Wednesday, June 07, 2006

Caring capitalism

The Economics of Caring vs. Uncaring:
Which entities produce greater consumer satisfaction: for-profit enterprises such as supermarkets, computer makers and clothing stores, or nonprofit entities such as public schools, post offices and motor vehicle departments?
First, nonprofit entities do not necessarily aim to satisfy consumers, so this question is nonsense on its face. It's like asking which entities produce greater child satisfaction: clowns, or parents? Put another way, it's not meaningful to apply the same measure of success to organizations that have different goals.

Second, good results are not directly proportional to satisfaction. Again, clowning or parenting?

I agree that there has been great good that has come from the good old profit motive. The example of a potato farmer is perfect, indeed. Money can motivate people to do otherwise unrewarding tasks.

That said, I think the greatest goods in the world have not been motivated by profits. Profits facilitate goodness far more than actually motivate people. People looking for a cure for cancer are being paid, and they may even get rich, but I doubt that's why they do it.

He uses household electrification as an example of something great that happened in the 20th century. I find that amusing because that change was not motivated by profits; it came out of government intervention.
Private utility companies, who supplied electric power to most of the nation's consumers, argued that it was too expensive to string electric lines to isolated rural farmsteads. Anyway, they said, most farmers, were too poor to be able to afford electricity.
Ultimately, I think this is a Coke or Pepsi question. If you think the best thing that happened to humanity is the iPod, there's no question that capitalism is the driving force behind the best in life. If, on the other hand, you think humanity's best are things money can't buy, capitalism is kind of cold and calculating.
Post a Comment