Profit

We have been the parents of two Great Pyrenees dogs. Both were wonderful companions and although they sometimes intimidated people, they were friendly, especially to children. The Great Pyrenees is an offshoot of the Tibetan Mastiff line, traditionally a guardian of livestock and palaces, such as Versailles. They were also employed by the French Resistance during WWII to smuggle goods across their namesake mountains between France and Spain.

A Pyr can follow basic commands – sit, stay, down, halt – albeit at a slower pace than a Border Collie or a Retriever. Both of ours had a problem with “come.” We were told that most of the time a Pyr thinks, “What’s in it for me?” If they conclude whatever you’re offering is good enough, they might do as you say, but don’t count on it. They were bred for independence. They had to be able to determine “friend or foe” instantly and then get up and challenge a predator. Some have displayed awesome courage and tenacity in this regard. Still, if a Great Pyrenees could talk, it might say, “All in a day’s work.”

As I think about human behavior, it strikes me that “What’s in it for me?” is a common refrain these days. Some say without big rewards nobody will strive for excellence. We often hear people complaining, “nobody wants to work anymore.” Nevertheless, it seems to me we ought to pay people adequately (without resorting to government assistance) if we expect them to do good work. We also need to keep in mind that beyond a certain amount, more money does not necessarily result in better performance from executives.

The thought process: When people in leadership positions make decisions that result in greater profitability, they are entitled to their share. And certainly, those who invest in more profitable businesses are entitled to be rewarded accordingly. On the other hand, people who work hard and contribute to the success of a company have been told they are lucky to have a job, or to stop acting so “entitled.” Further, workers are subject to mass layoffs while the company buys back stock or pays bonuses to C-Suite employees.

In classic capitalist theory, profit is a good thing. The idea was to re-invest some of it, to develop new products and services, to improve quality, to finance new facilities, to improve the workforce, in other words, to make the business more able to compete. I’m not sure what the purpose of profit is now that we have billionaires with destroyer-sized yachts, multiple baronial estates, personal spacecraft, and a net worth surpassing many nations.

Some capitalists have discovered it’s not necessary to build more products or hire more workers. They can make more money by keeping their most in-demand products scarce and simply charging more for them. When there were more small and medium-sized businesses there was more competition – again a benefit of classic capitalism. Now, mega-corporations vie for greater monopoly powers and even large governments can’t seem to regulate them.

Certainly, investors and entrepreneurs take a lot of risks. And governments provide grants, loans, subsidies, and underlying research. Shareholders aside, the effects of a large corporation on society are inestimable. In terms of numbers, it can be argued that society is the ultimate stakeholder. When a chemical company or railroad discharges toxic waste into streams, rivers, and lakes, who suffers? When an oil company spills crude oil onto beaches and wildlife, who cleans up? When a power company causes a wildfire, who must fight it and rebuild? Hint: it’s not those who have millions. The risk tends to shift to the many, often to those who can least afford it.

I’m not against profit. I’m against people profiting at the expense of others. In his debates with Stephen Douglas, Abraham Lincoln pointed out “…the eternal struggle between these two principles – right and wrong. They are the two principles that have stood face to face from the beginning of time and will ever continue to struggle. It is the same spirit that says, ‘You work and toil and earn bread, and I’ll eat it’.” If a man “makes” $10,000,000 per year, does that mean he works 300 times harder than the average wage earner? Does that mean he is “good” enough to lay off thousands of people to maintain a profit margin and therefore “earn” his salary? It seems to me if he’s worth his salary, he ought to be able to figure out how to generate more revenue without the layoffs.

A moment of wisdom: “For what shall it profit a man, if he shall gain the whole world, and lose his own soul?” (Mark 8:36)

I knew an executive who would lose sleep at the mere thought of laying people off. He did everything he could to make sure people would remain employed. He thought it was in the company’s best interest not only to turn a profit but also to benefit its employees, and through them, their communities. It seems like a quaint notion now. But what if it came back? What if the purpose of a business was as much about serving its stakeholders as it was about rewarding its shareholders? The company’s answer to “What’s in it for me?” might then be, “Everyone profits. All in a day’s work.”