Is it morally acceptable to make a profit? Is the main purpose of a business to make profit?
There is no question that profits are morally acceptable.
“The Church acknowledges the legitimate role of profit as an indication that a business is functioning well.” — John Paul II, Centesimus Annus, 35
“Profits are necessary. … They make possible the investments that ensure the future of a business and they guarantee employment.” — Catechism of the Catholic Church, 2432
However, profit should not be seen as the only goal of a business.
“... the purpose of a business firm is not simply to make a profit, but is to be found in its very existence as a community of persons who in various ways are endeavoring to satisfy their basic needs, and who form a particular group at the service of the whole of society.” — John Paul II, Centesimus Annus, 35
Still less should it be seen as the highest goal of a business, where everything else is subordinated to profitability.
“A theory that makes profit the exclusive norm and ultimate end of economic activity is morally unacceptable.” — Catechism of the Catholic Church, 2424
“Profit is useful if it serves as a means towards an end that provides a sense both of how to produce it and how to make good use of it. Once profit becomes the exclusive goal, if it is produced by improper means and without the common good as its ultimate end, it risks destroying wealth and creating poverty.” — Benedict XVI, Caritas in Veritate, 21
“Christians charged with responsibility in the business world are challenged to combine the legitimate pursuit of profit with a deeper concern for the spread of solidarity … ” — John Paul II, Message to the participants in the conference on “The Business Executive: Social Responsibility and Globalization” (March 3, 2004)
Do we have a moral obligation to protect the capital that is entrusted to us as investment in our business?
Clearly yes. No one is served if the bottom line is ignored, leading to the business going bankrupt.
“Man, to whom, in Genesis, God entrusted the earth, has the duty to make all the earth’s goods fruitful, committing himself to use them to satisfy the multiple needs of each member of the human family. One of the recurring metaphors of the Gospel is, in effect, exactly that of the steward. With the heart of a faithful administrator man must, therefore, administer the resources entrusted to him by God, putting them at the disposition of all.” — Benedict XVI, Address to the members of the “Centesimus Annus — Pro Pontifice” Foundation (May 31, 2008)
It is important to avoid a situation where “… directors of business companies, forgetful of their trust, betray the rights of those whose savings they have undertaken to administer.” — Pius XI, Quadragesimo Anno, 132
What should we do if we face a choice between immoral activity and allowing a significant loss to the capital that was entrusted to us?
While managers have a moral responsibility to put forward their best efforts, they are never justified in doing evil in order to keep the company solvent. A central moral principle from the Catechism of the Catholic Church is that “one may never do evil so that good may result from it” (1789).
How much of our own personal profits should we be willing to sacrifice in order to avoid or reduce layoffs during an economic downturn?
This is a very difficult question, requiring conscientious discernment by those involved. In such situations, the Church counsels us to consider carefully what we truly need, with the virtue of temperance in mind; understand honestly what is due in justice to the employees at risk; and determine what course of action would be most consistent with the principle of solidarity.
“No one, certainly, is obliged to assist others out of what is required for his own necessary use or for that of his family, or even to give to others what he himself needs to maintain his station in life becomingly and decently. … But when the demands of necessity and propriety have been sufficiently met, it is a duty to give to the poor out of that which remains.” — Leo XIII, Rerum Novarum, 36
“ … in economic matters, respect for human dignity requires the practice of the virtue of temperance, to moderate our attachment to the goods of this world; of the virtue of justice, to preserve our neighbor’s rights and to render what is his or her due; and of solidarity, following the Golden Rule and in keeping with the generosity of the Lord, who ‘though he was rich, yet for your sake ... became poor, so that by his poverty you might become rich’ (2 Corinthians 8:9)” — Catechism of the Catholic Church, 2407
Editor’s note: This article originally appeared in Legatus Magazine. © Legatus. Reprinted with permission.
Andrew Abela is the chairman
of the Department of
Business and Economics at
The Catholic University of America.