From Pope Francis to Occupy Wall Street, there has been a notable trend recently of considering all forms of business profits to be harmful to society. Business profits—the money that remains when a business’s revenues exceed expenses—are condemned as, at best, a driver of inequality, and, at worst, an inherently unjust form of theft.
This view not only persists, but seems to be growing during a period when the benefits of the profit-driven economic system should be obvious to all reasonable observers. And the animus is not just a figment of free-marketers imaginations. A recent study in the Journal of Personality and Social Psychology finds that many people have an instinctual anti-profit bias. As the abstract of the paper notes,
Profit-seeking firms are stereotypically depicted as immoral and harmful to society. At the same time, profit-driven enterprise has contributed immensely to human prosperity. Though scholars agree that profit can incentivize societally beneficial behaviors, people may neglect this possibility. In 7 studies, we show that people see business profit as necessarily in conflict with social good, a view we call anti-profit beliefs. Studies 1 and 2 demonstrate that U.S. participants hold anti-profit views of real U.S. firms and industries. Study 3 shows that hypothetical organizations are seen as doing more harm when they are labeled “for-profit” rather than “non-profit,” while Study 4 shows that increasing harm to society is viewed as a strategy for increasing a hypothetical firm’s long-run profitability. Studies 5–7 demonstrate that carefully prompting subjects to consider the long run incentives of profit can attenuate anti-profit beliefs, while prompting short run thinking does nothing relative to a control. Together, these results suggest that the default view of profits is zero-sum. While people readily grasp how profit can incentivize firms to engage in practices that harm others, they neglect how it can incentivize firms to engage in practices that benefit others. Accordingly, people’s stereotypes of profit-seeking firms are excessively negative. Even in one of the most market-oriented societies in history, people doubt the contributions of profit-seeking industry to societal progress.
As Dylan Pahman recently wrote, without profit companies go out of business, all of the people who work for them lose their jobs, and poverty grows. “When people profit from the creation of new wealth,” says Pahman, “it is because they take the world God has given us and make something more of it for the good of others and for God’s glory. It would be shameful to throw that away.”
How can we help people to recognize the societal benefits of business profits? What are some practical ways we help people shed their anti-profit bias?