Profits are socially responsible

posted by
January 26, 2012
Ludwig von Mises Institute
by Doug French  
Posted in Commentary

"The idea at the root of benefit corporations is that profit should be abolished. But the results of that would be disastrous. Mises points out that if profits were given to the customers (or, in other words, if prices could not exceed costs), this maximum-price decree would paralyze markets and require goods to be rationed. For the firm's employees to receive profits, no capital could be accumulated to grow the business or innovate production functions." (01/26/12)

http://mises.org/daily/5884/Profits-Are-Socially-Responsible  
  • "The idea at the root of benefit corporations is that profit should be abolished."

    No. The idea is that profits should not be the sole arbiter in determining corporate actions. Which is in turn perfectly reasonable. All businesses have duties other than to turn a profit. They, for instance, have a duty to their employees to pay them a living wage.

    Benefits corporations are a means of protecting themselves from usurious shareholders.

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