[daniel-s]

The way that you know that you're making a social impact or benefiting society then you're making money. Social benefit and making profits are the same thing.

There are exceptions of course, like if you made money by cheating via violence or because you got the government to grant you special privileges. Otherwise, if you're playing by the rules then your profit is the only objective, rational way to reason about your social impact. The more profit you make, the greater that you know your impact has been.

[milaresearcher]

I strongly disagree with your statement that profit is the only objectective, rational measure of social impact.

It would be great if the balance of human and environmental well-being produced by an organization could be captured as such, but I feel it is often much more complicated.

It is clear that a poor child has a lower ability to pay for goods and services than a rich child. Does this mean that goods and services sold to the rich one with a hefty profit margin are more "beneficial to society" than when sold to the poor one at cost?

[daniel-s]

First, those are two different things. The first is a business selling a product for profit, the second is a charity: giving or subsidising food to a kid.

It's impossible to know how much benefit anyone gets from food. Maybe the rich kid barely notices the food because he lives in abundance, maybe it's his favourite food, maybe the poor kid is starving and desperate, maybe he's overweight and the food is doing him harm, maybe it's the rich kid's favourite food but his brain reacts less favourably to that than the other kid when eating his least favoured food.

The only thing that can be reasoned about any of the above was that rich kid's parents wanted to pay more money for the food than what the stuff going into it cost. The food producer created something more valuable than what he started with. That is the only conclusion that you can objectively reason about from the above.

[GreeniFi]

It’s maybe not quite so simple and you need to keep an eye on externalities. I’d adjust your formula, somewhat crudely, into:

Social benefit = profit - externalities.

Sadly, most businesses on that construction are negative social benefit.

And that’s down to our bawbag accounting system.

[daniel-s]

That's pretty absurd. You just said that most companies are on net a burden on our society.

Let me check. Yep, can confirm that we do not live in a post-apocalyptic hellscape.

If what you said were true, we would probably not live in a world where most people spend <5% of their day hunting/gathering food, transportation is ubiquitous and universally available, lifespans are unnaturally long, media and entertainment is ubiquitous and caters to every imaginable taste.... I could go on.

Further, given the absensce of the hellscape, if your assertion were true, the balance of benefit to provide our world—in which such a wide range of human wants or needs are easily satisfied—would have to come from a very small number of super companies that are providing the overwhelming surplus of benefits that make our world what it is. I feel that one or few companies that miraculously provides all value to humanity and is our great salvation would probably be a household name... And I'm pretty sure it's not Apple or Telsa.

[GreeniFi]

you’re right. We don’t live in a hellscape yet. But slow drawdown of environmental capital could bring this about. Climate change is the foremost example of this.

[rossvor]

Using your definition any kind of charity or volunteer work provide no benefit to society. This sounds pretty absurd, so either you didn't mean it this way and you need to restate your view more clearly, or you did mean it -- in which case this is a pretty bold statement which requires a more convincing explanation than the one you've given.

[aaronharnly]

Quick clarifying question: are you saying this earnestly, or as satire?

[arkitaip]

HN doesn't really do satire and its pool of inhumane thinking is endless.

[savingsPossible]

This is an interesting perspective, that I sometimes have as well.

But you did miss the important nuance of the externalities as another post also comments.

And you did list subsidies, but some subsidies are hard to notice.

Cars, for example, are heavily subsidised (think of road maintenance+the rent of all that space) and cause negative externalities (noise, pollution and congestion).

So it is more than possible to make a profit and not be socially beneficial (I think that cars are a good example, but we can disagree on that, they stand mostly as an example of subsidies and externalities, the balance of good and harm is harder to access).

[patja]

What do you think about tobacco companies? Or payday lenders?

I understand some would do something highly profitable but morally questionable and then donate the profits to a more socially productive firm. Is that what you are thinking? The end justifies the means?

[daniel-s]

Regarding Tobacco: they're providing a product that people want to consume. I'm classifying fraud with violence. So if a tobacco company lies, pretending that their products are healthy or whatever, that's evil. But a rational human can decide that they want to indulge in something now at the cost of possible consequences in the future. That you or others may not have such a strong time preference, i.e. choose current indulgences at a higher future cost, is no reason to project your values on others or to say that selling tobacco is not providing that consumer the benefit of enjoying a nicotine hit.

Not 100% familiar with payday lenders, but I'm assuming short term, very high interest rate loans. In principle access to credit is useful to people to meet immediate needs. It is the case for any loan that saving up, rather than spending now and incurring the cost of interest would be cheaper. Lending people money lets them enjoy houses, cars, or other trinkets earlier than they could otherwise obtain them. The added benefit comes at the cost of paying interest. If someone does that over shorter timeframes at higher interest doesn't change the value that lending brings.

What we can say rationally about the above is that consumers chose to indulge in the above services, that they gave up their valuable cash in exchange for the benefits that the above services brought them.

[jpetso]

Would you equate satisfying the (real or perceived) needs of individuals with social benefit? Are there situations where you could view the profit-generating satisfaction of one person's needs as a net negative to the sum of all individuals' needs?

[patja]

Both examples feature large long-term negative externalities that are usually picked up in one way or another by the taxpayer.

[daniel-s]

Here the fault is not the buyer or seller but the government. If you didn't financially penalise the smoker for smoking, he would have a disincentive to smoke. However, the government might decide to subsidise healthcare, thereby taking away the financial penalty of smoking. The government now takes away the financial burden of smoking and encourages people to smoke. I don't think people should smoke, which is why I would object to the government subsidising it.

If people want to indulge their very immediate needs at the future cost to their hip-pocket or health that's Thier indulgence and is what they rationally decided will make them happy. I think it's immoral to take money from taxpayers to subsidise behaviour that has harmful long-term effects.

[charlesu]

As a part-time trader, my social impact has no relationship whatsoever with my profits.

[daniel-s]

Not true. Your trading provides a secondary market for companies. It encourages people to create new companies to later sell to investors.

Further, you get rewarded to the degree that you correctly speculate on the future prices of stocks (or whatever you trade) and penalised when you get it wrong. That tends to bring future prices back in time (that is, speculation causes the price of something to reflect today what it otherwise would have been in the future). That's really important because it causes capital to be more accurately alloted to ventures that will be creating value in the future and away from those that will create less value or be destructive of value in the future.

[charlesu]

Stock trading is at an all-time high. Do you think more companies are being created or fewer?