The Lure of Nonprofitable Services
FEBRUARY 01, 1971 by KURT V. LEININGER
Captain Leininger is an Engineer at
A pressing question today asks where the young will channel their abundant energy. Civil engineers are worried that the influx of new engineers will not keep pace with the rising demand for engineering services. Yet they are in some doubt as to the best way of presenting the engineering profession to the young as an exciting field of endeavor. The best way would seem to show the young what engineers do, what they have the potential for doing, and the actual and potential rewards, monetary and otherwise. Instead, however, the alleged benefits of "nonprofits" and "public service" are frequently advanced to entice the young (particularly today’s young) to enter engineering. A good example is a recent radio interview with a prominent engineering professor.
Discussing the future of the field of environmental sciences and engineering, the professor said that this is an attraction to the young because the work they will do won’t "profit an individual industry" or "result in higher profit statements to a group of people who are anonymous" to the young. He went on to add that "one can work in the public sector and begin to see something of their efforts developing on the scene."¹
Dissecting these comments, it appears that the young are urged to seek employment in an organization that can generate no profits, can provide no information to its investors as to the fate of their capital, and yet is able to provide the opportunity for individual achievement. It is laborious to undertake to criticize these comments in the setting of the most affluent society on earth, but I think it is essential to do so.
Sign of Consumer Satisfaction
Profits generated by a free (or even semi free) enterprise system are the means by which the various producing segments of a complex society, employing a division of skills, can gauge their success in meeting the requirements of society. Profits mean that a company is successful in meeting consumer demand for its products; decreasing profits mean that the company’s energy is misdirected and should be reoriented toward more urgent requirements. A producer operating with no profit, yet continuing to operate, can only stay in business at the cost of other producers who are making a profit. Ironically, a non-profitable company must also rely on the profit system, to even compute that it has no profits.
At the most fundamental level, an individual employee who produces less than he requires for his livelihood can only continue to be employed at the expense of other employees who are producing more than they require for their immediate need.
Contrary to Karl Marx’s view of the workability of "from each according to his ability, to each according to his need," this actually discourages the "able" from continuing to produce and rewards the "needy" for not producing enough to provide for himself. The net result is a leveling process where achievement is stifled and mediocrity or even sloth is the status quo.
This is the system held out as attractive to the young. The professor I quoted could be confronted with the question, why should the most able and profitable people keep producing, when their rewards, if any, are not proportional to their achievements? But he evades this consideration and blithely states that individuals will be able to see "something of their efforts developing on the scene" if they are not tied to the profit system. He is correct that results will be seen, but they will not be positive results, as any of numerous unprofitable government activities can attest (e.g., postal service, public housing, social security, and medicare).
Anything Worth Doing Should Be Done Profitably
The question now will be raised as to how we can say that the profit system applies to the broad field of public works and especially pollution control, even granted that it applies to private industry (which I’m sure some would grant). The answer, perhaps glibly stated, is that it is still individual people who use the products of large engineering works. The fact that there are many people using a public work at the same time does not relieve the producer from making the best product at the lowest possible cost, which is the criterion for profitability. It is true that the field of pollution control is unique in that people do not use the products for their own direct benefit as much as to prevent their activities from harming other people. But this still requires a successful product. If a consultant designs an abortion, the word spreads and he’s out looking hard for clients, or his plans are not approved by a state agency empowered to grant construction permits.
It makes sense that while the lure of "nonprofit" and "public service" is advanced by the civil engineering profession, engineering students will avoid the field, and turn to chemical or electrical engineering careers in profit-oriented organizations that offer the highest starting salaries. This could also explain why major technological advances in the pollution-control field are being forged by chemical engineers and others who are in private, "profitable" concerns.
If civil engineering is to draw the talent it sees as necessary, it must break away from the "lure to nonprofitable service" and emphasize the fundamental attributes of the profession. If this isn’t sufficient, perhaps the broad civil engineering profession itself is outmoded, and the various specialties within the broad field require emphasis. In any event, if the profession can orient itself to the facts of reality (i.e., new demands, new technology, and the necessity of making profits), that in itself would draw people who then would have a new avenue to profitable achievements.
Profits… are the special creation of the ability, the know-how, the inventiveness, the foresight, the imagination, of the superior executive. They are, in effect, not added into price but taken out of the cost.
JOHN CHAMBERLAIN, The Roots of Capitalism
1 Quotes from the American Chemical Society News Service. Transcript #460.