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Friday, October 23, 2009
Down the Rathole
IN A POST PUT UP BOTH at BabyTrollBlog and here at Eternity Road, I tossed off, as a tangential aside, my personal contention that the notion of “non-profit” is a bad one. Twice, first by Alex Vander Woude, then by our own Neanderpundit, Og, that was challenged in comments. Enough so, and with substance enough, to make me want to expand on the idea.
Let us lay this out as an informal thesis. I will begin by attempting to explain my premises, then move on from there. Given my not being of a rigorous bent, this might get a little hairy, so please bear with.
First, I believe in God. Not, perhaps, as some bearded patriarch with powers of prestidigitation, but… The structure and history of the Universe as Man has been able to apprehend it fairly demands a creator.
I do suspect that mankind, playing the losing game of trying to apprehend the mind of God, has gotten the facts wrong on most points, which is why I probably can’t be a true Christian—I don’t do well in churches, where hewing to an accepted theology is pretty much a requirement for membership. But, here and there in all the tall tales and jeremiads of all religions, I get glimpses of notions that seem to have managed to duct tape a flimsy handle on some slick surface of The Truth, and that, taken together, they seem to form a fairly coherent cosmological and theological world view. No rigor, understand—I’m too lazy for that—but occasional flashes of insight.
One of those can be encapsulated in the Biblical notion that Man was/is/has been created in the image of God. Now, unless God is an upright, bipedal ape, I suspect that means the mind of Man is made in the image (like the image of a hard drive) of the mind of God. That every one of us—individuals—is so made. The mind of the individual is the apotheosis of humanity—that which makes us in apprehension so like a god. It follows, therefore, that that which denies the divinity of the individual—including especially collectivist political philosophies—is blasphemous. Perhaps one might tentatively think to consider thinking about saying, “affirmatively evil.”
Or, one might make that assertion more ... um ... assertively.
Now, I’m going to make a little leap that must sometimes leave my readers’ heads spinning. There is a connection, I promise. But, if I took the time to “show my work” as your math teachers used to say, I’d never get to the point. Just… trust me on this. Or go do your own research and come to the same conclusion on your own.
The graduated Federal Income Tax.
See? Dolly’s head is spinning around like a hoot owl’s.
Those of you who have done the research into Marxism understand that the income tax is a specific prescription, direct from the great Marxman himself, for the “progress” of society toward a communist utopia. Its purpose is manifold. First: to provide the state, which is to be taken over from within by good socialist revolutionaries, with aready source of cash which citizens of a country in the grip of income taxes cannot lawfully avoid. (And it doesn’t matter to the revolutionary which choice a People might take—whether to suffer the slings and arrows, or to become outlaws by evading them. Es macht nichts—either way, the revolutionary thinks, he wins.) Second: the income tax is meant to provide a levelling of classes, by impoverishing the wealthy and enriching the less-wealthy, through the largesse of the state. That the fact it only has the effect of impoverishing the entire society seems to have escaped our revolutionary geniuses is a tart bit of mordant irony.
You may see this next as a bit of a leap. You can trust me on it or you can do your own research. Es macht mir nichts.
The Federal graduated income tax is the paymaster of both the leviathan nanny state and the Gramscian Marxist Long March through the institutions of Western Civilization. And the core perversion it proposes is that income—profits—are evil and subject to state confiscation on that basis alone.
One of its subsidiaries (yet no less odious for all of that) is the requirement that organizations—free associations of notionally free individuals for their own, non-nefarious purposes—submit to a financial anal exam by—of all people—tax collectors (for Christ’s sake!) in order to be permitted by the government to continue in their purposes for another year.
How odious is that?
When I asked Alex Vander Woude in comments to the earlier post, “Why is it that your school is non-profit?” the answer I was looking for is, “Because of the perverse incentives in the Internal Revenue Code.” There is no other reason that a private, co-op school should not be a for-profit entity. And, indeed, there are myriad reasons it should be.
The same mind-set which embraces income taxes, class warfare, wealth-envy, and anti-free-market ideas also sees profit as a dirty word. It is somehow seen as unearned or “found” money. A windfall. A close examination of this notion reveals to an open mind exactly how wrong-headed it is. Absent coercion—of the type that, in a free republic, only a government can muster—a profit will always be earned—albeit perhaps sometimes less-than-honorably. One cannot have a return on investment greater than 1.0 unless one has provided goods and services that people are willing and able to pay for. The only way you can get around that rule is by collusion with government to distort the laws of the natural marketplace. If the merchant is behaving honestly and the government is doing its job, coercive monopolies, price-fixing, barriers to entry, and the like are virtually impossible. But, these days, economic ignorance is widespread (by design, I hasten to add), and so, when demagogues inveigh against profits—obscene, record, unheard-of, windfall—they have a ready audience.
Profit, well-earned by a cleanly-run enterprise, is an indicator of good performance, of prudent operation of the enterprise, and of how well said enterprise serves its purpose, and of its perceived value to the individuals who purchase its goods or services. Profits are, in part and in one sense, the votes made flesh of the individual customers of an enterprise. Profit is increase: in value, in strength, in reach, in ability. In this, profit can be seen to be analogous to nature’s drive to increase. Nature understands (in a metaphorical sense: obviously nature collectively has no brain to understand anything literally) that to diminish is to die, that survival demands growth, demands increase—demands profits.
As such, profit must be seen as being godly. As being demanded of us by nature’s God. In the Parable of the Talents, which which I tasked Alex in the comments to the earlier post, I see the master as being a standin for God. Each of us is given a lot in life, and what we do with it tells how we serve ourselves, our fellow man, and our God. His (or hers or its) judgement of our lives (or perhaps, our own judgement of our lives, seen in the light of the perfect knowledge we suppose will be ours in the next life), must surely rest at least in part on what we did with our God-given talents (either in the monetary or moral sense) in this one. When we meet with Him again, by whatever myth you choose to call it, the question we will face is, “What have you done with that which I gave you?”
And, even if you are an atheist or an agnostic, unless you are an amoral lackwit, you must surely recognize that your own self-worth stems, at least in part, from how you have played the hand Fate has dealt you.
I don’t doubt that all of this has been recognized by collectivist theorists down through the years—as much as they must despise it—and that it is one of many reasons such people act to degrade the moral sense of their target societies—the societies they seek to bring down by their subversion.
Thus the income tax. Thus the special requirements for tax exemptions for churches, charities, et al. Thus the requirement that such entities not make a profit.
That’s not to say that a private association be required to make a profit, merely that it’s odious that the state require that it not. Except that the state has arrogated to itself the power to tax incomes—as insidious as that is—what business is it of the state whether an enterprise earns a profit?
A school, as in Alex’s example, could use profits for much the same things a commercial enterprise might: maintaining and improving its physical plant; making other capital improvments, such as buying lab equipment, text books, library books; giving raises to its staff, or hiring additional staff; saving for the future. The organization of such an enterprise so as to allow it to make a profit—to require it, even—would give the “owners” (or stewards) real, clear, and invaluable signals as to the health of the enterprise.
“But, Alger,” Dolly says, being a good little shill, “Wouldn’t that lead to decisions’ being made with an eye toward profitability? Wouldn’t that in turn lead to facets of the organization’s life—facets that are desirable, even required by the organization for its charter purpose—being given short shrift because they contribute little to the bottom line?”
In a poorly-run enterprise, Dolly, that might be so. But why is it that such an enterprise deserves to survive—sometimes at the expense or to the detriment of a better-run one? Surely you’re not claiming that every for-profit commercial enterprise, all activities in which it engages must contribute directly to the bottom line? That no business anywhere ever does anything that might, in the short run, or in a purely local sense, can be seen as a pure cost center? That all businesses are all profit-center?
Er… No. I guess not. Not when you put it that way.
Of course. This whole post is an exercise in “putting it that way.”
So, we’ve established that profits are a good thing, and that there is nothing inherent in the mission of a religious, charitable, or cooperative venture that requires it to abjure profits, and that there is much to be said against that requirement. Can we not therefore flip the coin over and argue the opposite—that an organization which fundamentally abjures profit can be seen to be failing at its godly duty to increase its patrimony—to be (in effect) pissing it down a rathole?
Not if it serves its purpose?
OK. Fair enough. If an ad hoc organization fulfills its purpose and thereafter folds its tents, it need not show a profit. Its profits, in a sense, might be seen to be being distributed among the recipients of its largesse. But any organization which perceives its mission as being ongoing—as being, for all intents and purposes, permanent—owes it to its mission to grow, to increase, to—in a phrase—show a profit. Be it the Prairie Home Co-operative Comprehensive School, or the Knights of Columbus, or the ASPCA ... or General Motors, or Microsoft, or Mom and Pop’s Corner Independent Grocery—any enterprise which serves the public good owes it to itself, its mission, its employees, its beneficiaries, and its stakeholders to earn a positive return on the money invested in it.
And the only reason it cannot is due to the perverse provisions of the tax code—a tax code which, as we can see, is driven by an evil ideology.
As a perspicacious reader may detect, this thesis, as long as it is for this medium, is sketchy, leaves a great deal of its argument unexplicated. Some of that is doubtless due to my not having as thoroughly explored all the nooks and crannies of my basic, aphoristic notion that “Non-profit is a dirty word.” Some of it is surely due to my own human limitations. After all, who among us can apprehend the mind of God? Yet, surely, fully understanding the structure of the Universe and the natural laws which govern it, requires that one do just that. In the aid of developing (or debunking) this notion, of refining it and any possible corrolaries, I would be churlish to not invite discussion—even a lively and contentious one. So, have at it. I will not, however, brook ad hominems at BTB and would attempt to prevail on Fran to remove them at Eternity Road. Keep it clean, keep it civil, or I’ll knock your heads together (to quote my sainted Mother).
Cross-posted at BabyTrollBlog.
Comments
As one rennaissance man to another, I have to say that I admire you and your compatriots sticking with this blog. I listen to Rush and Hannity and Mark Levin and to some of their callers and I feel like this country is awash in the most brain-dead, zombiesque mental midgets that could possibly be produced by the government education system. But, of course, that was all according to the design. There are things that happen by accident, but nothing like what we are experiencing with Obama happens by mere coincidence. History, and the quotes of past dictators proves what I am saying is true.
There is an open conspiracy. How funny. We have an administration full of people who are now openly admitting that they love the philosophy of Mao and Marx, and the masses of the people are oblivious.
Those of us who know what is really going on have been too timid to speak up in advance? Or is it just an inevitable course?
I don’t know. Father help us.Posted by on 10/23/2009 at 01:59 AMThis does deserve development. It should be broadened to include, among other things, non-monetary conceptions of profit, the seductions of limited liability, dyadic and triadic State interventions and how they predispose an organization to conceal or otherwise “cross-dress” its profits, and the influence of the Tunguska meteorite strike on the National League’s decision not to adopt the designated hitter rule.
Whoops, sorry, got carried away there for a moment. But seriously, there’s a lot of ground to cover, and I’m tempted to take up the torch. For the moment, allow me to observe that profit, etymologically, means for making it. There’s a wealth, if you’ll pardon the choice of words, of implication in that fact alone.
Posted by Francis W. Porretto on 10/23/2009 at 05:59 AMMark,
At first blush, this looks like a good exposition of what profits are, and why they are good. Fran is right, though, that profits should be considered broader. The school discussed may be not for profit in the narrow sense, but provide profit for the parents, who may desire a more structured education for their children. Much of the idea that profits are bad come form a criticism of the “consumer society” in which the critics are making value judgements about how people choose to spend their money, and how the evil companies are leading people astray for their own profit. If the critics blamed people for purchasing frivolous things, they would be about half right, the judging of the value being the unsound ground. But to the degree they demonizing the businesses who supply these what the consumer requests, I think they are on quick sand.Good post, and a good apologetic for the “capitalist system,” which of course was just “the system” before Marx came along.
Posted by PolyKahr on 10/23/2009 at 12:21 PMGreat stuff Mark!
I thought your parable of the talents defense was ingenious. I wouldn’t have thought of it.
My two cents:
The profit motive helps us “make the most of things,” which was hit on several times here. Showing a profit in an honest market is a sign of serving others well.
A Christian school which turns a profit and then spends that profit in such a way as to satisfy non-profit status (which no doubt this school is doing, at least at some times) is in a sense wasteful. That is not to take away from what it has accomplished, only to say that it might have accomplished more. By using its profits to expand its mission (e.g. open another school, and make even more profits), the Christian school expands its footprint and extends the dominion of the God it serves in the lives of men. Certainly, if one Christian school is good, two must be better, no?
Nothing can or should take away from the good an organization like this is accomplishing, and my hat is off to anyone who goes into competition with the state. If we are to be judged by our Maker for every penny squandered and every missed opportunity, I suspect we are all deserving of many stripes when the time comes.
Is that the way it’s going to be? I sure hope not! But at the same time, deliberately structuring an organization so that it will not grow and spread its influence is probably not doing as well as it might.
Do you really believe your message? Then go tell it on the mountain!
(And when is someone going to comment on all of us who spend so much time distributing our so-called wisdom for free all over the internet?! Why aren’t we out trying to make a buck?!)
Posted by Scott Angell on 10/23/2009 at 05:40 PMFor what it’s worth, I think you may be right, but not precisely for the reasons you think you are.
“For profit” has a particular meaning, narrower than the one you explicate. A “for-profit” enterprise exists to generate a return on its initial investment, and to distribute that return to its original investors or their successors, in monetary form. Any enterprise which fails to distribute its profits to investors is either a “non-profit” or a fraud.
This is, in fact, a consequence of definitions in the law, but I don’t think the relevant ones are necessarily socialist in implication.
It is indeed desirable that any enterprise be managed in a manner in which this end could be theoretically possible (that is, a manner which sustainably generates a net positive return on investment). However, some enterprises (those, not at all coincidentally, generally chartered as “non-profit” or “not-for-profit") are operated for purposes incompatible with actually distributing the returns on their investments to the investors in a monetary form.
In other words, while the word “profit” could conceivably be taken to mean what you appear to mean by it, its meaning in common English is narrower, and the confusion which seems to have occurred is inevitable in the absence of an explanation such as this one.
It is entirely fitting, however, that we make a genuine distinction between commercial enterprises (whose raison d’etre is and ought always to be the return of maximum value directly to the investors, in monetary form) and charitable ones (which should still seek to maximize value, but whose purpose precludes focusing attention on cashing-out that value in order to write quarterly checks to their investors).
The tax code is where we draw this line. The fact that it’s drawn and named by people opposed to any form of profit (and whose motives are therefore suspect) does not mean it should not be drawn at all.
Posted by Matt on 10/23/2009 at 06:34 PMScott;
Thanks! I think I actually got the capitalist use of the parable from my old preacher, the Rev. Dr. Pat (Charles Floyd Murphy, DD), who led a strangely conservative UMC congregation in the ‘60s.
Aside from being pastor to the Walnut Hills-Avondale United Methodist Church, Dr. Pat’s main claim to fame was that he’d been a chaplain in the 509th Composite Bomb Group during WWII and had ministered to the crew of the Enola Gay—so knew a little about hellfire.
As for your last, I think of free blogging like garage band rock-and-roll or open-mic standup. It gives you a place to be bad, so when you hit the big time, you’re ready to blow doors and not waste time.
Why an old fart like me is still here working on my chops surpasseth all understanding.
::grin::
M
M
Posted by Mark Alger on 10/23/2009 at 07:22 PMWow, good one Mark! I’m pleased that you took the time to develop your thesis. After reading this latest piece, I think we may actually agree more than we disagree. In particular, the concept that profit is not necessarily money is key. As important is the insight that a lot of what organizations such as my preschool do is done in order to avoid tax burdens imposed by the state.
I would like to go on, but I’m near the bottom of my glass of Merlot so I fear my mental acuity is not all that it could be. I will just say that the initial impression I got from your first piece (namely, that not being explicitly focused on making as much money as possible to the exclusion of all other considerations was being condemned by you) seems to have been wrong.
Posted by on 10/23/2009 at 10:20 PM
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