Why we choose profit
Jason Fried
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The Ethics of Making a Profit

And why this phrase is still an oxymoron, for the most part

By MARTIN REZNY

Yeah, well, trying to be profitable and ethical at the same time is great and all, but what do you do in a situation when the only way to make a profit is to do something you don’t want to do and/or something that isn’t the right thing to do? Or when to make a profit means to specifically not do what you want to do and/or something that’s the right thing to do?

Until you reach a situation like this, all the talk about how chasing profit is not wrong in and of itself and may even be helpful is just empty posturing. Until you reach an actual moral dilemma, and explain and justify your approach to that moral dilemma, you have essentially said nothing. Other than “wouldn’t it be nice if I didn’t have to make any tough moral choices”.

It’s entirely possible that a dilemma like this was never forced upon you in your business. Which isn’t statistically likely, but in individual cases it’s absolutely possible, especially in some kind of software-related industry where one doesn’t run into any real scarcities and resulting hard conflicts of interest. I do know for a fact of at least one example of that (see Red Hat’s Jim Whitehurst’s The Open Organization: Igniting Passion and Performance.)

Sometimes, it does so happen that being nicer and more respectful to your employees will make them be more effective. Sometimes, a more culturally diverse team will outperform less culturally diverse teams. Sometimes, higher salaries, lower prices (like giving stuff away for free), more transparency, and less hierarchical organizational structures will result in higher profits and faster growth. Which is wonderful, when it happens. But the question remains:

What will you do as a CEO when you have to be unethical to make a profit?

Otherwise, it’s just easy to be nice when it costs you nothing. And no, somewhat lower profits that are still profits are not a real cost.

In case you’re wondering, I’m not just saying this to naysay, I’m really interested in an answer to this because I’m living through this situation right now as much as an individual can. I have a particular set of skills that can be quite profitable, but almost exclusively in ways that both go against what I want and against what’s ethical by most definitions. Well, unless you consider things to be right just because they’re technically legal and/or turn a profit.

Then there are many other skills that I have that for some reason have been assigned no financial value by the rest of the society. I could be teaching people, or specifically kids, critical thinking and public speaking, which everyone keeps telling me they want and need (and that I do it very well), but almost no one is willing to pay for it even when they have the money.

I could also be producing all kinds of art which again mostly gets very positive feedback but no one is willing to pay for in any way, shape, or form. I’m also pretty good at journalism, social science, and philosophy, but there’s no funding for any particular kind of any of those that I can and want to do, however lacking and needed they may be objectively, precisely because they’re not being done well enough or at all.

I mean, of course there’s some funding for things like this, but it’s merely scraps thrown under the table — random grants, individual donations, limited programs at a few enlightened institutions here and there. Not enough by far for even a fraction of the number of people needed to perform these things to make a living by doing so. Getting funding this way feels more than anything else like professional begging. Which becomes the larger part of the job.

There’s also no fair and sensible mechanism to distribute this meager amount of money to those who are by any objective and fair standard best at what they do. In reality, the money tends to get to the loudest or the most crowdpleasing people, or to anyone entirely by accident. Alas, luck is not a perfectable skill, and you’d be legitimately surprised just how cutthroat can especially non-profit business get as a result of such scarcity of resources.

One can respond to this by saying that I should just get used to the way things are and be glad that I have currently at least found a job which isn’t unethical — my solution to the dilemma for the moment is to just do what I don’t want to and is not the best use of my skills, but contributes to something mostly good, even if that’s not my fight or mission.

However (and I guess that’s why I’m saying all this in response to a moral defense of profit-making under special circumstances), this way things are has not come about by itself, nor is it self-perpetuating. The reality that we now have is the result of the kinds of priorities that we turn into actions, every day.

If the priority turned into action is profit, then higher profits and lower costs is what we’re going to have as a society. What we’re not going to have on the other hand is all the nice invaluable things that cost valuable things.

In case it’s not clear, a little linguistic analysis — when one says “valuable” in economic terms, it only actually means “something one can assign a value to”. It doesn’t mean that “valuable” things are better to have, they’re just tangible. “Invaluable” conversely means “something you cannot assign a value to”, and arguably, these things are usually really extremely good to have, like love, friendship, health, or a flourishing public sphere and democracy.

When we have debates about the valuables against invaluables with the kids, someone always brings up the argument that things like love, friendship, and health can be assigned a value because they cannot be afforded if you don’t have a certain minimum amount of money they require to be made a reality.

Which is true, they can be materially prevented, but this thought also has a flipside — one may end up assuming that when one has more money, he or she is more likely to have more of these invaluables as well because of it.

In practice, however, above a certain limit, more money doesn’t make people any more happy, quite the opposite actually, because of all the additional stress and greed, and there’s no reason to expect that a society that gets materially richer beyond a certain point should behave any differently.

While I do believe that Jason’s proposal is a start — not seeking to maximize profits, just to have some — it’s still only a half-measure, a compromise at best. However hard it is on a personal level, and especially to someone living in or influenced by American culture, I’m starting to believe that maybe sometimes loss, failure, or denial of service is the right way to go about doing things.

If to succeed means to do the wrong thing or to participate at a perpetuation of a wrong system, maybe one should instead fail as a form protest. On a practical level, a system cannot function when no one wants to participate in it, and that’s especially true of capitalism. Any product or standard is justified every time anyone accepts it by either paying for it, allowing to be paid by it, or respecting it in order to achieve or increase one’s (company’s) profits.

In other words, if no one bought anything made by a child, no children would be forced to make anything. If no one was willing to tolerate an egomaniacal, sexist, or racist idiot of a boss, there’d be none of those. I don’t think one can ever eradicate all dilemmas this way, like the tension between going for more of a mass appeal in the capitalist model versus higher sophistication that’s more elitist by its very nature, but there’s a lot of room for improvement.

Unfortunately, what it means is to deny things to oneself and to his or her enterprise, or to the society at large — one would have less food, or clothes, or entertainment, maybe even have to go broke or homeless. Then again, when have we become so incapable of any kind of sacrifice? To a point where nothing seems to be acceptable justification for not profiting, including not getting something cheaper in a bullshit way when one could pay for it?

Just look at what people have decided to stop paying for globally in recent years and what that did for example to the news, turning it into squirrels on water skis interrupted by more or less hidden advertisements. Or on the other hand, look at what people have decided to throw endless money into and what that did for example to American politics, turning it into an infinite circus of lies. Both of which happened as a direct result of rational economic thinking which seeks to minimize costs and maximize profits.

Jason also talks about how focusing on making profit makes one free from owing time to others or having to follow trends, but I really don’t see how that can be the case. You may be free from having to literally beg sponsors or investors as many NGOs have to, and that really sucks, I know, but you’re still bound by what your customers want. Which is to always get more for less, as well as any hip, free, cool, in, and trendy thing there is at any given time.

To keep in mind the examples I provided, what else should, or even can, the people in the news industry do, if they want to turn any profit? They sure as hell cannot do proper journalism. The only solution that sort of works are the serious comedy “news” shows, and ask people like Stewart, Colbert, or Oliver — they don’t consider what they do to be better than actual serious journalism.

Or in the case of American politics, what other ethical choice is there, other than to refuse the legalized bribes and cosequently risk losing not only any financial profit, but the elections as well? In a way, being unbuyable and incorruptible may actually turn into a winning platform, at least in the long run, but that’s far from guaranteed. Not to mention that the long term win could be long after one dies, which is rather bittersweet as victories go.

I don’t necessarily have any good answers here myself, but again, that’s why I’m interested in what someone else would do. Right now, I seem to be sandwiched in between two wrongs — participating at the non-profit nonsense and thus helping to legitimize it (the idea that people will do relevant things without being paid properly), and doing what’s economically rational for me (having a wage and maybe a life), while participating at a lifestyle that I find equally nonsensical (9–5 job which is at best irrelevant).

Well, I guess it’s no answers or happy endings this time. By the way, this is the reason why there probably will be a lot fewer articles written by me in the immediate to longterm future. The invisible hand of the market has spoken, that I should do less speaking. Ah well, I guess I’ll look forward to getting unemployed again, or ill.

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