Market Economics is not all about profit
(Introduction to Economics, Lesson 11)
Profits play an important role in a market economy. It is often said that businesses exist in order to make a profit. They sell things for money and some of that money is used to cover their costs — buy materials, pay workers, pay rent etc. What they have left is their profits — which, in one way or another, get distributed to the people who own the business.
Profit is supposed to be a reward for when businesses do a good job of providing consumers with what they want (although, unfortunately, profits are often made through less sanitary methods!). For ordinary workers, their wages might be thought of as their profits from the work that they do.
The thirst for profits and the ongoing quest for ever-higher profits (or earnings) are often presented as being the key driving forces behind our economies — but real life isn’t that simple! In real life, people run businesses for many different reasons — it isn’t all about making a profit. People go to work for many different reasons — it isn’t all about earning money to pay for things they want.
People’s motivations are many and varied. A lot of work-related and business-related activity, for example, is actually something to do with people’s psychological or social needs. They want to feel useful, they want to feel valued and they may want to meet and make friends with other people.
Profit-seeking is an important motivation in market economies, but it is only one of many motivations — and a good economist should take care to remember this.