Against Profit Maximisation

The Roman Empire went under due to the excesses of power maximisation in the hands of a self-divinised elite of Roman emperors, and the Christian reforms may be seen as a civilisational effort to re-embed power into the larger interests of the community and the order of nature.

We can argue that capitalism will go under due to its excessive focus on profit maximisation, and is in need of similar reform, re-embedding profits in the larger goal of the survival of nature and human communities.

A similar argument is made by William Davies, author of Re-inventing the Firm :

William Davies:

“Further from Canary Wharf and the City, more vocational, socially-conscious managers had already woken up to the dangers of ‘maximisation’ as a goal. As I explore in Reinventing the Firm, businesses that are not subject to the pressure of external shareholders or private equity funds can be considered profit-making, but not profit-maximising.

Profit, after all, is simply that which is left over. All societies, as the French social theorist Georges Bataille explored, have some way of dispensing this excess, be it sacrifice, public gifts, retention or hedonistic over-consumption. But any economic model that seeks to generate as much of it as possible is clearly self-destructive in the medium or long-term.

Ecological systems may represent a helpful model in this regard. At least rhetorically, they move us away from a mechanistic view of the economy, towards something more adaptive, softer and oriented around survival. A more nuanced understanding of both capitalism and nature might recognise that ‘survival of the fittest’ isn’t some quasi-Fascist appeal to supremacy, but a recognition that survivors are those who fit in with their surroundings.

But ideally we manage without scientific analogies at all. The first question is how we can return to thinking of business in optimising terms, rather than maximising. Then the deeper question is how we became so deluded as to treat surplus extraction – surely a bi-product of making, exchanging and consuming – as our raison d’etre in the first place. The fact that surpluses are simple and quantifiable, while achieving them is complex, is an absurd justification for elevating the former above the latter in our hierarchy of economic goals and needs.”

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