How Profit-Oriented Motivation Can Impair Innovation and Growth: Norman Bowie's Paradox of Profit from a Micro- and Macroeconomic Perspective

This article is based on Norman Bowie's idea of a "profit-seeking paradox," which states that companies have the best chance of making profits if they do not place profit-making as such at the centre of their activity, but instead pursue a stakeholder-oriented business policy that focuses on creating meaningful jobs and serving customers. In this contribution, Bowie's theory is complemented by a macroeconomic perspective. On the basis of considerations by Keynes, Schumpeter, and Phelps, it is demonstrated how entrepreneurial activity that is not primarily oriented towards financial goals can unfold positive external effects, increasing the productivity of the economy as a whole and thereby also improving the profit opportunities of the respective companies. Otherwise, profit maximization that leads to the neglect of investment can impair the growth potential of the economy and thereby also affect firms' prospects for profits.