The Debate: Should businesses put purpose above profit?
It’s capitalism’s age-old question, should businesses prioritise purpose over profit? Two writers hash it out in this week’s Debate
YES: We cannot have infinite growth on a finite planet
Imagine a world where people mattered more than money. Where we were conscious of the impact our business was having on our planet. Where our worth was not judged by our bank balances and the stuff that we owned but by our value to our family and community. A world where leaders were not simply employed to deliver shareholder returns at any cost.
We think this revolutionary idea of living is impossible. We forget we created the current exploitative, depletive system – and we can create another.
Countless scientists tell us that our economic models have taken nature to the brink. And yet we still believe the fallacy that we can control nature; that we can simply pay for resilience. JP Morgan and others are brutally honest about exploiting the climate crisis for yet more profit, investing in air-conditioning and other growth categories to ensure their profits are not adversely affected by the devastation they have been complicit in causing.
However, this is not a time for blame. We are all responsible for the poly-crisis today. But to imagine we can consume our way out of this ecological disaster makes no scientific or mathematical sense. We all know we cannot have infinite growth on a finite planet.
When will we realise we will never have enough of something we don’t actually need? That thriving biodiversity, a clean, bountiful, fairer, healthier environment for all is the key to a safer world. When will we wake up, seize our extraordinary collective power, have uncomfortable conversations and rise up in vast numbers to demand a different system.
Profit over purpose is last century’s economy. Let’s create business fit for our 21st century to ensure we have a 22nd.
Sian Sutherland is co-founder of A Plastic Planet
NO: We already have a fantastic way of delivering public good: the free market!
As Adam Smith might say today: it is not from the benevolence of Jeff Bezos that we expect our same-day deliveries, it is from his regard for his own self-interest.
The question whether businesses should put ‘purpose’ over profit begets many more questions: what counts as purpose? Who gets to decide? What is the order of purpose priorities? Maybe our number one purpose should be to reverse climate change, or maybe it is to reduce our reliance on migration, or maybe the main purpose on which we can all agree is to ensure that England can win the next world cup.
Okay, maybe we can’t agree on something so specific, but we can surely agree on a broad approach. Perhaps businesses should just be focused on providing the best outcomes for the most amount of people. On that we can agree, surely?
Well, yes. What’s better, we already have a fantastic way of delivering that – the free market, and the profit motive.
In a free market, we don’t need to pick any purpose(s) that businesses and people must prioritise. And we don’t need to risk getting it wrong. People can pick for themselves. From cheap food to iPhones, holidays to green energy, if there is demand for something a business will provide it. But if and only if a profit can be made. Amazon deliveries are not dropped at our doorstep because Jeff Bezos believes in the ‘purpose’ of convenience, but we benefit all the same.
For businesses, profit and purpose are not opposites – they are one and the same. We should celebrate that. Businesses exist to make a profit, but they can only do that by providing things that people want and need. Their purpose is to provide value, and we all benefit as a result.
Callum Price is director of communications at the Institute of Economic Affairs
THE VERDICT: Profit and purpose need not be enemies
Ah, profit versus purpose – that old chestnut. Let’s fight it out again!
In the purpose corner, we have Ms Sutherland, whose case for putting the greater good above shareholder returns is passionate and rallying, not least in its existential reckoning that profit matters not if we have no planet at all. To counter this, we need ambition, and her reminder that radically different worlds are possible is refreshingly optimistic.
Perhaps too optimistic. As Mr Price, in the profit corner, reminds us: man is selfish, and fighting this is an upstream battle. The free market allows us to harness that intrinsic self-interest for the benefit of the many in a way that, as Mr Price neatly puts it, means profit and purpose do not have to be opposites.
Ultimately, when businesses function well, we all benefit – from producing value for consumers to creating jobs that give us our livelihoods. Let’s leave businesses to do what they do best – business!