ABSTRACT
Profit and profitability are, however, crucial—for society even more than for the individual business. Profit is not the explanation, cause, or rationale of business behavior and business decisions, but rather the test of their validity. If archangels instead of businessmen sat in directors’ chairs, they would have to be concerned with profitability, despite their total lack of personal interest in making profits. The root of the confusion is the mistaken belief that the motive of a person—the so-called profit motive of the businessman—is an explanation of his behavior or his guide to right action. Like food in a famine, it may have dominated the customer’s life and filled all his waking moments, but it remained a potential want until the action of businesspeople converted it into effective demand. Only then is there a customer and a market.
