Towards metaprofit: gratuitousness and profit in business management.

Serie: Journal of the Observatory/12
Publisher: Cantagalli
Pages: 180
Price: €12,00

Dialogue between economy and the Social Doctrine of the Church becomes increasingly intense in times of crisis: the challenges of contemporary economy, which seems unable to absorb its own failures, increase in numbers in the quest for new solutions.

This book seeks to offer a new outlook on the problem of business management on the basis of the fact that corporate expression is multiform in nature, and that human economic activity is not always fuelled by utilitarian aims. Beginning from the need for whatever is ‘economic’ to preserve its nature of pursuing a rational solution to human requirements, reasserted is the essential social function of corporate activity.

The basic question, therefore, comes down to the space of gratuitousness within the ambit of economic activity: is the rationale of ‘gift’ always ‘non economic’, or can it have a role to play in an enterprise? Can the creation of value always be circumscribed within rigidly economic schemes, or does it tend beyond them to much broader horizons?

The ‘metaprofit’ perspective seems to be opening up towards a broad and sweeping panorama, where flourishing alongside typical forms of business endeavor are new types of enterprises prone to conjugate the economic dimension explicitly with the social, cultural and environmental dimensions, etc.  All this moving from the economic rationale of gift: trade and exchange are not always driven by utilitarianism, but often stem from broader and deeper human relations, wherein the concept of gratuitousness is by no means alien. In fact, it is impossible to postulate any human activity – and likewise economic ones – if left out of the picture is gratuitousness as a fundamental anthropological category.

Beginning from a rigorous economic-business methodological approach and an attentive analysis of the Magisterium of the Church, this book’s authors analyze a series of company theories, discovering some of their limitations, and project the way forward towards a renewed ‘metaprofit’ theory of business, which goes beyond mere profit-taking rationale as the end-all and be-all of corporate activity.

This is the basic reason why the book comes to an end with a new openness in ethical terms. In fact, it would seem that economic rationale does not always suffice unto itself, but needs  brightened ethical hues.

 

Towards meta-profit: an interview with the authors

 

Q – “Towards Metaprofit”: could you tell us something about the origin of this category, which seems like something new in the economic world?

A – By using the term ‘metaprofit’ we decided to travel a new yet old road. In fact, we wanted to highlight how profit – albeit a legitimate human goal – is not the sole driver of economic activity.  We therefore considered the prefix ‘meta’ in an entomological sense as “through” and “beyond” in order to underscore how profit is a tool, an instrument, and not the self standing end or aim of economic endeavour.

Q – Which sources inspired your idea?

A – We drew simultaneously from two sources: on one hand, international business economy literature, which revealed a certain degree of attention brought to bear over the last few decades on issues regarding corporate social responsibility, albeit not always in ways readily acceptable, and, on the other hand, the Social Doctrine of the Church. In particular, input of major innovation can be found in Benedict XVI’s latest encyclical letter, which proposes the plurality of forms of business enterprises as an innovative solution for economic development.

Q – In what sense does business economic literature tackle ethical issues in ways not always readily acceptable?

A – The study of corporate phenomena in no way eludes the spirit of our times. The approach to economic activity, also in ethical terms, is resolved from an individualistic point of view. We made an effort to highlight the limits of this approach, which eliminates the social element of an enterprise and degrades the phenomenon to unacceptable reductionism.

Q – Therefore, in the wake of Benedict XVI. . .

A – Certainly: we made an effort to highlight in business terms how the return to a community vision of economic activity, where there is a flourishing of multiform experiences alongside entrepreneurial endeavors as such, can become a fundamental innovation for study and business management. Reducing human activity within the all too narrow confines of utilitarianism – perhaps cloaking that in ethical terms – is an open slight to man himself and a serious scientific error.

Q – Is what you have in mind a slightly less ‘corporate’ corporation?

A – No, this is not something at the core of our line of reasoning: when an enterprise does its job properly it is already ‘social’ in an undeniable manner because it creates value and spreads it all around itself. Nonetheless, there are so many realities – cooperatives, foundations, etc. – that are becoming more and more fundamental for social and economic development, and where the economic rationale is tempered and driven by other aims. The rediscovery of new dimensions of corporate value exalt the economic element and in no way deny it.

Q – At the end of the book you propose  “ethical openness”: what do you mean by that?

A –Every science and all scientific argumentation have their hypotheses and confines. Business related disciplines are in a position to offer a great service with a view to developing  thinking and instruments useful for fostering the creation of economic value, as well as social, cultural and environmental value, etc. Nonetheless, they come face to face with a limitation, because theirs is a form of special knowledge from a certain point of view. For other horizons, however, it is necessary to draw on another form of scientific language, and that is ethical language. And constructive confrontation in these terms is of benefit to both economics and ethics.

Q – Why?

A – Because ‘economy’ needs ‘ethics’ in order to bring man (and God) back to the center of any and all public discourse. Then again, ‘ethics’ needs ‘economy’ in order to set objectives ‘incarnated’ in daily life for itself.

Q – One last question: what conditions need to be met in order to this ‘metaprofit’ to become reality?

A – First of all, ours is not a ‘dream’. It is a line of reasoning triggered by a reading of reality, just as in Caritas in Veritate Benedict XVI presents not an exhortation, but observations regarding the plurality of forms of enterprises. Manifold are the conditions for development  in both cultural – inside and outside company organization – and management terms: consider, for example, the recovery of knowledge as a value generating fact, or what is known as the ‘systems’ approach as a basic feature of company strategy with a view to surmounting a short term profit-for-the-sake-of-profit approach.

 

PREFACE

IN THE FURROW OF “CARITAS IN VERITATE”

 

This book ventures into the field of ‘metaprofit’, a field still new in many ways. New, as far as I know, in the name itself. In order to understand the meaning of this research endeavour it is necessary to return to an excerpt of “Caritas in Veritate” by Benedict XVI. As we know, this encyclical tackles numerous emerging issues, and among them the progressive erosion of the confines between profit and non profit (or not for profit, as some people prefer) on the part of new economic-entrepreneurial activities. Here is the excerpt in question: “When we consider the issues involved in the relationship between business and ethics, as well as the evolution currently taking place in methods of production, it would appear that the traditionally valid distinction between profit-based companies and non-profit organizations can no longer do full justice to reality, or offer practical direction for the future. In recent decades a broad intermediate area has emerged between the two types of enterprise. It is made up of traditional companies which nonetheless subscribe to social aid agreements in support of underdeveloped countries, charitable foundations associated with individual companies, groups of companies oriented towards social welfare, and the diversified world of the so-called “civil economy” and the “economy of communion”. This is not merely a matter of a “third sector”, but of a broad new composite reality embracing the private and public spheres, one which does not exclude profit, but instead considers it a means for achieving human and social ends. Whether such companies distribute dividends or not, whether their juridical structure corresponds to one or other of the established forms, becomes secondary in relation to their willingness to view profit as a means of achieving the goal of a more humane market and society. It is to be hoped that these new kinds of enterprise will succeed in finding a suitable juridical and fiscal structure in every country. Without prejudice to the importance and the economic and social benefits of the more traditional forms of business, they steer the system towards a clearer and more complete assumption of duties on the part of economic subjects. And not only that. The very plurality of institutional forms of business gives rise to a market which is not only more civilized but also more competitive” (n. 46).

Benedict XVI observes the emergence of many business enterprises in the world of economic endeavor that brim over the borders of both profit and non profit. It is not a matter of economic and entrepreneurial endeavors located along a sort of border line where profit and non profit overlap and blend together with one another, but rather new realities impossible to situate in the two aforementioned categories, and not even a blend of various degrees thereof. After noting the birth of this new economic world and offering a few examples, the Holy Father calls upon scholars and experts to investigate this phenomenon on order to provide politicians and lawmakers with instruments able to help them regulate it in legal and fiscal terms.

Note well how Benedict XVI explicitly asserts that this is not a matter of a ‘third sector’, thereby seeking to surmount in definitive terms the ‘residual’ conception of non profit, and most likely as well the triangular synergy among market, civil society and state projected by John Paul II in “Centesimus Annus”. In that encyclical John Paul II had spoken about “the society of free work, enterprise and participation”, which “is not opposed to the market, but asks to be suitably controlled by the social forces and the state”. Metaprofit, therefore, is not the ‘third sector’ alone, and the juxtaposition of the three dimensions fails to take reality into consideration.

Benedict XVI’s proposal is rooted in the general structure of “Caritas in Veritate”, which, as I made an effort to demonstrate in an Introduction to it[1], consists in the proposal of the priority of ‘gift’ – the act of receiving – over what we produce ourselves. In the mind of the Holy Father, ‘gift’ belongs to economic activity by statute and not by concession.

Written by two young professors of business economy, this book explores the reaches of the ‘metaprofit’ indicated by Benedict XVI and accepts the pope’s call to deepen knowledge of it. Coined within the ambit of the International Observatory Cardinal Van Thuân on the Social Doctrine of the Church, the word ‘metaprofit’ is more than suitably expressive of this new reality and this new commitment. In fact, the prefix ‘meta’ means ‘beyond’ as well as ‘through’. It indicates that profit must tend to something which stands beyond it and with respect to which it serves a functional purpose. This is a new application of the deep lying conviction of the Social Doctrine of the Church that the pursuit of the transcendent also permits the attainment of immanent results.

This is an expression of our Observatory’s research activity in dual fidelity to the Social Doctrine of the Church and the truth of disciplines from a viewpoint of ordered interdisciplinary relations[2].

 

Most Rev. Giampaolo Crepaldi

Archbishop-bishop of  Trieste

President of the Observatory Cardinal Van Thuân

 

[1] G. Crepaldi, Introduzione a Benedetto XVI, Lettera enciclica “Caritas in veritate”, Cantagalli, Siena 2009, especially pages 19-24: “Il ricever precede il fare”.

[2] G. Crepaldi e S. Fontana, La dimensione interdisciplinare della Dottrina sociale della Chiesa, Cantagalli, Siena 2006.