Posted on May 8, 2022
The twenty-fourth installment of our “What Liberalism Isn’t” series.
Liberalism is the philosophy of law, which defends the ideas of freedom and responsibility, in the service of the development of individuals. If the economy occupies an important place there and if the entrepreneurial spirit is welcomed there, its fundamental dimensions are in improving the framework within which individuals can realize their potential.
If we consider the famous Maslow’s pyramid, then we can somehow think that they are part of the elements of the first levels of the pyramid, necessary for the achievement of higher levels, up to the realization of the self, which presents a truth. meaning to his life.
Under these conditions, it makes no sense to believe or imagine that liberalism will descend into the realm of economics and business and be absorbed into the obsession with the search for profit. This is at best a figment of the imagination, at worst a white lie.
To paraphrase Alexis de Tocqueville’s sentence, in democracy in americaWe can say (and regretfully) the following:
A false but clear and accurate idea will always have more power in the world than a real but complex idea.
Profit is a basic necessity of the company
They are the fundamentals of the basic functioning of an economy, at least of the capitalist type. Who would be crazy enough to take on or create goods or services intended to sell to customers, while agreeing to lose money?
Rather than demonizing profit or invoking it with contempt, can we imagine creating a company that is close to our hearts? What should? Time, emotion, desire to create (including jobs), to imagine, to satisfy the needs of interested people, to be fulfilled. But also capital (personal money saved, or borrowed from friends, family, banking institution, trusted investors whoever they are).
Liberalism here is the framework that allows room for individual initiative, the freedom of the ability to do, the ability to create, and to contribute to the well-being of those for whom this creation will be useful, to satisfy one of their needs. .
Of course I will be told that the capitalist system does not exist alone. But then, are you ready to accept – or accept as many people as possible, and without violence please – a tribal-type economy (which is unrealistic with over 7 billion people on Earth), communist (their various experiences do not seem to be very conclusive , to say the least), or looting? Because, as the economist Walter E. Williams, citing the Foundation for Economic Education (FEE), author of an interesting article titled ” How Profit Created Prosperity Today »:
Before capitalism, people accumulated vast fortunes by plundering and enslaving their fellow human beings. With the rise of capitalism, it became possible to amass great wealth by serving and pleasing others.
Because that is the meaning of it all. The pursuit of profit for the sake of profit is not the most popular idea. Wanting to find something fundamentally only evil is a vision of the minds of the frustrated, jealous or pessimistic who see misfortune everywhere. On the contrary, it is an essential means of releasing the creative potential that should gradually benefit the greatest number (even if disaffected minds will always be able to find occasional examples intended to prove the opposite). The FEE article also shows how today’s boom (even if it unfortunately obviously doesn’t affect everyone or isn’t fast enough) is the fruit of what yesterday’s profits made possible.
What profit is allowed
Indeed, it is often fashionable – and the mainstream media regularly plays an unfortunate role in this – to denounce the profits of big corporations as if they were a real scandal. Ignore everything that these big companies (which are not the only ones of course, and which also allow many other smaller companies to survive and are sources of employment) to the French economy, and therefore to its population (jobs, resources, enormous tax receipts, and thus finance a significant part of all Something that the state distributes so generously and in many ways to the French people who especially seek to intervene), one always gets the impression that these companies are guilty. Some even went to congratulate themselves in a completely inappropriate way on the death of one of its leaders, for some, Total was one of the usual scarecrows in this matter.
But what would happen if we punished the “sinners” by taking more, for example, from their “shameful” profits? Unless these companies are nationalized (again, it would take an entire article to show where that could lead), they will be cut off from their main source of funding. Thus, we will not be content with the weight of the future of the company or threatened with bankruptcy or encouraging to leave for other places, but the future of its employees and the resources that benefit the French state.
For it is, as useful, to remind those who know it, or introduce them to the youngest who have never heard of this very popular and correct (even if subject to criticism) formula in the 1970s of the then chancellor Helmut Schmidt:
Today’s profits are tomorrow’s investments and today’s jobs after tomorrow.
In fact, it is profits that allow investment (even if it is not completely transferred to it). An investment without which the company cannot prepare for the future, and therefore its future, starting with its simple living. Because those who hate profits seem to forget that a company, no matter its size, cannot be guaranteed to survive. However, it is clear: if what you offer is outdated, customers will turn away. Or if competitors make a better offer, they will buy from them. Thus, the company, whatever it may be, has no choice: it must necessarily invest. No profits, no investments. Or difficulties in the ability to invest, because this must be done through debt. And who will lend to a company that does not convince, whose future seems uncertain?
A necessary condition, even if not necessarily sufficient
Thus profits are a prerequisite for being able to invest under good conditions, and investment is an indispensable condition for ensuring its future. At worst, to avoid a very rapid deterioration or even disappearance, at best if everything works well (which is not at all guaranteed and again leads to misunderstanding), to provide conditions that will ensure growth, and thus the need for employment and employability (“Tomorrow’s Jobs”). And/or to ensure salary levels, consider paying bonuses and, if all goes well, increasing salaries as soon as conditions are favorable.
It will be understood that profit is only an initial and necessary condition, in the context of (healthy) competition, in order to be able to continue to fund research, invent creativity, and innovation, to enable the needs of individuals to be met. Through the spontaneous order one can envisage the achievement of the social harmony that may result from it.
Satisfying needs requires exchange. In fact, it is difficult to live in self-sufficiency. Any other idea is nothing but an illusion, or a false bias in its underpinning.
Profits, not the liberal alpha and omega
In conclusion, if profits are a sine qua non in the capitalist system and if liberalism is a suitable framework for the freedom of enterprise, and from there what makes it possible to conceive prosperity and a certain physical and material well-being, it is not. an end in itself. Liberalism has never viewed profit in this way. Its purpose of course goes much further than that.
If we return to the reference to Maslow’s hierarchy in the preamble to this article, then once the basic conditions of existence have been ascertained as far as possible, of course what is required and constitutes the ultimate aspiration (and not just specified, of course, of liberalism), these are the next three levels and in particular the last one (the realization of Self).
Which would be more achievable, a priori, in a society where liberties are defended.
- What is not liberal
- Why is liberalism not an ideology?
- Why liberalism is not “unruly”
- Why liberalism is not a defense of big capital
- Why is liberalism not a commodity for culture?
- Liberalism is neither responsible nor guilty of “social breakdown”
- Why should not liberalism be confused with materialism?
- Liberalism cannot be reduced to an economic doctrine
- Liberalism defends individuals, not elites
- Why isn’t liberalism, by its very nature, a system that excludes
- No, liberalism does not seek the public interest
- No, liberalism is not inevitable
- Why liberalism is not laissez-faire nor laissez-faire
- Why liberalism is not at all what Michel Onfray believes
- Why a large part of the French do not see liberalism well
- Why the Covid-19 disaster has nothing to do with liberalism
- No, liberalism did not die with the health crisis
- Neoliberalism, the practical scapegoat
- Why liberalism is not an abstract concept devoid of any reality
- Why should liberalism and socialism not be opposed?
- Liberalism hardly corresponds to the search for power
- Why liberalism can’t be compared to indolence
- Why does liberalism not mean austerity?