WHEN PROFIT IS A MEANS TO AN END
Profit can be more generative than you might imagine
A thriving economy relies on the continuous circulation of money, a fundamental concept that underpins the economic model presented in this book This principle transcends ideology and political beliefs, resonating deeply within us all Our ongoing experiment, conducted with diverse audiences since 2010, illustrates this vital understanding.
In our experiment, participants are instructed to draw a horizontal line on a page Above this line, they create a symbol or image that embodies a healthy, sustainable economy Below the line, they mirror this task by illustrating something that reflects the current state of our economy.
For a sustainable economy, most people visualize something cyclical and balanced Circles, the infinity symbol, and wave patterns are the three most common images
Images representing a sustainable, healthy economy
For our present economy, most people visualize something hierarchical or unbalanced Triangles, straight lines, and jagged patterns are the three most common images
Images representing our present economy
A sustainable economy relies on the inherent wisdom that balance is essential, utilizing money and resources in a circular manner This principle of circulation should be integral to the functioning of our economy, not merely an afterthought, but rather the natural flow of economic activity.
Currently, we operate within a linear economy that prioritizes throughput, leading to significant resource waste and wealth concentration among a select few The circulation of resources and money is merely an afterthought rather than a fundamental aspect of this system Many individuals striving for a sustainable economy often feel as though they are battling against the entrenched rules of the economic framework itself.
1 Our experiment has involved audiences that include students, educators, politicians, investors, CEOs, environmentalists, and social justice activists
Fortunately, there are alternative business models that many of us overlook, despite their growing significance These models offer a path toward the healthy and balanced economy that many people aspire to achieve.
The economic model presented in this book inherently emphasizes the circulation of money, ensuring that all participants receive fair wages while reinvesting any surplus back into the system Ultimately, the goal is to provide individuals with sufficient income to meet their current expenses and save for future needs.
This approach reflects the fundamental principles of ecosystems, where each species consumes only what it requires, allowing any excess to be available for others Unlike human systems, ecosystems lack equivalents of excessive savings or tax havens, as the accumulation of wealth would harm the overall balance and health of the ecosystem.
In the savannah, lions do not hoard food but hunt only what they need, allowing other species like vultures and hyenas to thrive by leaving behind some of their kill Accumulating excess would disrupt the food chain, leading to starvation among various species, including the lions themselves Similarly, in our economy, a small minority hoards wealth, which weakens the entire system The crucial issue lies in how surplus wealth is managed, as its concentration can destabilize the overall economic balance.
This book posits that businesses focusing on profit as a means to achieve greater objectives will outshine those that view profit solely as an end goal In this opening chapter, we aim to redefine the concept of profit, exploring its role and potential within the economy, and envisioning a healthier economic landscape rooted in this innovative perspective.
What do you think of when you hear the word ‘profit’? What sort of thoughts and feelings arise?
Many of us think of a wide range of associated words all the way from ‘greed’, ‘excess’, and
Profit is a fundamental aspect of society, influencing our perceptions of selfishness, business, reward, and investment It serves as a driving force that propels economic activities and shapes our understanding of value, highlighting its crucial role in making the world function effectively.
Many individuals view profit as a positive force that drives economic activity and rewards hard work and entrepreneurial risk-taking However, there are contrasting opinions that see profit as a catalyst for destructive behaviors and selfishness, leading to wealth hoarding Ultimately, many people hold mixed feelings about profit, recognizing its advantages and disadvantages.
Profit is a crucial concept in business, representing the financial surplus generated from activities, defined as the difference between earnings and expenditures related to buying, operating, or producing goods or services While profit itself is not inherently good or bad, its role as a surplus of economic activity is significant The management and allocation of this surplus determine the health of our economy, influencing whether it thrives or faces destructive challenges Understanding profit is essential for assessing its impact on economic well-being.
To assess whether a business is generative, positively impacting the overall economy, or extractive, detracting from it, it is essential to ask, "Who profits from the profit?" This question helps clarify the true beneficiaries of a company's success and its effects on economic health.
The Company that Changed Our Lives
Many are aware of the harmful practices aimed at maximizing profit, such as worker exploitation in sweatshops and environmental degradation through overfishing However, fewer recognize the existence of businesses and entrepreneurs worldwide that pursue profit through sustainable and ethical means One such company inspired the concept of this book and transformed our lives significantly.
In 2009, Colin Saltmere presented his civil engineering company, Myuma, at a conference in Brisbane, Australia, highlighting its 50 employees and an annual turnover of 17 million Australian dollars He showcased their projects, including road construction in north-west Queensland, and made a profound statement that resonated with the audience: “And we’re not-for-profit.”