The Restricted Nature of the Profit Motive: Perspectives from Law, Business, And Economics

This essay investigates the permissible limits of the profit motive in business contexts by examining theory and cases from law, business, and economics. This essay aims to remind the reader that the theoretical principles upon which the profit motive is founded require abidance to law, ethics, and customary societal rules. Accordingly, the application of the profit motive as a purported justification for illegal or immoral business decisions does not withstand scrutiny. Part I distinguishes between restricted and unrestricted profit motives, and illustrates this distinction by the use of three business cases that improperly appeal to the unrestricted profit motive.

Part II utilizes economic theory to reveal the restricted nature of the profit motive. Part III utilizes legal cases to display the restrictions placed on the profit motive by law. Finally, Part IV suggests that the unrestricted profit motive often results from intra- and inter-organizational power imbalances and contends that curbing such imbalances will aid in the proper application of the restricted profit motive.