Profit helps the jobless

If the newly reconfigured Congress is concerned about America's economic recovery one would hope that lawmakers would want to create the best possible environment for businesses to make profits. Profitable companies provide jobs. Unprofitable companies cut jobs. If lawmakers and the Obama administration continue the Bismarckian approach of taxing businesses and wealthy citizens to pay for government-created projects and services it will interfere with entrepreneurs' ability to create jobs. When people are able to meet their needs in solidarity with others through employment there is less need for government to confuse itself as a beneficent institution and properly view itself as an institution providing a just context, established by the rule of law and property rights, to support the flourishing of economic, social, and moral spheres.

Both Protestants and Roman Catholics understand the social good that profit plays in helping the social needs of the people. In the book Business for the Glory of God, Wayne Grudem explained that profit is "fundamentally good and provides many opportunities for glorifying God." Profit is an indication of good stewardship. "Profit," wrote Grudem, is "an indication that I have something useful for others, and in that way it can show that I am doing good for others in the goods and services that I sell." Pope John Paul II, in the encyclical Centesimus Annus, reminded us that "the Church acknowledges the legitimate role of profit as an indication that a business is functioning well. When a firm makes a profit, this means that productive factors have been properly employed and corresponding human needs have been duly satisfied." In other words, profit demonstrates that needs are being met.

But acknowledging the potential of profit does not mean that all profit is good. Although Christianity teaches that there is nothing necessarily nefarious about making a profit or wanting to make a profit, the presence of sin, Grudem cautioned, can introduce a number of temptations like cheating, taking advantage of people, and attempting to create monopolies. Pope John Paul II also warned us that "profitability is not the only indicator of a firm's condition. It is possible for the financial accounts to be in order, and yet for the people-who make up the firm's most valuable asset-to be humiliated and their dignity offended." Market activity can tempt greed in such a way that it can undermine the virtuous possibilities of the market as well as undermine human dignity through poor work conditions or by bringing immoral products and services into the marketplace to meet the demands of people with disordered passions. Profit is best used, then, when directed by virtue.

Profit can give companies the correct incentives to take risks and provide sustainable employment so that men and women can obtain what is needed to survive in life, which comes only by earning a paycheck. Changing those incentives through random Bismarckian taxation schemes discourages risk and decreases profitability. The most long-term, sustainable way to help those who are jobless is not by redistributing other people's earnings but by distributing the freedom for entrepreneurs to virtuously make a profit with products that serve the common good and create jobs.