Profit vs. Purpose: Which Drives Better Behaviour?
When we look at what drives human behaviour in today’s modern society, particularly in developed capitalist countries, we notice that few forces are as powerful as the hope for profit. Often decentralized, modern societies are largely shaped by economic decisions made by private enterprises, whose main motivation is profit: for instance, the U.S Bureau of Economic Analysis reports that the private sector accounts for around 70% of the U.S. GDP as of 2025[i], truly highlighting its dominance in the economy. Consequently, due to the profit-driven dynamics of this private economy, enterprises are constantly striving to remain economically viable, or, in other words, profitable. Considering this, it appears that the belief that one’s effort eventually pays off in material gains operates on the same level as one’s need to survive.
Fig 1: Share of U.S. GDP Attributed to the Private Sector[ii]
Since the Industrial Revolution (circa 1760-1840), there is no doubt that this desire for financial gain has deeply impacted our daily lives. Often linked to improved living standards, it has increasingly dominated our routines and priorities. For instance, U.S corporate earnings have doubled since 2010 as reported by the Federal Reserve Bank of St. Louis.[iii]
However, while it has proven to be an engine for society, constantly striving towards profit has its constraints: inequality, environmental degradation, or poor labour conditions, the downsides are omnipresent. But is this behaviour ultimately better or worse than the one we would see if enterprises were instead run by charities or governments? Both have profoundly shaped our history, from the USSR to the USA of the 1920s, yet this central question persists.
On the one hand, the quest for profit lies at the core of major historical ventures: from groundbreaking technologies, such as the steam engine, to engineering feats, like the Panama Canal. But why is that so? Many argue that the hope for profit fuels the need for growth and global outreach[iv], and when we look at history, this is undeniably true. One need only at England, which once chartered a profit-seeking monopoly: the English East India Company. The Company began with the funding of wealthy merchants in the spice trade but soon expanded into fabrics, tea, and more. The motivation behind this almost aggressive expansion was the pursuit of the enormous value it could generate. Not only did it build factories, but it also wielded its own sovereign power, which was inevitably rooted in one driving force: the hope for profit.
Moreover, this desire for growth has evolved over time as new fields have emerged. A clear modern example is mergers and acquisitions in finance, where the pursuit of profit acts like a beating heart. In today’s corporate culture, expansion through mergers and acquisitions is not just common but often expected. For instance, the value of global M&A deals worldwide totalled 3.4 trillion U.S. dollars [v]in 2024, which exceeded the GDP of 189 countries[vi], truly underlining the scale of the behaviours generated by profit-seeking motivations.
In addition to institutions, the hope for profit or self-interest is also the driving force of the individual, which remains the central agent in most modern-day economic systems. For many, it serves as a catalyst for professional and academic growth. For instance, many invest in additional years of schooling in hope of securing higher-ranking positions that promise greater financial rewards: from bachelor’s to masters, dual degree programs to graduate programs, the list is endless. According to a 2024 survey by Inside Higher Ed[vii], 50% of college students cited higher income as their primary motivation.
Indeed, there is a significant difference in weekly earnings between individuals with a high school diploma and those with a bachelor’s degree.
Fig 2: Median usual weekly earnings of workers by educational attainment[viii]
These statistics truly highlight the financial benefits associated with advanced degrees, which are the direct equivalent of growth in an academic context. After all, profit is not a motivation reserved solely for firms and companies: individuals are equally driven by similar incentives.
On the other hand, when examining behaviours in both consumers and producers driven by the hope for profit, which may seem positive at first glance, we must equally consider the negative aspects. So, how can this persistent hope for profit lead to harmful behaviours?
To introduce the downsides, I would like you to imagine a quick scenario in an imaginary world where the pursuit of profit drives every action. Picture yourself visiting a doctor for a headache, but instead of prescribing just a basic painkiller, they give three different supplements and an additional pathology test, simply because they profit more. While this scenario may sound extreme, it reflects the reality in certain parts of our society where the hope for profit strongly influences decisions.
Firms who consistently prioritize maximizing growth and efficiency are often renowned for ignoring fundamental pillars such as labour conditions and safety measures in order to minimize costs. This troubling dynamic is eloquently explored by Canadian law professor and legal theorist Joe Bakan in his book “The Corporation: the Pathological Pursuit of Profit and Power[ix]” where he describes firms as entities driven by an almost demented compulsion, stating “the corporation, like a psychopathic compulsion it resembles, is programmed to exploit others for profit.” This striking analogy captures the abuse of profit, often at the expense of human rights and the environment.
Take Nike[x], for example: this beloved sportswear giant has faced longstanding allegations of using sweatshops: these low-cost factories, predominantly located in East Asia, where workers are employed for minimal wages during long hours under dreadful conditions, with their monthly salary matching the price of one pair of shoes[xi].
This is where non-profit organizations and government intervention come into play. For instance, the Workers Rights Consortium [xii]emerged in 2001 in response to multinational corporations’ neglect of fundamental human principles. Ultimately, nonprofits’ role is to prioritize social goals over profits, indirectly challenging for-profits agressive practices.
Furthermore, it is important to recognise that, on an individual level, human behaviours do not naturally revolve around self-interest: at our core, we are social creatures, grounded in sympathy and emotion, as discussed by sentimentalist David Hume[xiii]. People seek meaning and connection, which are often fulfilled thorugh non-profit motives, such as simple acts of solidarity.
When it comes to institutions driven by nonprofit dynamics, the government is the most recognized. While not endowed with absolute control over today’s society, it still heavily influences social behaviour through various channels. One of the most well-known is economic regulation, which many perceive as burdensome: for instance, it is often associated with inefficiency, as it is viewed as unfriendly to business. The World Bank’s Business Ready report[xiv] shows that countries with high regulatory burdens, such as Venezuela[xv], tend to have slower GDP growth.
However, historical events highlight its essential role in maintaining social welfare and mitigating the adverse effects of profit-driven motives. For instance, one can look at the Swill Milk Scandal[xvi], a major food scandal in 19th century New York. It involved the sale of milk produced by cows fed on waste products containing brewery byproducts and other impurities. This practice aimed to cut costs and maximize profits but ultimately led to the sale of contaminated milk and a high infant mortality rate, with nearly 8,000 infant deaths [xvii]every year. In response, the New York State legislature enacted laws in 1862 that prohibited the sale of this contaminated milk, marking the beginning of food safety regulation.
Moreover, economists and Nobel Prize winners Joseph Stiglitz[xviii]and Paul Krugman [xix]have imagined a world without intervention, where society functions entirely without regulations, shaped by the hope for profit and its behaviours. Stigliz highlights the problem of information asymmetries in free markets, where, for instance, one party, such as buyers, may lack critical information about a product’s quality or risks, which eventually leads to market failures. In this case, government intervention plays a crucial role in ensuring transparency and fairness to prevent the imbalances that might otherwise persist in such unregulated markets. Krugman, on the other hand, emphasizes the inherent instability of markets left to their own devices, showing how the absence of safeguards often leads to severe recessions, rising unemployment, and widespread economic hardship.
While many view them as hindrances to economic prosperity, government intervention and non-profit organization undoubtedly represent these correctors and safeguards, which ensure that humanity is not harmed in the pursuit of wealth driven by the hope for profit. But would it not be somewhat inaccurate to imagine that a society dominated by both charities and governments would evolve and prosper at the same pace as today’s society, which is so heavily dominated by the hope for profit?
The former USSR offers valuable insight into how a nation may function when governed entirely by the state, with the notion of profit being non-existent and even prohibited. In such a centrally planned economy [xx], there were no private property rights, no individual economic freedoms, and little room for innovation. The government controlled nearly all means of production, aiming for societal welfare and stability over growth and competition. While this approach initially ensured certain social guarantees, it ultimately stifled creativity, and economic dynamism. Without the motivating force of profit, enterprises lacked incentives to improve products or services, leading to widespread shortages, inefficiencies, and most importantly economic stagnation. Furthermore, overtime, the natural human drive for competition and the underlying hope for profit could not be suppressed. This growing pressure contributed to the collapse of the Soviet system, as citizens sought reforms that reintroduced market mechanisms. The USSR’s failure highlights how the hope for profit acts as a vital engine for societal progress, even in societies that try to limit it.
When we consider the behaviors driven by the hope of profit and compare them to those that arise when all enterprises are owned by governments or non-profit organizations, we quickly realize that neither extreme offers a perfect solution. Profit incentives can encourage innovation, efficiency, and economic growth, but they can also lead to excesses, exploitation, and inequality if left unchecked. On the other hand, enterprises owned solely by charities or governments often prioritize social goals and public welfare but may lack the dynamism and responsiveness that market competition fosters.
The truth is not about choosing one extreme or the other; rather, it lies in striking a balance. This is where the concept of the social market economy comes into play: a system that blends the strengths of a free market with thoughtful government regulation and social protections. In this system, the market plays a central role; however, it is not free in terms of decision-making, as the government comes in to correct any excesses and exploitation. This promotes the principles of competition and profit maximization while still mitigating the downsides and ensuring the welfare of society. In today’s modern society, many nations have adopted this structure which has proven profoundly beneficial. For instance, it has given rise to minimal wages, which prevents labour exploitation, while also permitting a certain level of freedom, given the existence of market wages, which vary depending on the employer.
Switzerland provides a compelling example of this balance in action. It boasts one of the highest Human Development Index (HDI)[xxi] scores globally:a measure that reflects not just economic wealth but also health, education, and overall well-being. Swiss constitutional principles emphasize both economic freedom and the promotion of moral values and human rights. This combination fosters an environment where innovation and prosperity can thrive alongside social responsibility. For instance, in Switzerland, health insurance is mandatory, but individuals choose from private insurers in a competitive market[xxii]. In addition, one can also look at the country’s semi-direct democracy, which allows the private sector to vote on specific issues through its agents, therefore enabling collaboration between for-profit entreprises and non-profit organizations.
Ultimately, the best path forward is the one that harmonizes economic incentives with ethical governance where neither profit nor regulation dominates, but both work together to serve the greater good of society.
ENDNOTE
[i] Federal Reserve Bank of St. Louis. (2025). Value Added by Industry: Private Services-Producing Industries as a Percentage of GDP. https://fred.stlouisfed.org/series/VAPGDPSPI#
[ii] https://fred.stlouisfed.org/series/VAPGDPSPI
[iii] Erik Sherman (2025), Why Corporate Profits Have Rocketed Upward Since The Covid-19 Pandemic
[iv] Julian Kagan (2024). Profite Motive: Definition, Economic Theory, and Characteristics https://www.investopedia.com/terms/p/profit-motive.asp
[v] McKinsey & Company (2025). M&A Annual Report: Is the wave finally arriving https://www.mckinsey.com/capabilities/m-and-a/our-insights/top-m-and-a-trends
[vi] Worldometer (2024). GDP by Country. https://www.worldometers.info/gdp/gdp-by-country/
[vii] Inside Higher Ed (2024). Survey: Why Students Enroll and Why They Persist https://www.insidehighered.com/news/student-success/academic-life/2024/02/23/student-survey-gauges-importance-college-degree
[viii] https://www.bls.gov/charts/usual-weekly-earnings/usual-weekly-earnings-over-time-by-education.htm
[ix] https://www.simonandschuster.com/books/The-Corporation/Joel-Bakan/9780743247467
[x] Yale University (2005). Nike Lists Abuses at Asian Factories https://www.simonandschuster.com/books/The-Corporation/Joel-Bakan/9780743247467
[xi] The World Counts. Sweatshops Facts https://www.theworldcounts.com/challenges/consumption/clothing/sweatshop-facts
[xii] https://www.workersrights.org/
[xiii] David Hume (1777). An Enquiry Concerning the Principles of Morals https://mlpp.pressbooks.pub/introphil/chapter/hume-on-sentiment-2/
[xiv] https://www.worldbank.org/en/businessready
[xv] Index of Economic Freedom-Venezuela (2025) https://www.heritage.org/index/pages/country-pages/venezuela#:~:text=Venezuela’s%20overall%20regulatory%20environment%20is,well%20below%20the%20world%20average.
[xvi] Atlas Obscura (2017). The 19th-Century Swill Milk Scandal That Poisoned Infants With Whiskey Runoff https://www.atlasobscura.com/articles/swill-milk-scandal-new-york-city
[xvii] Dianne L. Durante. Central Park’s Dairy and the Swill Milk Scandal https://diannedurantewriter.com/swill-milk-scandal-central-park
[xviii] Sean Ross (2024) Theory of Asymmetric Information Definition & Challenges
https://www.investopedia.com/ask/answers/042415/what-theory-asymmetric-information-economics.asp
[xix] Krugman’s Introduction to Keynes’ General Theory https://www.investopedia.com/ask/answers/042415/what-theory-asymmetric-information-economics.asp
[xx]The Investopedia Team(2024). Centrally planned Economy: Features, Pros & Cons, and Examples
https://www.investopedia.com/terms/c/centrally-planned-economy.asp
[xxi] World population review (2025). Human Development Index (HDI) by Country 2025 https://worldpopulationreview.com/country-rankings/hdi-by-country
[xxii] SVAZürich. Compulsory Health Insurance
John Locke essay question 2025 (economics): What kinds of behaviour are engendered by the hope of profit? Is such behaviour better or worse, on balance, than the behaviour we should expect if all enterprises were owned by charities or governments?
