My recent adventure in “light-reading” has been on the theme of Capitalism and our profit-oriented economy.
I’ll be upfront from the start of this post — I don’t really have anything to say yet; but I have some things to think about and that is always the first step for me.
Let’s start at the point of contention I have with the way our economy works: our economic system is built around the concept of “making profit” rather than ensuring the financial security of all citizens (or at least as many as possible). Businesses exist to earn profits for those who own the business. Those profits may (or may not) then be reinvested in the business in an attempt to earn even more profit.
So, the first issue I am grappling with is the concept of profit itself. Profit is waste! Profit is something that has no real value to a society. It has value to a very small percentage of a society, but it does not benefit a community, a region, a country, or its people.
Profit can be reinvested, but is only ever done so with the hopes of earning more “waste”. Profit is, by its very definition, what is left over when everything has been paid for. It is “more than is needed” for the operation of a business.
A company can earn a lot of this “waste” (profit) and still not meet the expectations of its owners and so “lays off” real people in an effort to reduce costs and therefore earn more profit. The quickest way to increase profitability is to reduce staffing costs … so real people are hurt in the pursuit of profit.
That’s my first issue, but if you’re ever interested in light reading, you’ll find that this issue is at the very heart of our economy.
The way our economy is structured, all businesses must do two things:
The first thing that must be done to “grow” and become profitable is to expand. A local market is not enough for a “successful” business. You must be able to expand into new markets and new sectors and new …
Growth requires expansion is your goal is profit. If your goal is to “make a living”, expansion is not necessary, but most businesses do not have the goal of simply making enough money to pay their bills, their employees, and sustain their business operations. Growth is key.
The second item seems a bit more tricky – since most businesses do not appear on the surface to be exploiting anything – but is easy to understand once you look at it a little closer.
In order to earn profit, a business must produce more than the sum of its inputs. What that means is if you take the raw materials that you purchase at $___ and add the human resource (staffing) costs you purchase from your employees at $____, you must be able to produce something that you can sell for more than the sum of those two numbers (and in real life, all the other numbers that are “expenses”).
In order to do this, a business must;
a) Reduce the cost for the raw materials below what is their “going price”.
b) Push employees to produce more than it costs to use them.
In each instance, this is the definition of exploitation. You are using your position of power and influence to either pay less for something than it is worth or to push that resource (especially human) to produce more than you are paying for.
If a business was paying real value for its inputs, profit would not exist. Profit can only be achieved by exploiting the inputs of the process and therefore receiving a greater price for the “sum of the parts”.
This may not seem horrendous on the surface – because it is subtle and a normal part of life – but business is built on the concept of exploiting for profit as opposed to building communal health, wealth, and well-being.
And that is what I am thinking about. Is this a good thing? Does the system have any real value? Who are the people being exploited in the process of my attempt at creating personal wealth? What would a “better way” look like? How can I make a difference in my circle of influence? What would a kingdom of God economy look like?
Happy thinking ….