Why is profit not enough?

A couple of recent news reports and a company email have got me pondering about profit. It seems to be a modern culture that making a profit is simply not good enough. The margin of profit must grow, year upon year. The reason frequently expressed is that unless the profit keeps going up, the shareholders will get restless and find other avenues for their money. The question this raises for me is, “why do we need shareholders?”.

No doubt my view is incredibly simplistic and completely naive but it does seem that the majority of us spend our lives working for companies that are owned by an anonymous fluffy cloud of shareholders who never express any gratitude for our efforts. If the employees owned the company themselves then life would be much nicer: Everyone would get paid their salary just the same and if the company made a profit then that would be really nice and perhaps salaries could consequently go up a little next year. We could dispense with the panic that surrounds financial year ends because employees wouldn’t care if the company was enormously profitable or merely profitable. The fact it employs them, pays their salaries and keeps them off the dole queue would be sufficient reason for the company’s continued existence.

Like I said, all nice and simple. If only life worked that way.

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