Freeman

ARTICLE

The Lure of Nonprofitable Services

FEBRUARY 01, 1971 by KURT V. LEININGER

Captain Leininger is an Engineer at Edgewood Arsenal, Maryland. This article is reprinted by permission from the August 1970 issue of Civil Engineering.

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

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

FOOT NOTES

1 Quotes from the American Chemical Society News Service. Transcript #460.

ASSOCIATED ISSUE

February 1971

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