Fit for purpose? Clarifying the critical role of profit for sustainability

Fit for purpose? Clarifying the critical role of profit for sustainability

Blog Article

This conceptual article contributes to the post-growth strand of political ecology literature, which seeks to find sustainable ways of organizing the economy that do not require economic growth.It explores the idea that transitioning to post-growth societies requires a transition in the relationship-to-profit of business.I first conceptualize relationship-to-profit as the intersection of purpose, investment, and ownership of firms.

Specifically, for-profit business structures entail a financial gain purpose, private ownership, and unlimited returns on investment; whereas not-for-profit business structures have a social benefit purpose, collective ownership, and limited returns on investment.I then outline ideal types of Hat for-profit and not-for-profit economies, based on the differences between these two kinds of relationship-to-profit.The first ideal type shows how the for-profit business structure drives consumerism, economic growth, and ecological harm, as well as inequality and political capture, preventing post-growth transitions.

These dynamics might theplayfulcollectivees.shop be slowed down by businesses that seek to balance private financial gain with social benefit (known as dual-purpose businesses).The second ideal type describes the dynamics that might be expected in an economy consisting of not-for-profit businesses, which have a legal mandate to pursue only social benefit.This analysis explains how transitioning from for-profit to not-for-profit forms of business might change some of the most problematic dynamics of the economy, allowing for post-growth transformations.

A brief discussion of the possible shortcomings of a not-for-profit economy is also offered.Keywords: Not-for-profit business, nonprofit enterprise, for-profit business, relationship-to-profit, post-growth, degrowth, economic growth, sustainability, sustainable econom.