Microcapitalism

A recurring issue in any economic discussion is that of profit motive, which is always mentioned to defend capitalism from socialism or even at time distributism, if the capitalist is aggressive enough to do so.

There is a fundamental flaw in using profit motive as the sole means of motivation, or to speak of it as if it was the only form of self-interest. Certainly, on the individual level, it is not a universal equality.

To explain this further, I’ll refer to a video on studies done on motivational methods:

While the talk given above was focused more on management methods, it has application in economics as well. Don’t expect people to do things just for the money. There are many forms of self-interest that are not profit motive – after all, few people simply want money for money’s sake: they want money to accomplish something or reach a certain goal. Money only represents capital, it is not capital (or a dream, or sustainability) in itself. Adam Smith defined the free market in terms of self-interest, it was more recent economic thinking that defined profit motive as the “ultimate” purpose of a commercial enterprise. Distributism and are more true to the root of capitalism in recognizing self-interest as the primary motivator for commercial enterprise.

So the next time someone brings up profit motive in defense of capitalism, point out that the proper term is self-interest.