In most businesses, the profit motive
is King. Profit is the amount of money
a business retains for itself after costs, taxes
have been removed from revenues
. Businesses try to maximise their profits, and workers try to maximise their share of the profits as well.
Businesses tend to plough retained profit back into the company in the form of expansion, or save it for a rainy day.
The profit motive is oft-criticized by capitalism's critics. Yet defenders of capitalism would argue that it is the profit motive that has led to the general increase in the standard of living since capitalism became the dominant force in society.
It has been said that the profit-motive causes businesses to think in the short-term - that they look for profits now in spite of what will happen tomorrow, with disastrous consequences for a work force or the environment. Thankfully, this tends not to be the case - a sensible business will always plan way ahead into its future, and any that does not will soon destroy itself when its luck runs out.
Other criticisms of the profit motive describe capitalists as greedy and selfish - they charge high prices for products, it is said, in their own self-interest. But defenders of capitalism would say that it is exactly this self-interest which leads to them striving in said to increase their efficiency rather than their prices - in this way they won't experience the reduction in demand that a rise in price would entail. In the history of American free enterprise, it has been a truism that in a competition between two companies, it is the most efficient that wins. Increasing efficiency leads to higher profits than increasing price.
The profit motive is something used on both sides of the argument about privatising "public services" such as education, health care, and so on. Statists claim that the profit motive will cause companies to cut corners in providing their services leading to useless education and dead patients. Proponents of privatisation say that the profit motive will lead to an excellent standard of service because competition will be at play - and in a competition, the most efficient company with the best product wins. It is in, say, a medical company's interest to provide its patients with an excellent standard of service - otherwise it will soon find itself out of business.
The profit motive underlies much of our culture and society. Whether you like or hate it really depends on your point of view.