Is Profit-Making Compatible with the Principles of a Steady-State Economy?

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Publication TypeConference Paper
AuthorsSilva, GTrettel, O'Neill, DDaniel
Download: 3380.pdf

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This is a very interesting article and brings up some very important points about the role that business can and should play in a post-growth society.

I think the Post Growth Institute's current book project could add a lot of value to this and other discussions that focus on business and profit in the post-growth context.   The book's macroeconomic model, the Not-for-Profit World, illustrates that it's essential to understand the difference between a company that can generate surpluses (profits), but cannot privatize them (i.e.- a not-for-profit business) and a company that privatizes profits.  We've found that it's not profit itself that does any harm, but rather what is done with the profit.  If it is distributed and accumulated privately, then it can be a very destructive element in the economy, as we're seeing today.  But if profit is just surplus that is reinvested and cycled back into the economy, then it can be a truly generative element.  In fact, that's how we like to frame it: social profit is generative, while private profit is extractive. 

So, it is important not to become allergic to the word "profit", but rather interested in how and why it's generated and whether or not it's being privatized.

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