Not-For-Profit - No Profit
While self-interest can be a strong motivating force to get us to work hard, it is often too difficult to connect pay to effort sensibly. Fortunately, there are plenty of things other than self-interest that motivate us. We are social creatures and are hard-wired to want to cooperate. For most people, it feels good to help other people. It feels good to do good work, even if someone else benefits from it. We work best in nurturing, supportive environments where we feel good about what we do. Incentives only get me out of bed in the morning and launched into tasks. How well I do at the tasks depends mostly on how I feel about them and how engaged I am with the work I am doing.
I can’t think of any compelling reasons why for-profit companies can’t be operated on a not-for-profit basis. Not-for-profit organizations can hire paid staff. Not-for-profit means no shareholders earn dividends. Employees can still be paid salaries. If the Red Cross and Harvard University don’t need the profit motive to achieve the success they do, toothbrush manufacturers shouldn’t need it either.
It will take some work to sort out the details of how for-profit companies could be transformed into not-for-profit companies. However, I don’t foresee any insurmountable hurdles. I will address some issues of not-for-profit businesses in the book I am writing.
There are two reasons why I want to make all businesses not-for-profit. First, if there isn’t a good reason why businesses need to have owners earning a profit, we are better off with not-for-profit businesses. The profits are simply an extra cost that makes the things we buy more expensive. Second, it makes the story of how I intend to control inflation easier to tell. While I could adapt my approach to a world with for-profit businesses, I’m not going to because I like the idea of not-for-profit businesses.
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