources which he describes as ‘solitary, nasty, brutish, and short’.
So individuals need to be moral — what about businesses, then? A business can be defined as the collective efforts and activities of individuals to trade goods for profit — a group of people acting together for commercial purposes. While it is true that everyone needs to make a living to get by, there is nothing fundamentally different from an individual making money to a group of people making money.
This is the crux of the argument: we believe that individuals have moral responsibility, and businesses are made out of individuals. Admittedly, they are subject to many more laws than the individual — but this is because their impact is greater than that of an individual. If we believe that our neighbour who throws rubbish out of their car is irresponsible, we should uphold the same moral standards to businesses — if not more, because their impact is greater.
It’s true that businesses are not made to be good examples of moral behaviour. It’s also true that businesses need to make money and remain competitive — but these things are also true for the average Joe, who makes a living without causing excessive harm to their surroundings. In contrast, it has become increasingly normalised for businesses to shun their responsibilities to society and the environment without consequence. Workers are paid poorly and endure harsh conditions, habitats are cleared for agriculture, and waste is dumped wherever is most convenient. The cost to other people, and especially to the environment, simply isn’t factored in. Granted, this doesn’t apply to all businesses. But to those that it does, there is no good reason why they should be exempt from judgement in the name of financial viability. If all moral responsibility were brushed off with the excuse ‘we need to make a profit’, then the world would be a dire place.
James is an undergraduate passionate about social issues, climate change, and philosophy. He aims to have enough optimism to dream of a better future, while providing practical advice to help achieve it.
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