Profit Maximization: How It Works
This statement is partially right in its assumption that a business can satisfy society by satisfying its representatives in the form of the company’s clients. The more clients the company serves with goods of the highest quality, the more positive changes it makes to society as a whole as the level of happiness rises proportionately. Supposedly, if private companies in different spheres concentrate on satisfying their customers, society will benefit through an increase in the number of satisfied people. However, there is a limitation to that paradigm. In the aspiration to increase its profit in circumstances where demand is rising slowly, the companies that produce goods or services can rarely dramatically change the number of individuals that they can satisfy. For instance, Lamborghini makes luxury cars and cannot produce significantly more cars to satisfy more customers, because there is a limited number of customers who are able to afford their products. Therefore, the social impact of such companies is small.
Moreover, Lamborghini focuses on a population that does not need support. The main implication of this statement lies in the assumption that each person, institution, or business has to perform the task for which it is best suited. From that perspective, I totally agree with the author. A society can be viewed as a mechanism where each part and every gear has its own function. When the mechanism starts performing poorly and fails to fulfill its function due to some gears being broken, other gears cannot take their place because they are not designed to take their place. Only the higher power that sees the flaw from a different perspective can locate and address the flaw. Just as a worker changes broken gears in a mechanism, the government passes new laws, making changes in society’s structure in order for each person to be happy. An example of such an approach is fighting polio in Sweden.
According to Astrid Fagraeus and Margaret Böttiger, in 1957-58 the Swedish government managed to vaccinate nearly 100 % of its young citizens against polio, thus bringing the mortality rate to zero. In comparison, Bill and Melinda Gates donated around two billion dollars over six years to the same cause globally, but polio still rages across 20 countries. This does not diminish the noble effort of the Microsoft founder and his wife but merely suggests that a concentrated effort that is multiplied by using the right administrative tools seems to give the best result.
Governments fulfill their duty to provide society with the tools necessary for creating happiness by making sure that its institutions work properly. According to the statement, companies must do the same by ensuring they deliver the best products to their customers. For the reasons stated above, swapping roles does not seem like such a good solution.