What's the purpose of capitalism?  What's the point?  What about wealth?  Is it's only purpose to purchase comfort, or power or influence?

What about benevolence; have you ever wondered why you feel good when you do something for someone else?  Why is doing something for others considered "good?" <!--more--> What if you used your wealth to make yourself feel well and you decided the maximum good feeling is not selfishness, but benevolence?  Maybe the purpose of wealth is to do nice things for others?

In recent years, more and more businesses have operated "to maximize shareholder return" or for the benefit of the shareholders.  But a business that exists to only provide for it's owners seems to be a pretty shallow undertaking.  If you look back 100 years to the people we value as great leaders, they used their talents, wealth, skill, and influence to make things better for others.  Abraham Lincoln, for example, is valued and remembered much more highly than many contemporaries for his contribution to society, not for what he gained for himself.

Capitalism has great advantage over every other economic system.  In a capitalistic society, such as the United States, people have freedom to choose the use of their profits.  (That freedom is somewhat constrained by things like taxes, but we'll withhold that topic for another post.)  In a capitalistic economy, we can use profits many ways; one of which is to generate further profit. However if that profit becomes an end in itself, that seems like a short story. Take the money and run.

Profit reinvested creates further profit.  Many companies reinvest in customers; customer acquisition, profitability and retention.  Profit reinvested in customers does not necessarily guaranteed a return to the business.  How many companies do you know that went out of business with satisfied customers?  And reinvestment in fixed assets is fleeting also.  How many companies invested in buying other companies only to watch the stock market revalue itself in the second half of 2008?

Only when the shareholders invest profits in the lives of the employees or associates, who in turn spend their lives in the service of the company, that profit multiplies many times. Employees and associates care for customers and fixed assets.  Their productivity creates the value that becomes profit to the shareholders.

Therefore I believe the employer that truly operates for the benefit of its employees and associates creates a meaningful experience of work and thereby creates a competitive advantage.

Do you agree? Can a company succeed caring for employees and associates ahead of customers and shareholders?