See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/348742711

Relationship-to-Profit: A Theory of Business, Markets, and Profit for Social

Ecological Economics

Thesis · January 2021

DOI: 10.13140/RG.2.2.31508.73603

CITATIONS READS

31 3,437

1 author:

Jennifer Hinton
Lund University
16 PUBLICATIONS   228 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Adaptation to a new economic reality View project

Post Growth Institute View project

All content following this page was uploaded by Jennifer Hinton on 25 January 2021.

The user has requested enhancement of the downloaded file.

Relationship-to-Profit:
A Theory of Business, Markets, and Profit for
Social Ecological Economics

Jennifer B. Hinton

Doctoral Thesis in Sustainability Science at Stockholm University, Sweden 2021

Doctoral Thesis in Economics at Université Clermont Auvergne, France 2021
Relationship-to-Profit
A Theory of Business, Markets, and Profit for Social Ecological
Economics
Jennifer B. Hinton
Academic dissertation for the Degree of Doctor of Philosophy in Sustainability Science at
Stockholm University to be publicly defended on Thursday 11 February 2021 at 14.30 in rum
306, hus 2B, Kräftriket, Roslagsvägen 101, online via Zoom, public link is available at the
department website.

Abstract
How does the relationship between business and profit affect social and ecological sustainability? Many sustainability
scholars have identified competition for profit in the market as a key driver of social exploitation and environmental
destruction. Yet, studies rarely question whether businesses and markets have to be profit-seeking. The widespread
existence of not-for-profit forms of business, which approach profit as a means to achieving social benefit, suggests that
there are other ways of organizing business and markets that might be more sustainable.
In this thesis, I use a critical institutional economics lens and systems thinking to synthesize existing theory and
knowledge about how business, markets, and profit affect sustainability outcomes, in order to explain how alternative
approaches to these institutions might produce different outcomes. The result is a new theory about how relationship-to-
profit (the legal difference between for-profit and not-for-profit forms of business) plays a key role in the sustainability of
an economy, due to the ways in which it guides and constrains actors’ behavior, and drives larger market dynamics.
In Paper 1, I develop a conceptual framework for understanding the tradeoffs and synergies between profit and social-
ecological sustainability. I show how profit-seeking strategies can be examined to assess whether they derive profit from:
efficiency gains; willing and informed contributions from social stakeholders; or exploitation of social or ecological
stakeholders. These bounded sources of profit imply limits to profit. Therefore, in order for businesses and markets to be
sustainable, they should treat profit as a means rather than an end in itself. In Paper 2, I explain that whether profit is
treated as a means or an end manifests through both voluntary objectives (i.e., if a business explicitly pursues profit as a
goal) and financial rights (i.e., the right or obligation to distribute profit to private owners).
Some forms of business encourage profit-as-an-end more than others. In Paper 3, I outline ideal types of for-profit
and not-for-profit economies, and describe the expected dynamics of these systems based on the regulative aspects of
relationship-to-profit. The legal purpose, ownership (i.e., private financial rights), and corresponding investment structures
of for-profit forms of business all encourage firms to treat profit as an end. The pursuit of unlimited financial gain and
the private distribution of the surplus by for-profit businesses tend to drive the growth of consumerism, environmental
degradation, inequality, market concentration, and political capture. In a not-for-profit type of economy, businesses do not
have a financial gain purpose or private financial rights. Profit in such a system is used as a means to achieve social benefit.
This results in higher levels of equality and opens up the space for more effective sustainability interventions.
Yet, relationship-to-profit is only one dimension of business that is important for sustainability. In Paper 4, I develop
a framework to structure analyses and wider discussions of post-growth business around five key dimensions of business:
(1) relationship-to-profit, (2) incorporation structure, (3) governance, (4) strategy, and (5) size and geographical scope.
The theory developed in this thesis offers an explanation of how key institutional elements of business and markets drive
social and ecological sustainability outcomes.

Keywords: Sustainability, Sustainable economy, Sustainable business, Institutional analysis, Systems thinking, Post-
growth economy, Degrowth, Not-for-profit business.

Stockholm 2021
http://urn.kb.se/resolve?urn=urn:nbn:se:su:diva-187775

ISBN 978-91-7911-344-5
ISBN 978-91-7911-345-2

Stockholm Resilience Centre

Stockholm University, 106 91 Stockholm
RELATIONSHIP-TO-PROFIT
Jennifer B. Hinton
Relationship-to-Profit
A Theory of Business, Markets, and Profit for Social Ecological
Economics

Jennifer B. Hinton
©Jennifer B. Hinton, Stockholm University 2021

ISBN print 978-91-7911-344-5

ISBN PDF 978-91-7911-345-2

Cover image and paper dividers designed by Chiara Aliotta, at Until Sunday.

Printed in Sweden by Universitetsservice US-AB, Stockholm 2021

To my nephew, Cameron.
You have inspired me
since you were first born.
I have been trying my
best to help give you and
your generation the kind
of future you deserve.
And I will keep trying.
This dissertation is submitted for a double doctorate degree in Sustainability
Science, awarded by Stockholm University, and Economics, awarded by the
University of Clermont Auvergne, through a bilateral cotutelle agreement.

Supervisors:

Dr. Sarah E. Cornell, Stockholm Resilience Centre, Stockholm University,

Sweden
Dr. Arnaud Diemer, CERDI, Université Clermont Auvergne, France
Dr. Wiebren J. Boonstra, Department of Earth Sciences, Uppsala University,
Sweden
Prof. Dr. Eric Dacheux, Sciences de l’information et de la communication,
Université Clermont Auvergne, France

This project has received funding from the European

Union’s Horizon 2020 research and innovation pro-
gramme under the Marie Skłodowska-Curie grant
agreement No 675153
ii
Abstract
How does the relationship between business and profit affect social and eco-
logical sustainability? Many sustainability scholars have identified competi-
tion for profit in the market as a key driver of social exploitation and environ-
mental destruction. Yet, studies theorizing a sustainable economy rarely ques-
tion whether businesses and markets have to be profit-seeking. The wide-
spread existence of not-for-profit forms of business, which approach profit as
a means to achieving social benefit, suggests that there are other ways of or-
ganizing business and markets that might be more sustainable.
In this thesis, I use a critical institutional economics lens and systems think-
ing to synthesize existing theory and knowledge about how business, markets,
and profit affect sustainability outcomes, in order to explain how alternative
approaches to these institutions might produce different outcomes. The result
is a new theory about how relationship-to-profit (the legal difference between
for-profit and not-for-profit forms of business) plays a key role in the sustain-
ability of an economy, due to the ways in which it guides and constrains ac-
tors’ behavior, and drives larger sustainability-related dynamics.
In Paper 1, I develop a conceptual framework for understanding the
tradeoffs and synergies between profit and social-ecological sustainability. I
show how profit-seeking strategies can be examined to assess whether they
derive profit from: efficiency gains; willing and informed contributions from
social stakeholders; or exploitation of social or ecological stakeholders. These
bounded sources of profit imply limits to profit. Therefore, in order for busi-
nesses and markets to be sustainable, they should see profit as a means rather
than an end in itself. In Paper 2, I explain that whether profit is seen as a
means or an end manifests through both voluntary objectives (i.e., if a business
explicitly pursues profit as a goal) and financial rights (i.e., the right or obli-
gation to distribute profit to private owners).
Some forms of business encourage profit-as-an-end more than others. In
Paper 3, I outline ideal types of for-profit and not-for-profit economies, and
describe the expected dynamics of these systems based on the regulative as-
pects of relationship-to-profit. The legal purpose, ownership (i.e., private fi-
nancial rights), and corresponding investment structures of for-profit forms of
business encourage firms to see profit as an end. The pursuit of unlimited fi-
nancial gain and the private distribution of the surplus by for-profit business
tend to drive the growth of consumerism, environmental degradation, inequal-
ity, market concentration, and political capture. In a not-for-profit type of
economy, businesses do not have a financial gain purpose or private financial
rights. Profit in such a system is used as a means to achieve social benefit.
This results in higher levels of equality and opens up the space for more ef-
fective sustainability interventions.
Yet, relationship-to-profit is only one dimension of business that is im-
portant for sustainability. In Paper 4, I develop a framework to structure anal-

iii
yses and wider discussions of post-growth business around five key dimen-
sions of business: (1) relationship-to-profit, (2) incorporation structure, (3)
governance, (4) strategy, and (5) size and geographical scope. The framework
clarifies that, as a legally-binding formal institution that specifies the financial
rights and legal purpose of a business, relationship-to-profit guides and con-
strains all of the other dimensions. As such, the relationship-to-profit dimen-
sion is essential for aligning business with sustainability.
The theory developed in this thesis offers an explanation of how key insti-
tutional elements of business and markets drive social and ecological sustain-
ability outcomes. A better understanding of these institutions, in turn, allows
for more effective sustainability interventions.

Key words: Sustainability, Sustainable economy, Sustainable business, Insti-

tutional analysis, Systems thinking, Post-growth economy, Degrowth, Not-
for-profit business

iv
Sammanfattning
Hur påverkar förhållandet mellan företag och vinst social och ekologisk håll-
barhet? Många forskare inom hållbarhet har identifierat konkurrens om vinst
på marknaden som en viktig drivkraft bakom social exploatering och miljö-
förstöring. Ändå ifrågasätter studier sällan om företag och marknader måste
vara vinstsökande. Den stora spridningen av icke vinstdrivande företagsfor-
mer som ser vinst som ett sätt att uppnå social nytta påvisar att det finns andra
sätt att organisera företag och marknader som kan vara mer hållbara.
I denna avhandling utgår jag från kritisk institutionell ekonomi- och
systemtänkande för att syntetisera befintlig teori och kunskap om hur företag,
marknader och vinst påverkar hållbarhetsresultat för att därigenom förklara
hur alternativa tillvägagångssätt för dessa institutioner kan ge andra resultat.
Resultatet är en ny teori om hur relation-till-vinst (den juridiska skillnaden
mellan vinstdrivande och icke-vinstdrivande företagsformer) spelar en avgö-
rande roll i en ekonomis hållbarhet, genom det sätt på vilken den styr och
begränsar aktörernas beteende och påverkar större dynamik.
I Paper 1 utvecklar jag en konceptuell ram för att förstå intressekonflikter
och synergier mellan vinst och social-ekologisk hållbarhet. Jag visar hur vinst-
sökande strategier kan undersökas för att bedöma om vinsterna härrör från:
effektivitetsvinster; frivilliga och informerade bidrag från sociala intressenter;
eller exploatering av sociala eller ekologiska intressenter. Dessa begränsade
vinstkällor innebär gränser för vinst. För att företag och marknader ska vara
hållbara bör de därför se vinst som ett medel snarare än ett mål i sig. I Paper
2 förklarar jag att huruvida vinst ses som ett medel eller ett mål manifesterar
sig genom både frivilliga mål (dvs. om ett företag uttryckligen strävar efter
vinst som mål) och ekonomiska rättigheter (dvs. rätten eller skyldigheten att
fördela vinst till privata ägare).
Vissa företagsformer uppmuntrar mer än andra till vinst som ett mål i sig.
I Paper 3 beskriver jag idealtyper av vinstdrivande och icke-vinstdrivande
ekonomier och beskriver den förväntade dynamiken i dessa system baserat på
de legala aspekterna när det gäller förhållande till vinst. Det rättsliga syftet,
äganderätten (dvs. privata finansiella rättigheter) och motsvarande investe-
ringsstrukturer för vinstdrivande former av företag uppmuntrar företag att se
vinst som ett mål i sig. Strävan efter obegränsad ekonomisk vinst och den
privata fördelningen av överskott från vinstdrivande företag tenderar att driva
på tillväxten av konsumism, miljöförstöring, ojämlikhet, marknadskoncent-
ration och politiska rov. I en icke vinstdrivande ekonomi saknar företag eko-
nomiskt vinstmål samt privata ekonomiska rättigheter. Vinster i ett sådant sy-
stem används istället som ett sätt att uppnå social nytta. Detta resulterar i högre
nivåer av jämlikhet och öppnar upp för mer effektiva hållbarhetsinsatser.
Relationen till vinst är emellertid bara en dimension av verksamheten som
är betydande för hållbarhet. I Paper 4 utvecklar jag ett ramverk för struktu-
rella analyser och bredare diskussioner om företag post-tillväxt kring fem vik-

v
tiga dimensioner av verksamheten: (1) relationen till vinst, (2) integrations-
struktur, (3) styrning, (4) strategi, (5) storlek och geografisk omfattning. Ram-
verket tydliggör att, som en juridiskt bindande formell institution som speci-
ficerar de ekonomiska rättigheterna och det juridiska syftet med ett företag,
styr förhållandet till vinst och därigenom begränsar det alla andra dimens-
ioner. Därför är dimensionen förhållandet till vinst viktig för att anpassa verk-
samheten till hållbarhet.
Teorin som utvecklats i denna avhandling ger en förklaring till hur viktiga
institutionella inslag i näringslivet och marknader driver sociala och ekolo-
giska hållbarhetsresultat. En bättre förståelse för dessa institutioner i sin tur
effektivare hållbarhetsåtgärder.

vi
Résumé
Comment la relation des entreprises avec le profit affecte-t-elle la
soutenabilité sociale et écologique? De nombreux spécialistes du
développement durable ont identifié la course au profit comme un moteur clé
de l'exploitation sociale et de la destruction de l'environnement. Pourtant, les
études mettent rarement en question la nécessité de cet impératif de
profitabilité. L'existence très répandue de formes d'entreprises à but non
lucratif suggère qu'il existe d'autres façons de penser l’entreprise.
Dans cette thèse, je mixe économie institutionnelle et dynamique des
systèmes pour mieux comprendre la manière dont les entreprises, les marchés
et le profit affectent les performance en matière de durabilité, et cela afin
d'expliquer comment des approches alternatives à ces institutions pourraient
produire des résultats différents. Le résultat est une nouvelle théorie sur la
façon dont la relationship-to-profit (la relation des entreprises vis-à-vis de leur
profit) joue un rôle clé dans la soutenabilité d'une économie, et cela car elle
guide et contraint les comportements dans une dynamique plus large.
Dans l'Article 1, je construis un cadre conceptuel pour mieux comprendre
les compromis et les synergies entre le profit et la soutenabilité socio-
écologique. Je montre comment les stratégies de recherche de profit peuvent
être examinées en fonction de la source de leur profit : les gains d'efficacité ;
les contributions volontaires et éclairées des acteurs sociaux ; ou bien d’une
exploitation sociale ou/et écologique. Ces sources de profit limitées
impliquent des limites au profit. Par conséquent, pour que les entreprises et
les marchés soient soutenables, ils devraient considérer le profit comme un
moyen plutôt que comme une fin en soi.
Dans l'Article 2, j'explique que le fait que le profit soit vu comme un moyen
ou une fin se manifeste à la fois par des objectifs volontaires (si une entreprise
poursuit explicitement le profit comme but) et des droits financiers (le droit
ou l'obligation de distribuer le profit à des propriétaires privés).
Certaines formes d'entreprise encouragent le profit en tant que fin plus que
d'autres. Dans l’Article 3, je décris deux idéal-types d'économi, une à but
lucratif et l’autre sans, et je décris la dynamique de ces systèmes. Le but
juridique, la propriété (i.e. les droits financiers privés), et les structures
d'investissement correspondantes des entreprises à but lucratif les encouragent
à considérer le profit comme une fin. La recherche d'un gain financier illimité
et la distribution privée des profits par ces entreprises tendent à stimuler le
consumérisme, la dégradation de l'environnement, les inégalités, la
concentration du marché et la corruption économique de la vie politique. Dans
une économie à but non lucratif, les entreprises n'ont pas d'objectif de gain
financier ni de droits financiers privés. Le profit dans un tel système est utilisé
comme un moyen d’atteindre un objectif social. Cela se traduit par des
niveaux d'égalité plus élevés et ouvre la voie à des politiques de soutenabilités
plus efficaces.

vii
 La relation au profit n’est pas la seule dimension d’une l'entreprise qui est
importante en termes de soutenabilité. Dans l’Article 4, je développe un cadre
analytique pour permettre une discussion plus large sur la forme que prendrait
une économie post-croissance ; plus spécifiquement, je fais la distinction entre
cinq dimensions clés de l'entreprise : (1) la relation au profit, (2) la structure
juridique, (3) la gouvernance, (4) la stratégie, et (5) la taille ainsi que la portée
géographique. Le cadre précise que la relation à but lucratif guide et contraint
toutes les autres dimensions. En tant que tel, cette dimension est essentielle
pour aligner repenser l’entreprise de manière soutenable.
La théorie développée dans cette thèse explique la manière dont les
éléments institutionnels clés des entreprises et des marchés déterminent les
résultats de soutenabilité sociale et écologique. Une meilleure compréhension
de ces dynamiques permettrait des politiques de soutenabilité plus efficaces.

viii
Papers

Paper 1:
Hinton, J.B. “Limits to Profit? A conceptual framework for understanding
profit and sustainability.” Manuscript to be submitted to Ecological Econom-
ics.

Paper 2:
Hinton, J.B. and Cornell, S.E. “Profit as a Means or an End? An analysis of
diverse approaches to sustainable business.” Under review for Journal of
Cleaner Production.

Paper 3:
Hinton, J.B. 2020. “Fit for Purpose? Clarifying the critical role of profit for
sustainability.” Journal of Political Ecology, 27 (1): 236- 262.

Paper 4:
Hinton, J.B. “The Five Dimensions of Post-Growth Business: Putting the
Pieces Together.” Under second round of review for Futures.

ix
Related work
This dissertation is a further development of previous work:
Hinton, J. and Maclurcan, D. 2016. How on Earth: Flourishing in a Not-for-
Profit World by 2050 (working draft). Ashland, OR: Post Growth Publish-
ing. https://arxiv.org/pdf/1902.01398.pdf
Hinton, J. and Maclurcan, D. 2017. “A not-for-profit world beyond capital-
ism and economic growth?” Ephemera Journal 17 (1): 147-166.

x
Preface

All economic thinking comes from certain minds, in particular historical

and cultural contexts. Along these lines, it is worth mentioning a bit of my
own context.
I am a white American woman from a middle-class family in Colorado,
who has experienced a variety of facets of the current economic system. I grew
up fully immersed in the business world, as my mom and dad have both been
successful business managers and owners. They encouraged me to start work-
ing from an early age, so I have a relatively long and varied employment his-
tory. I have worked at restaurants, a grocery store, an insurance company, a
hospital, and a few different schools. I have also been a freelance educator,
editor, and workshop facilitator.
In addition to having experienced multiple different business environments
from various vantage points, I have also experienced the unsustainability of
our global economy in diverse contexts. After receiving my bachelor’s degree
in International Affairs from the University of Colorado, I moved to a rural
village in China, where I taught English at a public high school for six months.
In that village, I witnessed an environmental disaster unfolding, due to the
pollution from an increasing number of factories in the area. The fish in the
small nearby river had mostly died off and the consequences for human health
were already evident, as a local doctor infomed me. Although, the people of
the village were financially poor and suffered from the environmental pollu-
tion of their air and water, they had a deep sense of community cohesion and
family connection that I had never before seen. The intense experiences of life
in rural China made me start to question the mainstream narrative of develop-
ment. It was clear that the Chinese village that hosted me was not less devel-
oped than my community in Colorado. It also appeared that industrialization
might be doing more harm than good to the people of China, given its envi-
ronmental consequences. I was inspired to learn more about sustainability so
that I might be able to help prevent the further suffering of people and ecosys-
tems in places like rural China.
I attended Lund University’s two-year master’s program in Environmental
Studies and Sustainability Science, in Sweden. After I finished my master’s
degree in 2008, I returned to the US only to find the economy in a death spiral.
Even with a fresh master’s degree in sustainability, the only paid work I could
find was at a coffee shop. After a short stint of serving coffee in Colorado, I
decided to move to Athens, Greece in 2009 to be with my (now) husband
whom I had met in Sweden. Of course, I arrived just in time to experience the
infamous Greek economic crisis. Living in downtown Athens, the devastating
effects of the crisis were part of my everyday experience for six years; from
our Greek friends and family members who found themselves out of work to
the growing number of people living on the streets, from the increased rates
of drug use and suicide to the frequent demonstrations and the smell of tear

xi
gas seeping through our living room window. Out of the desire to sieze the
crisis as an opportunity for positive change, I joined initiatives that were work-
ing to build up a more sustainable economy in Greece. I also joined the Post
Growth Institute, an international group of researchers and activists, to help
find sustainable pathways forward.
I have lived much of my adult life in economic crises. I grew up hearing
about global warming and species going extinct. And I have witnessed the
human and environmental costs of “development” first hand. These life expe-
riences drive me to contribute to solutions. The knowledge of sustainability
issues and systems thinking that I gained in my master’s program has pushed
me to find the roots of global sustainability problems. I have found that the
majority of those problems can be traced back to the way the economy is or-
ganized.
This PhD has been a long time in the making. It started with the How on
Earth book that Donnie Maclurcan and I wrote for the Post Growth Institute,
which outlines how a sustainable not-for-profit economy might work. This
doctoral thesis solidifies and strengthens an understanding of the economy that
Donnie and I started to gain through imagining a Not-for-Profit World.
The more formal context of this thesis is that it was funded as part of the
AdaptEconII, Marie-Sklodowska-Curie Actions International Training
Network of the European Union’s Horizon 2020 program. The aim of
AdaptEconII was to contribute to the development of new economic thinking
based on knowledge of global resource availability and other biophysical
limits to growth. Systems analysis and economic transformation were the
starting points of AdaptEconII, with a focus on “aspects of resource
availability, links between resources and wealth, the rise of new and/or
rediscovered values and realization of our interdependent world, new
development paradigms, political and industrial ecology, as well as science
for a sustainable society” (European Commission REA, 2015, p. 3). This
thesis is one of 5 PhD projects in the International Training Network’s theme
3: investigating the integration of social dynamics with the biophysically
based economy. My general task has been to examine the dynamics of a more
sustainable economy and, building on my prior work with the Post Growth
Institute, I chose to focus on the social and ecological imlications of how busi-
nesses relate to profit.

xii
Glossary of terms
Business: A commercial entity that generates most of its revenue by selling
goods or services. (Note that the terms “firm” and “company” are used as
synonyms for business in this thesis).
Business ownership: A bundle of rights – namely control rights and financial
rights. Throughout the thesis, I use “business owner” to refer to those who
hold financial rights in a business.
Business purpose: The reason(s) and goal(s) for which a business operates.
Business structure: The legal form of a business. I use “legal business frame-
work” as a synonym.
Capitalist economy: A market economy in which businesses are privately-
owned and operated for private financial gain. I use “for-profit economy”
as a synonym.
Collective business ownership: Financial rights held by an indivisible entity
that represents a group of people.
Control rights: The legal entitlement to operate or manage a business.
Economic growth: An increase in the production and consumption of goods
and services, commonly measured in terms of Gross Domestic Product
(GDP).
Economic paradigm: The set of formal and informal economic institutions
that define a certain way of organizing the economy (e.g., the capitalist
economic paradigm).
Economy: A system in which goods and services are produced, traded, sold,
and bought.
Equity: A share of ownership in a business in the form of financial rights.
Exchange value: How much a commodity can be exchanged for another com-
modity, usually represented in terms of money.
Exploitation: A situation in which one party benefits at the expense of another
party, without the informed and able consent of the latter.
Financial gain (also known as pecuniary gain, enrichment, or enurement):
The possession of increasing amounts of money.
Financial rights: The legal entitlement to the profit and assets of a business.
Formal institutions: Systems of social rules that are enforceable by a legiti-
mate third party, such as laws and contracts.
For-profit business: A form of business that has private financial rights and
can be operated for the financial gain of its owners.
Governance structures: Protocols or rules that determine which stakeholders
are involved in the decision-making, control, and direction of an entity.
Growth-based economy: An economy that systemically drives or requires
growth in production and consumption.
Incorporation structure: A specific legal vehicle through which an organi-
zation becomes a formal entity, recognized by governments.
Inequality (economic): The difference in the distribution of income and as-
sets among a population.

xiii
Informal institutions: Systems of social rules that are taken for granted (e.g.,
ideologies, logics, beliefs) or are enforced by peer pressure or a sense of
social obligation (e.g., social norms, and values).
Institutional economics: The study of the institutions and institutional ar-
rangements of economic activity.
Institutions: Systems of social rules.
Investment: An amount of money allocated to a company or an undertaking,
with the expectation of deriving some benefit in the future.
Legal purpose: The stated mandate of a company (i.e., what it exists to ac-
complish), as set out in its incorporation documentation, charter, and legal
statutes, for which it is held legally accountable.
Market: A meeting of people and/or organizations for the purpose of trade by
purchase and sale.
Market concentration: How much of the total production, employment, or
assets in a market is held by just a few firms.
Needs (human): Max-Neef et al. (1991) define human needs as finite and
universal, consisting of: subsistence, affection, protection, participation,
creation, understanding, leisure, identity, and freedom.
Non-distribution constraint: The legal preclusion of the distribution of profit
to private individuals (typically in not-for-profit entities).
Not-for-profit business: A not-for-profit entity that generates at least 50% of
its income through the sale of goods and services.
Not-for-profit/Nonprofit: An entity that is set up to deliver social benefit and
is constrained from enriching private individuals – it can be charity-de-
pendent or financially self-sufficient through commercial activities (see
Not-for-profit business and Traditional nonprofit).
Notion of economic value: A socially-defined understanding of what is im-
portant or beneficial in economic activity (e.g., Exchange value, Use
value).
Political capture (also known as regulatory capture): The ilegitimate influ-
ence on, or co-optation of, policy-making to serve the interests of a minor-
ity constituency.
Post-growth economics: The study of the economy from the perspective that
it should not drive or require the growth of production and consumption.
Post-growth economy: An economy that does not drive or require increasing
amounts of economic activity.
Private business ownership: Financial rights held by a private individual hu-
man or many private individual humans (also known as natural persons in
legal terminology).
Profit (accounting profit): A business’s financial surplus left over from its
revenue after operating expenses have been paid.
Profit-seeking: The active pursuit of financial surplus by a business.
Relationship-to-profit: The difference between for-profit and not-for-profit
legal forms of business.
Scale: The relative size, extent, or degree of an entity or phenomenon.

xiv
Sustainability: A safe and just operating space in which everyone has access
to the resources to meet their needs within the ecological limits of the
planet, without impairing the ability of future generations to meet their
needs.
Social benefit: Positive impact(s) on a society or community.
Social enterprise: An informal category for businesses that have a social ben-
efit aim (whether as a voluntary or a legally-binding objective).
Strategy: The devising and employing of plans toward a goal.
System: An interrelated set of elements; a whole that is different than the sum
of the parts.
Theory of value: An explanation and definition of the value and price of
goods and services (e.g., exchange theory of value; labor theory of value).
Traditional nonprofit: Not-for-profit organizations that gain 50% or more of
their revenue through philanthropy, grants, and donations, rather than busi-
ness activities. (This term is used to distinguish these organizations from
Not-for-profit business, though there is no legal distinction).
Use value: The tangible features of a good or service that satisfy a human
need.
Voluntary business objective: A goal or aim that a business chooses to pur-
sue, without any legal obligation or accountability.

xv
Figures and tables

Figure 1: My focus in the larger context of post-growth research ..................... 10

Figure 2: How institutions interact with actors’ behavior .................................. 25
Figure 3 : Systems-informed institutional analysis for post-growth sustainability
................................................................................................................... 28
Figure 4: Conceptual overview of the economy through a systemic institutional
lens ............................................................................................................ 29
Figure 5: Process of theory development ........................................................... 31
Figure 6: Business relates to profit through institutional elements .................... 64
Figure 7: For-profit economy dynamics from Paper 3 ....................................... 65
Figure 8: Hybrid economy dynamics from Paper 3 ........................................... 68
Figure 9: Not-for-profit economy dynamics in Paper 3 ..................................... 69
Figure 10: Five Dimensions Framework in Paper 4........................................... 71
Figure 11: Relationship-to-Profit Theory ........................................................... 73

Table 1: Summary of answers to research questions.......................................... 76

xvi
Contents
Abstract ........................................................................................................... iii
Sammanfattning ............................................................................................... v
Résumé .......................................................................................................... vii
Papers.............................................................................................................. ix
Related work .................................................................................................... x
Preface ............................................................................................................ xi
Glossary of terms .......................................................................................... xiii
Figures and tables ......................................................................................... xvi
Contents ....................................................................................................... xvii
Introduction: What do the limits to economic growth mean for business,
markets, and profit? ........................................................................................... 1
Background ......................................................................................................... 5
A post-growth perspective ............................................................................... 5
Motivating tension ........................................................................................... 9
A driver of the problem is identified: Profit-seeking .................................................... 11
The solution does not solve the problem: Cooperatives, social enterprises, and family-
owned businesses .......................................................................................................... 11
A potential solution is overlooked: Not-for-profit businesses and markets .................. 13
Summary........................................................................................................ 15
Research Aim and Questions........................................................................... 17
Aim ................................................................................................................ 17
Research Questions........................................................................................ 17
Papers............................................................................................................. 18
Research Approach: Theoretical synthesis .................................................... 19
A critical realist ontology and epistemology ................................................. 19
A systems-informed institutionalist approach to theorizing .......................... 21
Critical institutional economics..................................................................................... 22
Systems analysis............................................................................................................ 27
Analytical framework.................................................................................................... 28
Generating an explanation............................................................................................. 30
Theory-building as an iterative process ......................................................... 31
Search: Literature review .............................................................................................. 32
Elaboration: Synthesizing and building theory ............................................................. 33
Proclamation: Peer review ............................................................................................ 34
Tension: Boundary critique ........................................................................................... 34
Evaluation and validation .............................................................................................. 35
Limitations and challenges ............................................................................ 36
Summary........................................................................................................ 37
Literature Review: Untangling the relationships between profit-seeking and
sustainability ..................................................................................................... 39
Business, markets, and profit in post-growth literature ................................. 39
Theories of the firm ....................................................................................... 43
Theories of sustainable business.................................................................... 45
Social enterprise ............................................................................................ 48

xvii
 Remaining problems ...................................................................................... 51
Unstated theories of value ............................................................................................. 52

Four Papers and Their Assertions .................................................................. 53

Paper 1: Sources and Limits of Profit ............................................................ 53
Paper 2: Means and Ends............................................................................... 54
Paper 3: Fit for Purpose ................................................................................. 56
Paper 4: Dimensions of Business .................................................................. 57
Synthesis of Papers: Relationship-to-profit theory ....................................... 59
Social and ecological limits to profit and profit-seeking ............................... 59
How businesses relate to profit ...................................................................... 61
Profit as a means or an end ........................................................................................... 61
Relationship-to-profit .................................................................................................... 62
Relationship-to-profit guides and constrains business behavior ................................... 62
The complexity of relating to profit .............................................................................. 63
Sustainability implications of relationship-to-profit...................................... 64
Competition for profit in the for-profit market ............................................................. 64
The drive for private financial gain is unsustainable .................................................... 67
Balancing the for-profit dynamics ................................................................................ 67
A not-for-profit economy would be more sustainable .................................................. 68
Relationship-to-profit and other dimensions of business .............................. 70
Overview of relationship-to-profit theory ..................................................... 72
Boundaries and limitations of the relationship-to-profit theory .................... 79
A note on relationship-to-profit as a legal framework .................................................. 80
Applying relationship-to-profit theory .......................................................... 81
Discussion: Insights for sustainability research and practice ...................... 84
Beyond “ownership”: The centrality of financial rights and the purpose they
serve ............................................................................................................... 84
Clearer concepts and terminology ................................................................. 86
Diversity, pluralism, and clear limiting principles ........................................ 88
Problem identification and limiting principles .............................................................. 89
Clarity and precision of limiting principles .................................................................. 90
Revisiting cooperatives ................................................................................................. 90
Revisiting social enterprises and hybrids ...................................................................... 91
Allowing for diversity to flourish ................................................................................. 92
Leverage points for change............................................................................ 94
Directions for future research ........................................................................ 95
Conclusion: Implications for the world .......................................................... 98
Acknowledgements ......................................................................................... 100
References ....................................................................................................... 102

xviii
Introduction: What do the limits to economic
growth mean for business, markets, and profit?

Decades of concerted efforts to regulate the global economy in ways that

make it socially and ecologically sustainable have largely failed. Patterns of
social exploitation, ecological harm, tax evasion, and political manipulation
done by businesses and their owners are widespread. The result is the onward
march of biodiversity loss, deforestation, soil degradation, climate change,
and inequality. The global and long-term nature of these trends indicate that
the problem is systemic and structural. An increasing number of scholars and
practitioners identify the growth-based economy as fundamentally unsustain-
able and they call for societies to replace the goal of economic growth with
the goal of sustainable provisioning. However, it is not yet clear what kinds of
approaches to business, markets, and profit can align with such a vision. New
conceptual formulations and theories are needed. This dissertation offers such
a theory, for a better understanding of business, markets, and profit from a
post-growth sustainability perspective.

***
In 1987, the Brundtland Commission put forth a definition of sustainable
development as a state in which current generations’ needs are met without
compromising the ability of future generations to meet their needs (World
Commission on Environment and Development 1987). Because humans are
inextricably dependent on the functioning of the biosphere in order to meet
their needs, this entails stewardship of the planet’s biosphere (Rockström et
al. 2009). Therefore, sustainability can be thought of as a safe and just operat-
ing space for humanity that provides the social foundations for meeting eve-
ryone’s needs within the planetary boundaries (Raworth 2017).
Both the ecological safety and the social justice required for such a state of
sustainability are currently lacking. Globally, our species is consuming more
resources and producing more waste each year than the Earth’s biosphere can
regenerate and absorb (known as a state of ecological overshoot)
(Wackernagel et al. 2002). These trends are increasing at an accelerating rate
(Steffen et al. 2011).
I say “our species”, but I should be more precise. Indeed, in a world in
which the richest 5% of the global population consume more energy than the
poorest half of the world (Oswald, Owen, and Steinberger 2020), it is difficult
to ignore the connection between ecological overshoot and economic inequal-
ity. It is clear that some communities are overconsuming while others are un-
derconsuming. Oxfam’s 2018 report found that 82% of all wealth created
globally in 2017, went to the richest 1% while the poorest 50% of the world’s
population got none of it (Alejo Vázquez Pimental, Macías Aymar, and Law-
son 2018). This gap can be expected to grow, as inequality is steadily rising
both within and between nations (Ricardo Fuentes-Nieva and Galasso 2014;
Hardoon, Ayele, and Fuentes-Nieva 2016).
Sustainability research and practice often takes for granted the neoclassical
economic assumption that economic growth – measured as Gross Domestic
Product - is necessary and desirable because it creates wealth, lifts people out
of poverty, and generates technologies that will reduce human environmental
impacts.1 This “green growth” approach assumes that a society can grow its
economy while meeting environmental targets by decoupling its Gross Do-
mestic Product from environmental pressures. The possibility of green growth
is predicated on the assumption of unlimited substitutability of human-made
capital for nature (Daly 1996). This assumption asserts that the money gener-
ated by environmentally harmful activities today will be invested in techno-
logical advances and social activities that will allow for ecological regenera-
tion in the future (Pearce 2002). Furthermore, it is thought that as economies
modernize, growth comes more from services and digital information, and less
from materially-intense processes like building up infrastructure (Ayres and
van den Bergh 2005). In this way, services and information can substitute for
materially-intense goods in generating economic growth.
The green growth approach has been formally adopted by many national
governments, as well as major international organizations, which is reflected
in the OECD’s report Towards Green Growth (2011); the United Nations’
Sustainable Development Goals that feature the goal of “decent work and eco-
nomic growth” alongside a variety of environmental goals (UN 2015); and the
European Union’s goals, which currently aim at “sustainable development
based on balanced economic growth and price stability, a highly competitive
market economy with full employment and social progress, and environmen-
tal protection” (EU website 2020).
Yet, there are a few caveats to the green growth story. Parrique et al. (2019)
point out that, in order to allow for ongoing economic growth and ecological
sustainability, decoupling would have to be absolute (i.e., total environmental

1
In these studies, growth is often framed in terms of justice: that poorer countries have the right
to benefit from economic growth in the same way that rich countries have, because rich
countries caused most of the harm in growing their economies which disproportionately affects
poorer countries. This framing assumes that economic growth is naturally beneficial. A growth-
critical perspective might reframe the environmental justice issue as: everyone should have ac-
cess to resources to meet their basic needs, but this may or may not require growth of the econ-
omy (Hickel 2017a). It may be more a matter of better distributing wealth than of growing
overall production and consumption – especially given the state of ecological and climate
breakdown, as well as the growing number of billionaires.

2
impact must deccrease rather than just having less impact per unit of produc-
tion); global (ensuring that environmental harm is not simply being out-
sourced to where imported goods are produced); and last for the long-term
(rather than temporary bumps in efficiency). Furthermore, sufficient decou-
pling would have to happen for all critical environmental pressures – not just
single indicators like carbon dioxide (Parrique et al. 2019).
How close are we to achieving sufficient decoupling? Reviews of the evi-
dence show that absolute decoupling has not happened and, furthermore, that
the theoretical basis for it to happen in the future is weak (Haberl et al. 2020;
Hickel and Kallis 2020; Parrique et al. 2019). Environmental damage has con-
tinued to increase at an exponential rate, in step with the growth of economic
activity (Steffen et al. 2011). This indicates that there are real ecological limits
to economic growth. In light of these limits, most economies need to stop
growing and many economies should even shrink.
Not only is economic growth environmentally destructive, but it also does
not deliver on its promises to increase social wellbeing either (Easterlin et al.
2010). In fact, there is evidence of declining wellbeing in high-income coun-
tries in terms of mental health (Dittmar et al. 2014a), physical health (Baker
2019), and life expectancy (Murphy et al. 2018). Declines in wellbeing can
also be seen in China, which has been experiencing an economic boom for the
past several decades (Bartolini and Sarracino 2015). The high levels of con-
sumerism, materialism, debt, and work that fuel a growth-based economy
have been shown to have negative effects on psychological and social wellbe-
ing (Schor 2004; Dittmar et al. 2014b). Thus, there are diminishing returns to
economic growth, and economic growth can even do more harm than good
(Daly 1996).
Indeed, the growth of the economy has been driving inequality, rather than
decreasing poverty. In the summer of 2020, the Special Rapporteur of the UN
Human Rights council declared that the Sustainable Development Goals
(SDGs) will not be met and that the goal of economic growth is misguided,
because growth has been making the wealthiest wealthier and leaving the poor
neglected and disadvantaged.2 Furthermore, a diverse array of public health
outcomes such as drug use, infant mortality, educational performance, vio-
lence, and community-connectedness, are all impacted by inequality, even in
high-income countries (Wilkinson and Pickett 2010).
In addition to being ecologically destructive and socially dubious, the
growth-based economy does not perform well even in purely economic terms.
In times when economies do not grow for one reason or another, the whole
economic system becomes destabilized. Investment freezes and unemploy-
ment rises. When people lose their income and decrease their consumption of

2
The full quote is: “But after decades of unparalleled growth, the primary beneficiarites have
been the wealthiest. Rather than an end to poverty, unbridled growth has brought extreme
inequality, widespread precarity in a world of plenty, roiling discontent and climate change –
which will take the greatest toll on the world’s poor” (Alston 2020, 2).

3
non-essential items (a natural response when facing a decrease in income),
that lack of consumption can trigger a recession in the growth-dependent
economy, which tends to decimate even more jobs and income, driving a
downward spiral. In the context of high levels of inequality, recessions can be
quite dangerous for economic and political stability. This was seen with the
Great Financial Crash of 2007- 2008 and it is happening again now, due to the
lock-downs and social distancing measures associated with the Covid-19 pan-
demic. The World Bank has warned that the global economy is likely in the
beginning of the worst global recession since World War II (World Bank
2020). This widespread public health crisis is revealing once again just how
growth-dependent the global economy is (Spash 2020a).
The poor social, ecological, and economic record of the growth-based
economy calls for systemic change. The challenge ahead of us is to organize
the economy to function well without economic growth. The production and
consumption of goods and services, which accounts for the size of the econ-
omy, is largely the purview of businesses. As such, business plays a central
role in reorganizing the economy.
Indeed, many growth-critical scholars have identified market competition
for profit as a key driver of growth and sustainability problems (e.g., Jackson
2017; Magdoff and Foster 2011; Richters and Siemoneit 2017a). Yet, it is
rarely explicitly asked in this literature whether business and markets actually
need to be profit-seeking. The discussion of which aspects of business must
change in order to align with post-growth provisioning is fragmented and in-
coherent. The existence of not-for-profit forms of business, which are set up
to serve social benefit rather than private gain, suggests that there are other
ways of organizing business and markets that might be more sustainable
(Hinton and Maclurcan 2017). However, these types of business are generally
overlooked in post-growth debates.
Hence, the main objective of the present dissertation is to examine the ways
in which different types of business relate to profit and how their relation to
profit might have larger impacts on social and ecological sustainability. My
inquiry follows two main lines. The first is focused on how different institu-
tional aspects of business guide and constrain economic actors’ decision-mak-
ing; while the second line studies how these aspects drive the larger economic
dynamics that shape social and ecological outcomes. In doing so, I develop a
theory of how relationship-to-profit (i.e., the legal difference between for-
profit and not-for-profit forms of business) has important system-wide conse-
quences for social and ecological sustainability.

4
Background

Where do new theories come from? This chapter describes the starting
points on which this theoretical thesis builds. This is what Swedberg (2014,
26) calls the “prestudy” – a process of theoretical exploration that takes place
before the research design, allowing for a formulation of a tentative theory
that will be used to inform the research questions and methods of the main
study. As Smith and Hitt (2007) note, theory development is often triggered
by a tension that the theorist notices – something that is not quite right. Of
course, the theorist notices this tension from their own unique vantage point.
Therefore, I start this chapter with a description of the post-growth perspective
that has fundamentally shaped the way I perceive the sustainability problem,
as well as the way I approach this research.
I then go on to describe the motivating tension that was the springboard for
the development of the relationship-to-profit theory. In short, this is the
tension in the post-growth literature that arises from a mismatch between
problems and solutions. Much of the post-growth literature identifies profit-
seeking business as a key driver of sustainability problems. These scholars
often propose cooperatives and social enterprises as the solution. However,
cooperatives and social enterprises can be profit-seeking, so this solution is
misguided. Meanwhile, other existing not-for-profit forms of business are
overlooked. Furthermore, these authors do not explain how these different
types of business would lead to more sustainable dynamics at a larger scale.
This mismatch of problems and solutions is a theoretical mess, which becomes
evident through systematic attention to the literature’s treatment of the
institutional elements of business. It is this mess that this thesis seeks to
untangle.

A post-growth perspective
The process of understanding and addressing sustainability problems inev-
itably involves the economy. Meeting human needs depends on the harvesting
and consumption of resources from the biosphere via economic processes; and
those processes produce waste that goes back to the biosphere. In shaping the
way resources (and wastes) are allocated, the economy necessarily involves
issues of power. As such, any sustainability problem is both economic and
political in nature.

5
 Furthermore, any approach to understanding the economy is based on a
core set of social norms, logics, and beliefs. This includes assumptions about
human nature, behavior, motivation, and wellbeing, as well as how humans
relate to nature. Those assumptions are inevitably value-laden because they
involve judgements about what is true, important, and right in social settings
(Biermans 2012). From an institutional perspective (which will be discussed
in more detail in the Research Approach chapter), these are the informal social
rules that shape the formal institutions of the economy.
Neoclassical economics is currently the dominant school of economic
thought (Proctor et al. 2018). Yet, many of the assumptions and beliefs em-
bedded in neoclassical economics are outdated and inadequate for the pur-
poses of sustainability (Spash 2017b). Unless sustainability scholars explicitly
use a heterodox economic approach, they risk taking outdated economic as-
sumptions and theories for granted (Pirgmaier and Steinberger 2019). This in-
cludes the assumption that economic growth is unconditionally good for soci-
ety.
The post-growth perspective provides the back-drop for my research. It
often disappears into the background, but setting this stage is important for the
reader to understand how I see fundamental aspects of this thesis, such as
sustainability, the economy, value, and human needs. The perspective outlined
below provides a coherent set of norms, logics, and beliefs about the economy
in relation to sustainability. It is in service of post-growth transformations that
I have undertaken this work.3 As such, it represents the desired future state of
the world that serves as a basis for my understanding of “sustainability”, “a
safe and just future for humanity”, and “improving the state of the world” in
this thesis.
The emergence of post-growth thinking since the 1960s has been in
response to a growing awareness of environmental crises and widespread
social and economic exploitation.4 As such, the post-growth research
community can be characterized as a sub-set of the larger sustainability
science community (Asara et al. 2015). I use “post-growth” as an umbrella
term to include any literature or initiative that explicitly takes a critical
approach to the growth-based economic paradigm.5 This includes a wide range
of interdisciplinary scholarship in the fields of degrowth, steady state
economy, eco-Marxism, bioeconomics, feminist economics, eco-feminism,
human ecology, critical geography, political ecology, ecological economics,
and social ecological economics, to name a few. Although there are

3
This perspective has also shaped the terms I use and the way I write. I have chosen to use
minimal jargon in my writing in order to make it as accessible as possible for a readership of
interdisciplinary academics and non-academic practitioners. That said, I never sacrifice accu-
racy, precision, or clarity for the sake of accessibility.
4
For an account of the emergence of post-growth thinking, see Parrique (2019, 171–207).
5
By “economic paradigm”, I mean the set of shared norms, assumptions, values, goals, laws,
rules, and economic structures that define a certain way of organizing the economy - similar
to how Göpel (2016) uses the term.

6
differences in the ways that authors in these fields approach the issue, they
share a common starting point in reframing the economy as a system of
provisioning that should meet everyone’s needs without requiring economic
growth, due to ecological limits.6 It is a perspective that sees the economy as
a system embedded within a wider society, which is itself embedded in the
Earth’s biosphere.
The post-growth perspective explicitly assumes that there are hard limits to
the decoupling of economic growth from environmental impact, because there
are hard limits to the substitutability of human-made capital for nature (Hickel
and Kallis 2020). For instance, in response to the global issue of rapidly
degrading soils, a green growth advocate might claim that human capital can
substitute for nutrient-rich soil by simply adding the nutrients needed to grow
food in the form of fertilizers. A post-growth advocate, on the other hand,
would point out that there are limits to how much fertilizer can be produced,
as well as limits to the uptake of fertilizer by degraded soils. Therefore, it is
best to protect soils and avoid degrading them in the first place, by reducing
waste and production where possible, and by using more regenerative
agriculture methods.
The limits to decoupling and economic growth mean that inequality and
ecological problems are tightly connected (Hickel 2019). Whereas green
growth advocates claim that “inclusive economic growth” will address
poverty and inequality (Spash 2020b), post-growth alternatives must
explicitly deal with issues of power, agency, and the distribution of access to
essential resources (Paulson 2017). When limited resources accumulate in the
hands of a few actors, then it necessarily means less for other actors - what
Hickel (2019, 54) refers to as “artificial scarcity”.
While it is impossible to change the biosphere to accommodate the endless
expansion of economic activity, it is possible to organize our economies in
ways that do not require growth (Göpel 2016). An important starting point for
this is to move away from the hegemonic ideology of economic growth as
natural, necessary, and good (Paech and Liebelt 2012; Washington and
Twomey 2016; Kallis et al. 2018). Doing so allows for the acknowledgement
that there are many diverse ways of organizing the economy and its use of
nature (Gibson-Graham, Cameron, and Healy 2013). Societies around the
world and throughout time have used a wide variety of types of ownership,
money, markets, trade, barter, and sharing in order to meet their needs for
goods and services (Graeber 2014).
Moving away from the ideology of economic growth requires a re-
examination of the purpose of the economy. From a post-growth perspective,
the purpose of the economy is to help people meet their needs (Göpel 2016;

6
It is important to note that intentional non-growth or shrinking of economies that do not need
to grow, is different from a recession, which is the lack of growth in a system that requires
growth (Kallis 2018, 9).

7
Magdoff and Foster 2011). Human needs are finite and universal, yet there are
myriad diverse ways of satisfying those needs (Max-Neef, Elizalde, and
Hopenhayn 1991). Economic activity is not always a good way of satisfying
needs (e.g., the need for affection) (Ibid). Money may facilitate or inhibit
wellbeing (Ibid). For example, when money is spent on junk food, fast fashion,
and manipulative advertising, it often generates profit and GDP growth, but
there are negative impacts on people’s wellbeing. In contrast, many things that
increase wellbeing do not require money, such as spending time with loved
ones or going for a leisurely walk. This means that there is only so much that
economic activity can contribute to wellbeing. Once a certain level of material
security is reached, there are diminishing marginal social benefits of economic
growth, beyond which it can do more harm than good (what Daly (1996) refers
to as “uneconomic growth”).
Therefore, from the post-growth perspective, wellbeing (or welfare) should
be pursued and measured directly, rather than assuming that money and
consumption are good proxies for wellbeing (D. W. O’Neill 2012). This
implies redefining notions of success, prosperity, and value (Jackson 2017).
From a post-growth mindset, value comes from how well something satisfies
needs (i.e., use value), rather than how easily it can be exchanged for
something else (i.e., exchange value) (Magdoff and Foster 2011). Economic
activity is reframed as a means to meeting broader social ends (Daly 1977).
Crucially, an individuals’ health and happiness are dependent on how healthy
their surrounding social-ecological community is and vice-versa.
This is not to say that economic activity should decrease everywhere.
Context matters. As mentioned in the Introduction, many people do not
currently have access to basic resources, while others have been consuming
more than they need (Hickel 2017b). Therefore, in a sustainable post-growth
transformation, some people will need to consume more, while others will
need to consume less in order for everyone to have a reasonably comfortable
existence within the limits of the biosphere (Ibid). This is why it is always
important to keep inequality in mind in post-growth research and practice.
Both social and ecological justice are at the heart of the post-growth perspec-
tive.
Proposals for interventions and policies are based on principles of demo-
cratic decision-making, material sufficiency, sharing and reuse of resources,
and local production and consumption; but also on the diagnosis of specific
pathologies. Researchers have an important role to play in terms of formulat-
ing design principles for systemic change, translating them to specific con-
texts, warning of end-of-pipe “solutions”, and creating transparency along the
way (Pirgmaier and Steinberger 2019, 12).
Towards this end, the development of new theories for analyzing and un-
derstanding the economy is of vital importance. Institutional forms, in partic-
ular, play a key role in formulating political economy possibilities for the post-
growth era (Koch and Buch-Hansen 2020). Therefore, theories are needed that

8
offer a better understanding of how different economic institutions enable and
constrain actors’ behavior in more or less sustainable ways.

Motivating tension
Post-growth researchers have identified many drivers of the global sustain-
ability crisis, as well as many interventions. Richters and Siemoneit (2017a)
conducted a review of the relevant literature in order to categorize all of the
factors that have been identified as drivers and imperatives of economic
growth (from both pro-growth and post-growth perspectives). They grouped
the factors into the following five categories: 1) Money, interest and credit;
2) Technical progress, innovations, and resource consumption; 3) Politics,
states and their institutions; 4) Personal reasons (striving for more, social
pressure, accumulation and inequality); and 5) Profits, competition and capital
accumulation. These, then, can be seen as the key challenges that must be
addressed in post-growth economic thought.
Much attention has been paid to the first category of money, interest, and
credit (e.g., Farley et al. 2013; Hornborg 2017; Richters and Siemoneit
2017b). There is a lively ongoing discussion about how to change technology
and innovation (especially in the degrowth literature), as evidenced by the
special volume of the Journal of Cleaner Production on “Technology and
Degrowth” in 2015. Likewise, much energy has been spent on developing
alternatives at the level of politics, states, and their institutions (e.g., D. W.
O’Neill 2012; Verma 2017; Ferguson 2018), as well as understanding the
transformations that must happen at the personal level (e.g., Kasser and Kan-
ner 2004; Schor 2010; Alexander 2015). 7
However, when it comes to the fifth category of profits, competition, and
capital accumulation (highlighted in Figure 18), this area of research is rela-
tively underdeveloped (Pirgmaier and Steinberger 2019). As Pirgmaier points
out, the post-growth economy is sometimes presented as a “pathway to sus-
tained, healthy profits” while others claim that growth is a structural impera-
tive of capitalism and is thus at odds with profitability (Pirgmaier 2021, 8).
The gap between these two stances arises from the lack of clarity around how
profit-seeking is linked to economic growth, as will be explored in more depth
in the literature review.

7
Of course, there are also efforts to combine these different solutions in different ways, such
as Kallis (2018). Parrique (2019) also explores different combinations and timings of policy-
interventions for transitioning France to a degrowth pathway.
8
I created this diagram based on the growth imperatives described in Richters and Siemoneit
(2017a). The yellow oval encompasses the aspects directly related to the category of profits,
competition, and capital accumulation. The arrows in this diagram simply show direct connec-
tions between the different themes of post-growth research. It is not a causal loop diagram.

9
 Figure 1: My focus in the larger context of post-growth research
Before proceeding, it is important to be clear about what I mean by the
words “profit”, “business”, and “market”. The field of economics refers to
several different types of profit. Throughout this thesis, I will use the
accounting definition of profit, whic refers to the financial surplus that remains
after business expenses have been paid from the total revenue generated.9 I
use this broad definition of profit because both reinvested profit and residual
profit (that which is leftover after profits are reinvested) are important for the
purposes of this analysis. The opportunity costs included in the even broader
definition of “economic profit” are not an important consideration for the pur-
poses of this thesis, as the focus is on slowing down consumption, production,
and inequality, rather than getting as much of a return on investment as possi-
ble.
I define business broadly as an entity that generates most of its revenue
through commercial activities (i.e., the sale of goods and services) (Oxford
Dictionary 2020a). I use “firm”, “company”, and “enterprise” as synonyms
for business throughout the thesis. I define “market” as a complex of social,
cultural, and legal institutions that enable people and businesses to trade by
purchase and sale - inspired by Satz’s definition (2010, 16).
It is perhaps worth noting that businesses and markets do not necessarily
have to be part of post-growth economies. However, because they are
currently the main channel through which production happens in most
economies, post-growth models and visions of the future must address how
businesses and markets should be transformed or replaced by some other
means of production in order to allow for sustainable provisioning (Nesterova

9
It is worth clarifying for the interdisciplinary readership of this thesis that employees’s salaries
are not paid from a company’s profits. Wages and salaries are considered business expenses
and are, thus, accounted for before profit is calculated.

10
2020). The issue of how mainstream business and markets could be trans-
formed or replaced for post-growth economies is currently ambiguous in the
bulk of post-growth literature, as will be discussed below and in the literature
review.

A driver of the problem is identified: Profit-seeking

Various authors in the post-growth literature have explained how business
drives larger sustainability crises.10 When companies seek profit, they usually
need to expand production and prompt more consumption through advertising
and other means (Schnaiberg, Pellow, and Weinberg 2002). In this way,
profit-seeking drives economic growth and environmental damage (Jackson
2017; Kallis 2018). There is also a focus on seeking cheaper raw materials and
labor and a tendency to produce more and cheaper products, rather than dura-
ble and fewer products (Moore 2014; Pirgmaier 2021). Thus, the owners of
the means of production in capitalist economies receive profits at the expense
of workers and ecosystems (Magdoff and Foster 2011). Capital accumulates
and this further drives growth (Foster 2014). These authors are quick to point
out that ”(t)he moving and motivating force of capitalism is the never-ending
quest for profits and accumulation, and […] because of competition,
companies are compelled continuously to increase sales and to try to gain
market share” (Magdoff and Foster 2011, 41). Due to these dynamics, ine-
quality and environmental crises have the same roots in an economic system
that is propelled by the profit motive and that delivers economic gain to some
at the expense of others - including non-human nature (Moore 2014).
This partially explains how business drives larger sustainability dynamics.
But it does not clarify what it is about businesses that compels them to seek
profit; whether all businesses are naturally profit-seeking or if they are able to
change.

The solution does not solve the problem: Cooperatives, social

enterprises, and family-owned businesses
Many authors have highlighted that business ownership plays a key role
because the ownership of firms will either concentrate wealth and drive
growth, or distribute the wealth and allow for a non-growing economy (Lange
2018). As such, cooperatives are often seen as the main way to transform the
market and business, because they involve democratic ownership (Lange
2018).
However, the cooperative solution does not address the issue of profit-
driven producer cooperatives, such as large cooperatives of dairy producers

10
Although this is addressed by several different strands of the post-growth literature, the eco-
Marxian scholars offer the most in-depth analyses (e.g., Foster 2014; Magdoff and Foster 2011;
Moore 2014). This is a point that Pirgmaier’s (2018; 2019) work highlights.

11
(e.g., Land O’Lakes in the US and Arla in Europe). Likewise, it does not take
into account that worker cooperatives can be highly profit-motivated (e.g.,
Mondragon in Spain). Indeed, many different types of cooperatives can be
profit-driven (Chaddad and Cook 2004). This fact is largely overlooked in the
post-growth literature. Worker ownership is often referred to as non-capitalist
(e.g., Gibson-Graham, Cameron, and Healy 2013), but it can be argued that
an economy predominately composed of worker cooperatives is still capitalist
(albeit with a greater number of capitalists). The Oxford Dictionary (2020b),
for instance, defines capitalism as “An economic and political system in which
a country's trade and industry are controlled by private owners for profit,
rather than by the state”. An economy of worker cooperatives is still a market
economy of privately-owned businesses that can operate for the profit of the
private owners. Sticking only to the cooperative model might democratize the
profit motive, but it does not necessarily take us closer to a sufficiency-based,
post-growth economy. It largely resolves the inequality issue – but not the
issues of consumerism, profit-seeking, and economic growth.
Social enterprises are also frequently mentioned as a solution (e.g., Johan-
isova and Fraňková 2017). However, “social enterprise” is a rather informal
category open to interpretation that can include many different kinds of busi-
ness, including profit-driven businesses (Reiser and Dean 2017). In other
words, the term “social enterprise” provides limited usefulness for post-
growth scholars and practitioners (Houtbeckers 2018).
Family-owned companies are sometimes floated as a solution (e.g., Trainer
and Alexander 2019). Yet, a family-owned business or a partnership that starts
out small and accountable to its local community might, over time, grow into
a multinational company with little accountability and a large ecological foot-
print. Some of the largest companies in the world that generate billions of
dollars in annual revenue are wholly or mostly family-owned, including:
Mars, Inc. food company, Koch Industries, Cargill, Inc., Deloitte, and
Pricewaterhouse Coopers (Chloe Sorvino 2018). Such large companies have
significant environmental impacts, which increase as their sales expand.
Furthermore, in delivering profit to their high net-worth family-owners, these
businesses contribute to inequality.
In other words, there is a mismatch between the problem identified and the
solutions proposed. Profit-driven markets and privately-owned business are
identified as problematic; and the solutions of cooperatives, social enterprises,
and family-owned firms do not address the profit-driven nature or private
ownership of firms. This indicates an important weakness in the analysis. Fur-
thermore, it is unclear in these proposals how cooperatives and social enter-
prises would scale up to transform or replace profit-driven markets in post-
growth compatible ways (Pirgmaier 2021). I surmise that post-growth pre-
scriptions for business and markets are scattered because the analysis is
missing a deeper understanding of the specific institutional aspects of business
and how they drive and interact with larger trends.

12
A potential solution is overlooked: Not-for-profit businesses and
markets
Perhaps the post-growth literature has not found suitable solutions to the
problem of profit-seeking because, when it comes to to business and markets,
it takes many of its cues from neoclassical economics. Neoclassical ap-
proaches take for granted that businesses should seek profit and that the profit
motive is the engine of the economy because it promotes investment, innova-
tion, efficiency, wealth creation, and employment. These assumptions have
their roots in intellectual work done by the early political economists of the
18th and 19th centuries, like Adam Smith and his treatise on The Wealth of
Nations (2009). These same assumptions can be seen in today’s mainstream
economics textbooks (e.g., Jones 2018; Krugman and Wells 2018). As Bor-
zaga and Tortia (2007, 24) put it:

“Economic theory has devoted little attention to forms of enterprises, other than
for-profit or investor-owned, and even less attention to the forms of enterprises
not interested in making or maximising profits. The view of economic systems
which result from the traditional approach is narrow and simplistic.”

Yet, not all businesses are profit-seeking or privately-owned. Here, I turn

to a topic in the field of nonprofit studies, which has been largely overlooked
by the post-growth research community: not-for-profit business.11 It is not of-
ten acknowledged in discussions about business and the economy that not-for-
profit organizations can operate as businesses and, thus, businesses do not
have to be for-profit. This insight breaks with conventional wisdom and opens
up the space for a different perspective on the economy that might be quite
useful for post-growth purposes.
In order to appreciate the implications of this new perspective, one must be
equipped with an understanding of the distinction between for-profit and not-
for-profit legal types. (As the thesis frequently contrasts these two types of
business, I will often use FP and NFP as abbreviations for the sake of clarity
and conciseness). In essence, this distinction is a legal difference in rights and
responsibilities. For-profit firms are allowed to have the purpose of private
financial gain while a social benefit purpose is baked into the not-for-profit
legal structure (Hansmann 1980). As such, the private distribution of profit
and a financial gain purpose are precluded in NFP forms in order to keep these
organizations focused on social benefit - this is known as the non-distribution
constraint (Estelle James and Rose-Ackerman 1986). Important to note here,
is that NFPs can make a profit, but they are precluded from privately distrib-
uting it. In this way, the for-profit versus not-for-profit aspect of business

11
There is a substantial amount of research on not-for-profit business (also known as enterpris-
ing nonprofits, commercial nonprofits, and not-for-profit enterprises) (e.g., Borzaga and Tortia
2007; Dees 1998; Patten 2017; Roeger, Blackwood, and Pettijohn 2012; Salamon et al. 2013;
Salamon and Anheier 1997).

13
structures has implications for whether businesses are profit-driven or not. In
Paper 3, I use the term “relationship-to-profit” to refer to the legal distinction
between for-profit and not-for-profit forms of business, as it is more precise
than other common terms, such as “legal form”, “legal type”, or “organiza-
tional type”.12 I will use relationship-to-profit to refer to this legal distinction
hereafter.
Cooperatives and social enterprises can be regulated either as for-profit or
not-for-profit, depending on their incorporation structure (Borzaga and Tortia
2007, 29). For instance, worker cooperatives are most often for-profit because
they allow for private distribution of profit (John Pencavel and Craig 1994),
while in Hinton and Maclurcan (2016), we argue that consumer cooperatives
fit the legal description of not-for-profit (and indeed credit unions are regu-
lated as NFPs in the US). 13 Along similar lines, many social enterprise models
are for-profit, like the Benefit Corporation in the United States (Michele
Berger 2015); while others are not-for-profit, like the Community Benefit So-
ciety in the United Kingdom (NI Business Info n.d.).
Not-for-profit businesses are different from traditional nonprofit organiza-
tions in that they are mostly or totally financially self-sufficient through the
sale of goods and services, rather than depending on charitable contributions
(Hinton and Maclurcan 2017). 14,15 Scholars have noted that the not-for-profit
sector is increasingly gaining income from business activities in many parts
of the world (e.g., Roeger, Blackwood, and Pettijohn 2012; Salamon et al.
2013; Salamon and Anheier 1997). Hinton and Maclurcan (2016) documented
a number of not-for-profit businesses operating at different scales, in a wide
diversity of economic sectors and geographical contexts. To make this busi-
ness type more concrete for the reader, some diverse examples of not-for-
profit businesses include: HomeGround Real Estate in Sydney, Australia
(HomeGround Real Estate 2020); the global software developer, Mozilla Cor-
poration (Mozilla 2020); the YHA youth hostels in the United Kingdom (YHA

12
I cover the added value of this term in more detail in the Synthesis chapter.
13
The only way members can capture the value of the cooperative’s activities is by buying its
goods and services (Ruiz-Mier and van Ginneken 2006). Consumer cooperatives and credit
unions meet the legal definition of NFP, because the profit distributed to consumers will never
be more than a fraction of what the consumers have spent into the company via purchases
(Hinton and Maclurcan 2016). The “dividends” from consumer cooperatives are best thought
of as refunds, rather than actual dividends for private financial gain.
14
There is no legal difference between “not-for-profit” and “nonprofit”. But I prefer the term
“not-for-profit” when referring to business, as it more clearly articulates the potential to be a
business and generate profit, but not as an end in itself. It also mirrors the term “for-profit”,
allowing for a nice level of conceptual clarity.
15
In Hinton and Maclurcan (2016; 2017), an NFP is considered to be a business if it generates
at least 50% of its revenue from the sale of goods and services.

14
2020); the ASU Law Group in Arizona (ASU Law group 2020); and Folksam
insurance in Sweden (Folksam 2020).16
Due to the fact that businesses can be not-for-profit, it also possible to im-
agine markets that are predominately composed of not-for-profit businesses.
Without a financial gain purpose in firms or the private distribution of profit,
a predominately not-for-profit market economy would have quite different dy-
namics than a for-profit market economy (Lux 2003). In fact, because for-
profit business is a defining feature of the capitalist economy, a not-for-profit
market economy represents an alternative to both the capitalist market econ-
omy and the state-planned economy (Hinton and Maclurcan 2017).17 For ex-
ample, in Hinton and Maclurcan (2016), we developed the Not-for-Profit
World conceptual model in order to explore this possibility.
In addition to describing a different kind of economy, the counterfactual of
a not-for-profit market economy provides an alternative lens through which to
understand the current economic paradigm and its sustainability crises. This
counterfactual highlights the fact that most economies (including the global
economy) are currently organized in a predominately for-profit way, but that
they do not have to be.
Our work in Hinton and Maclurcan (2016) takes an important step in the
direction of explaining how and why different types of business and markets
can be expected to drive different kinds of dynamics in relation to sustainabil-
ity. However, the explanation is lacking a clear identification of the specific
institutional elements and arrangements in the for-profit economy that are
problematic for sustainability, as well as an account of the causal mechanisms
that explain how and why they are problematic and, thus, how not-for-profit
markets would be different. A deeper exploration and better analytical tools
are needed.

Summary
The post-growth perspective and motivating tension presented above have
informed my research questions, shaped my literature review, and guided my
theory-building process. In summary, the post-growth perspective adheres to
the idea that the purpose of the economy is to help people meet their needs
within the limits of the planet’s biosphere. Due to the lack of evidence of
sufficient decoupling of economic growth from environmental impacts,
economic institutions must be organized in a way that does not drive or require
16
Many more examples of not-for-profit businesses can be found in Hinton and Maclurcan
(2016), as well as at the Solidarity Economy Mapping Project and the related mapping initia-
tives on their websites: https://solidarityeconomy.us; http://www.solidarityeconomy.eu/susy-
map/; and http://www.ripess.org/working-areas/mapping-panorama/?lang=en
17
I will use the terms capitalist economy and the for-profit economy interchangeably in the rest
of this thesis, as a capitalist economy is a market economy in which businesses are operated in
order to deliver profit to private owners (Jones 2018).

15
constant expansion of production and consumption. The main aim of post-
growth research is to identify ways of organizing society and the economy
that can provide for everyone’s needs without driving or requiring growth
(e.g., Kallis 2018; Victor 2019). In this way, economic growth, inequality, and
ecological sustainability are all tightly connected.
Much of the post-growth literature highlights profit-seeking as
problematic, but fails to offer adequate solutions for how current profit-
seeking businesses and markets can be transformed or replaced to align with
social and ecological sustainability. The literature on not-for-profit business
reveals that not all firms are profit-seeking, but these types of business are
largely overlooked in the post-growth literature. This thesis is an effort to
bridge these bodies of literature and bring these insights together in ways that
can more effectively inform post-growth theory and practice.

16
Research Aim and Questions

Aim
In this dissertation, I aim to clarify the role of business, markets, and profit
in sustainable economies, in terms of their institutional elements and systemic
consequences, from a post-growth perspective. My specific focus has been on
the system-wide sustainability implications of how business relates to profit,
particularly in terms of the formal and informal institutional arrangements of
business and markets.

Research Questions

The overarching research question guiding this investigation is:

How does the relationship between business and profit affect social and
ecological sustainability?

In order to answer this larger question, the following more specific questions
have been developed:

Research question 1: What are the necessary and sufficient conditions for
socially and ecologically sustainable profit?

Research question 2: How do businesses relate to profit?

Research question 3: How does relationship-to-profit affect social and eco-

logical sustainability?

Research question 4: How can relationship-to-profit be understood in the

context of other approaches to sustainable business?

17
Papers

Paper 1: Sources and Limits of Profit

Hinton, J.B. “Limits to Profit? A conceptual framework for understanding
profit and sustainability.” Manuscript to be submitted to Ecological Econom-
ics.

Paper 2: Means and Ends

Hinton, J.B. and Cornell, S.E. “Profit as a Means or an End? An analysis of
diverse approaches to sustainable business.” Under review for Journal of
Cleaner Production.

Paper 3: Fit for Purpose

Hinton, J.B. 2020. “Fit for Purpose? Clarifying the critical role of profit for
sustainability.” Journal of Political Ecology, 27 (1): 236- 262.

Paper 4: Dimensions of Business

Hinton, J.B. “The Five Dimensions of Post-Growth Business: Putting the
Pieces Together.” Under second round of review for Futures.

18
Research Approach: Theoretical synthesis

What guides a researcher in constructing knowledge about the world? It

largely depends on how they define reality and what can be known about it.
In interdisciplinary research communities, it is important to clearly state one’s
ontological and epistemological foundations in order to avoid misunderstand-
ings and misinterpretations of one’s work. This is particularly necessary when
developing social theory for a field as interdisciplinary as sustainability sci-
ence.
In this chapter, I offer a description of the critical realist underpinnings of
this thesis. An overview is then offered of how I went about using a systems-
informed institutional economics approach to build theory and how I em-
ployed different types of causal inference to construct my explanations. I de-
scribe the iterative process of developing the relationship-to-profit theory pre-
sented in this thesis. The chapter ends with a reflection on some of the limita-
tions and challenges of this approach.

A critical realist ontology and epistemology

This work is based on a critical realist ontology, which acknowledges that
“there exists both an external world independently of human consciousness,
and at the same time a dimension which includes our socially determined
knowledge about reality” (Danermark et al. 2002, 5–6). The latter consists of
social structures such as norms, goals, aspirations, rules, and laws. Intangible
social structures, like the goal of growing a nation’s GDP, have real impacts
on the non-human world and are, thus, real themselves.
Critical realism acknowledges that patterns of human behavior co-evolve
with the social (and ecological) structures within which people live (Daner-
mark et al. 2002). Social structures enable and constrain how individuals or
organizations behave; and in turn, agents either reinforce or transform the so-
cial structures within which they act (Ibid, 181). As people and organizations
pursue goals, their actions have an impact on natural resources, ecosystems,
and physical infrastructure.
This co-evolution of structure and agency over time implies the need to
take a historical perspective, which acknowledges that the current patterns in
social systems have come about as a result of larger historical processes. For
instance, the capitalist way of organizing economic institutions is a relatively

19
recent phenomenon in the larger history of human experience and should not
be taken for granted as right or natural (Heilbroner 1999).
The incredible number of factors involved in sustainability issues, as well
as the interactions between the factors over time, also implies a complexity-
oriented, rather than a deterministic worldview. Given the complexity of the
world, the role of science is to enable people to better understand, plan,
prepare, design, create, respond, and co-evolve with the complex world, rather
than to control it.
Researchers use concepts and heuristics to break down the complexity of
reality in ways that are useful for answering their research questions. The same
is true for the way sustainability researchers conceptualize “the social” and
“the ecological”. Critical realism allows me to acknowledge that human soci-
eties are embedded in ecosystems, but also that human societies have unique
characteristics that ecosystems do not. This implies that sometimes it is useful
to conceptualize a system as social-ecological, in order to maintain conceptual
clarity around the fact that the social and ecological aspects of reality are
deeply intertwined (Berkes and Folke 2002), while at other times it is useful
to distinguish between the social and ecological aspects of a system. While I
believe that a sustainable economy treats the world as a deeply intertwined
social-ecological system, I often conceptualize the social and ecological as-
pects of reality separately in this dissertation. This allows me to focus on the
ways in which the economy, as a social system, is misaligned with ecological
limits. It is important to emphasize that this conceptualization does not mean
that I see the social and ecological as separate in reality.
This critical realist ontological stance has important epistemological impli-
cations because this stance means that knowledge is socially and individually
constructed. What we know about the world depends on how we conceive of
it, so changes in our conceptualizations can yield new insights – for instance,
broading the concept of business to include not-for-profit business allows us
to see for-profit business in a new light (Vatn 2017, 36). Furthermore, because
the knower shapes the knowing and vice-versa, any research is an intervention
(Midgley 2000).
My research is explicitly action-oriented in that I hope the knowledge, un-
derstanding, and insights that I have gained in this research journey can help
make sustainability-oriented change happen more quickly and more effec-
tively. I started this work by explicitly calling into question something that is
often taken for granted: the compatibility of for-profit business with sustaina-
bility. As such, I am also calling into question the legitimacy of this organiza-
tional form. I am conscious that, just by having conducted, discussed, and
published this research, I am intervening in the system that I have been stud-
ying – hopefully in ways that transform existing economic structures to be
more socially and ecologically just. Indeed, my wish is that this research wid-
ens and informs the discussion about which kinds of approaches to business,
markets, and profit are compatible, or not, with sustainability. In doing so, I
recognize my positionality and that the choices and value judgements that I

20
have made in developing these ideas have been framed partly by my individual
and social background.

A systems-informed institutionalist approach to theorizing

Would a not-for-profit market economy be more sustainable than a for-
profit market economy? There is no data about the sustainability of not-for-
profit market economies. Indeed, the very concept of a not-for-profit market
economy is relatively new. Yet, as I described in the Background, there is
good reason to doubt the sustainability of the for-profit economy. The lack of
data and theory does not mean that new and critical questions about economic
institutions are unimportant for finding pathways to a more sustainable future.
Rather, it points to the need for new theories.
The post-growth perspective inherently broaches novel concerns that are
pushing at the edges of the research frontier. Thus, scholars must take intel-
lectual risks to develop better, more accurate theories on which to base future
efforts in understanding and shaping the world. This impetus is where new
schools of thought come from, such as systems thinking, sustainability sci-
ence, and ecological economics. These have all presented major challenges to
conventional approaches, but have been worth the risks involved in building
up new theory, as they allow us to see and examine the world from a more
accurate and relevant perspective, and to more effectively solve problems
from that perspective.
Meredith (1993) describes scientific work as an iterative cycle, from de-
scription, to building conceptual models, to explanation, to testing, and then
back to description. A better explanation is achieved each time around the
cycle, going deeper in the theory-building journey. The aim of conceptual
work is to build theory, defined as “a coherent group of interrelated concepts
and propositions used as principles of explanation and understanding” (Ibid,
7). Using Dubin’s (1969) five requirements for a theory, Meredith (1993, 7)
emphasizes the importance of explanatory power in distinguishing a theory
from a conceptual model or a framework, and clarifies that “a theory:

1. Allows prediction or increased understanding;

2. Is interesting (i.e.non-trivial);
3. Includes attributes or variables and their interactions;
4. Does not include ‘composite’ variables (i.e. variables which include a num-
ber of other variables, elements, or attributes which are undefined); and
5. Includes boundary criteria.” (emphasis in the orginal text)

There is no clear-cut methodology for developing new theory. Indeed, the-

ory is decisive for research to the extent that theory-building should not be
subordinate to methodological rules for how to conduct research (Danermark
et al. 2002, 1). Theory development is a creative act, but this does not imply

21
that the theorist draws theory from nowhere (K. G. Smith and Hitt 2007).
Rather the theory development process “uncovers, selects, re-shuffles,
combines, (and) synthesizes already existing facts, ideas, faculties, [and]
skills” (Koestler (1964, 120) quoted in Smitth and Hitt (2007, 577)).
This dissertation is a theoretical synthesis that involved reconceptualizing
and synthesizing existing knowledge and explanations using institutional
analysis, systems thinking, and social theory-building tools. I had no pre-de-
fined method for building this theory, and so in the interest of transparency
and validity, I describe my approach below.
Although PhD students in sustainability science are often encouraged to go
to the field to collect primary data as part of a case study research design, this
thesis builds on research I did before starting the PhD, in Hinton and Maclur-
can (2016; 2017). Therefore, this PhD can be seen as a second cycle in Mere-
dith’s (1993) iterative spiral of theory-building. In the How on Earth book
(Hinton and Maclurcan 2016), we undertook a full cycle in describing, mod-
eling, explaining, checking in with available empirical data, and even collect-
ing some primary data. For the reasons mentioned in the Background chapter,
more theorizing is needed at this stage.

Critical institutional economics

Institutional economics is well-suited for constructing new basic concep-
tual models to replace the old ones that are no longer fit for the real world
(William M. Dugger 1979). I have used a critical institutional economics ap-
proach to untangle the theoretical mess described in the Background chapter,
and to construct new ways of understanding business, profit, and markets in
relation to sustainability.
Institutions are systems of embedded social rules (Hodgson 2018). Institu-
tional economics then, is the study of the institutions that are tied to the
production and distribution of wealth, with a focus on the institutional
frameworks of economic activity (Ibid, 46). If the economy needs to be
organized in a different way to align with sustainability, as post-growth
analyses claim, then understanding economic institutions is a good place to
start.
Critical institutional economics, in particular, can provide a solid basis for
analyses that seek to identify institutions that are driving sustainability
problems, as well as to understand how the economy should change in order
to address those problems (Vatn 2017). From this critical perspective,
environmental problems are not simply accidental side-effects of production
and consumption, but rather systemic effects of existing dominant institutions
(Ibid, 36). As such, this approach explicitly brings into question the
naturalness and appropriateness of dominant economic institutions, allowing
for the re-conceptualization of mainstream and marginalized ways of
organizing economic activity. Such reframing and re-conceptualizing can
yield new insights about the relationship of the economy to sustainability

22
problems, and how those problems can be resolved via alternative institutional
arrangements (Ibid).

Formal and informal institutions shape each other

Institutionalists distinguish between formal and informal institutions. The
former consists of explicit, enforceable rules (such as laws and contracts),
while the latter consists of softer, implicit rules (such as social norms, values,
belief systems, and logics) (Stephan, Uhlaner, and Stride 2015). The
relationship between formal and informal institutions is important. Different
mixes of formal and informal institutions will be more or less appropriate for
achieving specific social and economic goals (North 1990). It follows that reg-
ulative institutions, such as laws and property rights, have a corresponding
purpose, logic, and set of social norms and beliefs (W. Richard Scott 2014,
62). The capitalist ideology and the goal of economic growth, for instance,
can be considered informal institutions; and free trade agreements are corre-
sponding formal institutions that serve the goal of growth and the ideology of
capitalism. In order to understand how formal institutions function, it is
important to also take into consideration the informal institutions upon which
the formal rules are based.

Institutions and actors shape each other

The institutional perspective emphasizes that human action cannot be
understood outside of its institutional context. As the rules of the game,
institutional structures enable and constrain actors (North 1990). While insti-
tutions guide and constrain action; actors create, maintain, and transform
institutions (Ibid). Actors change institutions in order to more effectively
pursue their aims and the changed institutions then impact those actors.
Incremental changes in institutions result from the feedback processes
between actors and institutions over time, leading to a constant state of insti-
tutional evolution (Ibid). This can be seen, for instance, in how successful
corporate lobbying results in a regulatory context that enables the corporations
to more effectively pursue profit, which may then allow them to lobby even
more.
To add to this complexity, the more that actors go along with existing
institutions, the more legitimacy those institutions have (W. Richard Scott
2014). Legitimacy is a “general sense or assumption that the actions of an
entity are desirable, proper, or appropriate within an institutional framework
of norms, values, beliefs, and definitions” (Ibid, 71). Thus, in order to be
perceived as legitimate, an organization’s goals, strategies, and structures
must be congruent with the values of the society within which it operates
(North 1990). For instance, a profit-seeking business has legitimacy in a cap-
italist society, which holds the beliefs that money is a sign of success and that
the profit motive spurs innovation. As societal values and goals shift in re-
sponse to changing conditions (like climate change), if actors do not adjust
their goals and actions accordingly, they risk losing their legitimacy.

23
 It is worth noting that, although actors’ behavior can accommodate, resist,
or change both the formal and informal institutions, various actors differ in
their power and ability to (re)produce, resist, or change their institutional con-
text (Philip A. Klein 1993). Therefore, power is always an important part of
understanding the interactions between actors and institutions. In particular,
institutional economists are concerned with how the concentration of power
can lead to an unjust allocation of resources (Ibid), which is also an important
post-growth concern.

Ends and means are socially defined

All human action involves some calculation and selection of means to
achieve socially defined ends (W. Richard Scott 2014, 82). For instance, the
goal of profitability for businesses is a socially defined informal institution
and businesses in a for-profit economy calculate and choose different means
to achieve that end. In addition to specifying valued ends, social contexts de-
lineate appropriate means; as Scott (2014, 83) says “… action acquires its very
reasonableness from taking into account these social rules and guidelines for
behavior”. This implies that in order to understand human action, it is im-
portant to understand means-ends connections, including the types of ends
pursued and the perceived appropriateness of means (Ibid). (This is what Pa-
per 2 deals with: profit as a means or an end).
Furthermore, what is “rational” or “right” is socially constructed, and is
encouraged and enforced via institutions (Vatn 2009). This means that
whether actors are acting rationally or not depends on how their social context
defines “rationality”. Neoclassical economices defines rational behavior in
terms of pursuing one’s own narrow (financial) self-interest, but that is not the
only way of defining rationality (Göpel 2016). The post-growth perspective
outlined above redefines rational behavior as that which allows for social and
ecological justice rather than in terms of financial self-interest. Thus, the in-
formal institutions of the post-growth perspective have very different
corresponding norms and incentives than a social context with financially-
based definitions of rationality. Likewise, this underlying logic can be ex-
pected to lead to very different ways of organizing business, markets, and
profit. In other words, different institutional arrangements will lead to
different outcomes (W. Richard Scott 2014).
Therefore, it is not a matter of getting institutions “right”, but rather finding
and creating institutions that generate the desired result – recognizing that the
“desired result” is also based on informal institutions itself and, thus, subject
to change (Vatn 2017). For the purposes of this investigation, the desired re-
sult is an economy that meets everyone’s needs without driving or requiring
the expansion of production and consumption.
With these insights in mind, it is advisable for models or visions of
sustainable economies to align these various aspects of institutions with each
other and with post-growth aims as much as possible. When the informal and
formal institutions of a society are aligned, their influence can be very

24
powerful in guiding and constraining behavior (W. Richard Scott 2014). When
they are not well-aligned or not widely supported by the members of society,
there is confusion and conflict (Ibid, 71). Post-growth theorists and organizers
should seek to avoid such misalignment in their models and strategies (recall
the motivating tension described in the Background). This is why the focus of
my analysis is not only on economic institutions themselves, but also on the
alignment of formal regulative institutions with the post-growth informal in-
stitutions outlined in the previous chapter.18
Figure 2 depicts a simple model of how formal and informal institutions
shape each other; how they guide and constrain actors’ behavior; and how
actors shape institutions, in turn.

Figure 2: How institutions interact with actors’ behavior

Rights and responsibilities in the economy

All markets depend on a complex of social, cultural, and legal institutions
(Satz 2010, 16). This complex includes regulative institutions that assign
rights and responsibilities. These types of institutions define what kinds of
actions various economic actors are allowed, encouraged, and required to
undertake, as well as which actions they are prohibited from undertaking
(Vatn 2017).
As such, the rights and responsibilities of business have important
consequences for the dynamics of markets and the economy as a whole
(Libecap 1986), as well as for the distribution of resources and the protection

18
Scott (2014, 60) further distinguishes between normative institutions, as the morally-
governed rules that define right and wrong and involve social obligation, and cultural-cognitive
institutions, which are the deeper constitutive rules that are taken for granted, such as widely-
held systems of belief and logic. I group the normative and cultural-cognitive into “informal”
institutions for the sake of simplicity and convenience in this thesis, while recognizing that there
are important distinctions between them and that both are fundamental to post-growth
transformations. Indeed, it is useful to keep in mind that some informal institutions (i.e.,
normative) are less deeply ingrained and are thus more changeable than others (i.e., cultural-
cognitive). The post-growth perspective represents a shift in both of these pillars.

25
of the biosphere (Vatn 2017). Therefore, the dominance of different legal busi-
ness frameworks in an economy can be expected to lead to different dynamics
at the level of the aggregate economy, having important consequences for
social and ecological sustainability. Due to the fact that markets can operate
on diverse institutional arrangements, the focus should be on specific types of
markets and not on “the market system” itself (Satz 2010).

Institutionalist methodology
Institutionalist methodology starts with the assumption that, because actors
respond to their institutional contexts, an understanding of institutional con-
texts offers important insights into ranges of expected or acceptable behavior
(William M. Dugger 1979). Yet, it is worth noting that institutionalists seek
to build models that describe and explain, rather than predict, because they
acknowledge that actors’ behavior is not fully determined by institutional
structures (Ibid).
An important method of institutionalist theorizing is the identification of
types of institutions and institutional arrangements (Andreas Dimmelmeier
and Heussner 2018). Institutionalists typically start their analysis “by
identifying one or a small group of institutions which they consider
particularly relevant for the event they want to explain, and from there they
build their explanatory edifice” (Ibid, 1). This means that the evidence on
which this theorizing is based comes in the form of information about institu-
tions, what Dugger (1979) calls structural evidence. Structural evidence is that
which gives knowledge about the structure of institutions. In the case of reg-
ulative institutions, such as legal business structures, this information is avail-
able in legal texts issued by governments and the research that deals directly
with these texts. For instance, the International Center for Not-for-profit Law
was an important source of information for this thesis when it came to the
basic institutional elements that distinguish for-profit organizations from not-
for-profits. Understanding the institutional structures within which actors are
operating allows one to make general qualitative predictions based on how
institutions guide and constrain their behavior, rather than specific quantita-
tive ones (William M. Dugger 1979, 905).
An institutional economist uses structural evidence to build a hypothesized
model or explanation that fits the set of human relations the theorist is trying
to explain (William M. Dugger 1979, 904). The explanatory power of an in-
stitutional economic theory can be determined via “contextual validation”,
which involves cross-checking different kinds of sources of evidence (e.g.,
case studies and historical data) to see if the institutional structures and out-
comes of the theorist’s model concide with the structures and outcomes in the
real world (William M. Dugger 1979, 906).
Institutional approaches can be especially fruitful for analyses that cross
typical scales of social organization, such as the world system, a society,
organizational fields, organizations, and individuals (W. Richard Scott 2014,
109). This perspective encourages scholars to think about the ways in which

26
institutions and behavior at the level of individuals and organizations
influence dynamics at the scale of markets, society, or the world system; as
well as how larger-scale institutions and dynamics influence individuals and
organizations in turn (Ibid). It is thus particularly useful for untangling how
different business types might drive different aggregate dynamics.

Systems analysis
There is a high level of complexity in social systems like the economy. In
this thesis, I use systems analysis tools to intellectually organize the complex-
ity of the economy into manageable bits in a way that also hones in on the
system’s core dynamics (Checkland 2000).
The systems perspective involves looking at the world as a network of
interconnected open systems. A system is defined as “a set of things—people,
cells, molecules, or whatever—interconnected in such a way that they produce
their own pattern of behavior over time” (Meadows 2008, 2). The aim of
systems analysis is to “uncover the endogenous sources of system behavior”
(Richardson 2011, 241). This is based on the idea that causal feedback loops
between variables drive the system’s behavior over time (Midgley 2000). A
feedback loop is present when a variable is affected by something it has an
effect on (either directly or indirectly). For instance, more chickens lead to
more eggs, which in turn lead to more chickens. Chickens here are both a
cause and an effect, because they are part of a feedback loop. Chickens and
eggs cause more of each other to come into existence over time.
There are two main types of feedback loops: balancing loops and
reinforcing loops (often called vicious or virtuous cycles) (Meadows 2008).
The chicken and egg example is a reinforcing feedback loop. More chickens
lead to more eggs and so on. This kind of feedback loop, if left unchecked will
result in the increase (or decrease) of variables at an increasing rate. A
balancing feedback loop, on the other hand, leads to more steady patterns of
behavior over time that stay within a certain range. There would be a balancing
feedback loop in the chicken population if a family of foxes were introduced
to the system. The foxes will eat some of the chickens, leading to fewer
chickens, which will lead to fewer foxes over time, as their food supply runs
short, which will allow the chicken population to grow again, which will allow
the foxes to eat more, leading to fewer chickens again. In this simple system,
the populations of chickens and foxes will oscillate over time, within a certain
range. Balancing loops often act as brakes in systems, slowing down the
impacts of reinforcing loops.
Causal loop diagrams (CLDs) are an important tool in systems analysis.
These diagrams can facilitate the analytical process and help keep an overview
of the interconnected causal relationships and feedback loops that drive a
complex system (Sterman 2009). They are therefore very well suited to the
purpose of theory-building and theoretical synthesis.

27
 One can also use these tools to try to understand and anticipate how
different interventions might influence the system’s behavior over time, which
is especially suitable for studies that are concerned with solving complex
sustainability problems (Sterman 2012). If one would like to understand how
business type drives economic growth, for instance, then one should identify
the key variables (such as business goals and property rights); the relationships
between them; and the core feedback loops. This would also allow for an ex-
ploration of how changing the institutional aspects of business might change
the dynamics of the economy. In this way, systems analysis can help to iden-
tify the points in the system where it might be best to intervene for change
(Meadows 1999).

Analytical framework
Combined, the post-growth perspective, critical institutional economics,
and systems analysis form the basis of my analytical framework (Figure 3).
This is the lens through which I have read the literature and the basic under-
standing upon which I developed the relationship-to-profit theory. I have used
this analytical lens in reading, consolidating, synthesizing, and building on
existing knowledge.

Figure 3 : Systems-informed institutional analysis for post-growth sustainability

Taken together, these analytical perspectives allow for a quite powerful and
effective understanding of the role of economic institutions in driving or alle-
viating sustainability crises. Causal feedbacks between economic institutions
and actors' behavior drive aggregate dynamics of markets over time, which
have important effects on society and the biosphere (Figure 4). This implies
that different institutional arrangements will have different implications for
sustainability and different degrees of (in)compatibility with post-growth
aims.
In mapping out the causal relationships of institutional arrangements, it is
possible to generate insights about how those arrangements drive system-wide

28
dynamics over time to be more or less sustainable. This can be done for dif-
ferent types of institutional arrangements, to explore different scenarios. Thus,
a critical systemic analysis of economic institutions can help to identify the
institutions that are compatible, or not, with providing for everyone’s needs
within the ecological limits of the biosphere.

Figure 4: Conceptual overview of the economy through a systemic institutional lens

In answering my research questions, this systems-informed, post-growth,
critical institutional perspective has guided me to look for:

• Institutional elements and configurations that might drive or alleviate

economic growth, inequality, and ecological damage via socially-de-
fined means and ends; rights and responsibilities; and constraints and
incentives.
• (Mis)alignment of formal and informal institutions with post-growth
aims.
• How the different aspects of the key institutional elements are (in)com-
patible with each other.
• Causal feedbacks between variables (at different levels) that drive the
global economy’s behavior over time, in relation to economic growth,
inequality, and ecological damage.

From a systems perspective, the persistence of patterns of sustainability

problems over time indicates that they are part of a systemic problem, rooted
in endogenous system structures (Richardson 2011). The global nature of the

29
problem suggests that the key variables driving the problem are also global in
nature, as widely-used organizing principles, rather than context-dependent
ones. Therefore, from the outset of this research, I have been focused on glob-
ally-relevant variables and dynamics.

Generating an explanation
In this thesis, I use the systems-informed institutional approach described
above to develop an explanation of sustainability-related phenomena. A key
part of any explanation is its causal claims. As this is a theoretical dissertation,
I find it important to give a brief overview of the types of causal inference I
use in this theory.
Causality can be said to have the following components: a distinction
between the In Factor and the Out Factor; and the In Factor has an observable
impact on the Out Factor in such a way that changing the In Factor would
change the Out Factor (i.e., an intervention on the In Factor changes the
outcome) (Pearl 2009). A critical realist would qualify this model of causation
by adding the concept of tendency (Danermark et al. 2002, 55–58) – the In
Factor tends to change the Out Factor. Therefore, an explanation offers a
description of how the In Factor tends to impact the Out Factor when
triggered. A strong explanation then will be built on strong observable
impacts, whereas weak impacts might lead to a weaker explanation. In cases
where observable impacts are not accessible for practical or ethical reasons,
counterfactuals can provide the intervention mentioned above, in order to
arrive at a causal judgment (Swedberg 2014, 117).
It is worth noting that causal power is a pre-requisite to causal mechanisms
(Danermark et al. 2002). Just as water can put out a fire (whether it is used to
do so or not), a for-profit business can deliver its profit to owners (whether its
managers choose to do so or not). This causal power is in itself significant
because it opens or closes a range of possibilities and, as mentioned above,
institutional theorizing is based on understanding how structures allow for
ranges of possibilities.
Danermark et al. (2002, 120–21) write about different modes of inference
that are used in order to make sense of social life: deduction, induction, ab-
duction, and retroduction. They highlight that, due to the intangible nature of
many social structures, causality in social systems “involves properties, struc-
tures and mechanisms that can only be identified through retroduction and by
means of abstract concepts and theories” (Ibid, 120-21).
In dealing with questions about what is and what ought to be, this disserta-
tion largely takes an abductive and retroductive approach. Abduction involves
reframing a phenomenon in a larger context, like reframing business strategy
and structure from a perspective that is skeptical of profit-seeking (Danermark
et al. 2002, 81). Reconceptualizing economic institutions via abductive infer-
ence has played a central role in this thesis. Retroductive approaches can pro-
vide “knowledge of transfactual conditions, structures, and mechanisms that

30
cannot be directly observed in the domain of the empirical” (Ibid, 81). This
can be done by using hypotheticals to explore phenomena such as what busi-
ness would need to be like to allow for a post-growth economy. I used a range
of intellectual tools to build the causal inferences and explanatory power of
the relationship-to-profit theory, as I will detail in the next section.

Theory-building as an iterative process

Many social theorists have described their theory development process as
iterative. Having studied a sample of such theorists, Smith and Hitt (2007)
surmise that most of them iterate between four basic stages: a motivating
tension or puzzle to be resolved; searching for the basic elements and initial
framework necessary to resolve the tension; elaboration to put the pieces
together in novel ways; and proclamation and presentation of the theory to
peers for review and feedback (Figure 5). This iterative process also describes
my theory-building experience.

Figure 5: Process of theory development

(Source: K.G. Smith and Hitt (2007, 586). Figure reproduced with permission of
Oxford Publishing Limited through PLSclear.)

In terms of practical steps, the search stage has involved reviewing litera-
ture for explanations and data relevant to my research questions. The elabora-
tion stage has involved mapping out, synthesizing, and building on the expla-
nations. In the proclamation stage, I used feedback from peers to help me iden-
tify strengths and weaknesses in the theory and its conceptual components.
Throughout this work, I kept coming back to the initial motivating tension to
refine and sharpen my research questions, as I gained new insights about what

31
to include and exclude from the theory. This is part of what systems thinkers
refer to as boundary critique (Midgley 2000). I explain each of these steps in
more detail below, followed by a discussion of the evaluation and validation
of this theory.

Search: Literature review

Guided by the analytical lens outlined above and the motivating tension
described in the Background chapter, I first read the post-growth literature on
business to see how it treats relevant institutional elements, such as business
ownership, goals and purpose, and relationship-to-profit. I was also examining
if and how the literature links these aspects of business to the larger dynamics
of economic growth, inequality, and ecological degradation.
I used my research questions and corresponding search terms to find rele-
vant literature in post-growth studies. I found the post-growth literature on
business to be quite small and scattered. I then embarked on a review of theo-
ries of the firm, sustainable business literature, and social enterprise litera-
ture19, to look for insights that I might be able to use in order to strengthen
existing post-growth understanding and explanations of profit, business, and
markets. I was searching for structural evidence of how different types of busi-
ness relate to profit and social-ecological sustainability.
When starting out in a new direction in the literature, I sought out literature
reviews, meta-analyses, and typologies, which could give me an overview of
a lot of literature at once; like Walker’s (2017) The Theory of the Firm: An
overview of the economic mainstream; Hardt and O’Neill’s (2017) “Ecologi-
cal Macroeconomic Models: Assessing Current Developments”; and Isil and
Hernke’s (2017) “The Triple Bottom Line: A Critical Review from a Trans-
disciplinary Perspective”. These allowed me to get an overview of bodies of
literature and identify particular areas that might be more useful.
I annotated the articles, books, and reports I read in terms of how they relate
to my research questions. I did so from a critical perspective – keeping an eye
out for how authors approach the institutional elements related to my research
questions (e.g., business ownership, distribution of profit, relationship-to-
profit). This naturally led me to identify areas of weakness, confusion, and
inconsistency in the literature; as well as important insights and knowledge
(which will be covered in the next chapter). I kept the annotated bibliography
in a spreadsheet with my notes about each piece of literature as well as key-
words, so that I could easily perform a search of all my notes. I wrote different

19
It is perhaps worth noting that these different bodies of literature overlap with one another in
many places. I have created these categories based on the language that the authors use to iden-
tify their research community, as well as in terms of the differences that are relevant to my
research questions. For instance, I distinguish between sustainable business literature and social
enterprise literature because the latter is more explicit about relationship-to-profit and business
purpose, even though this literature is typically grouped all together.

32
summary texts to put the most important aspects together in one place; for
instance, Theories of the Firm; Theories of Value; and Sustainable Business.
All variables in the relationship-to-profit theory come from this literature re-
view.

Elaboration: Synthesizing and building theory

While reading the literature, I used analytical tools to map out, synthesize,
and build on the explanations that I found. These are tools that are typically
employed in the process of building social theory, such as: conceptual maps,
frameworks, models, metaphors, categorizations, cross-impact matrices, ty-
pologies, ideal types, as well as causal loop diagrams (Meredith 1993;
Sterman 2009; Swedberg 2014). These tools enabled me to explore how vari-
ables relate to each other, to keep track of how the relationships and feedback
loops all fit together, to clarify what I might be missing, and to communicate
my analysis to others for feedback. The outcome of this elaboration process
can be seen in the conceptual framework of profit-seeking strategies and
sources of profit in Paper 1; the adaptation of Daly’s Ends-and-Means spec-
trum in Paper 2; the Venn diagram, ideal types, and causal loop diagrams in
Paper 3; and the framework and typology in Paper 4. Most of my conceptual
drawings will never meet the public eye, but nonetheless they played an inte-
gral role in developing an understanding of how the variables fit together.
Writing out the explanations also played an important part in the analytical
process, as it forced me to articulate the causal connections and dynamics in
even more specificity and clarity. I also kept a PhD journal, in which I would
write out ideas that were in the embryonic stage. It was through the process of
thinking, writing, and drawing out the relationships between variables that the
theory took shape.
When I fell into a gap in my knowledge, I looked for new literature that
could fill that gap. As I reviewed the literature and analyzed the variables and
the connections between them, I ended up examining several different aspects
of the problem at once, as well as building up several different pieces of the
explanation at once. This is why several papers contribute to answering each
research question – I wrote all of the papers simultaneously.
After I had established a conceptual model of how relevant institutional
elements create a range of acceptable behavior, I would go back to the litera-
ture to see if the evidence coincides with the expected outcomes in my model
(Dugger’s contextual validation). If not, then I went back to the drawing
board. Because my focus has been on explaining global sustainability phe-
nomena, I always sought contextual validation from national or international
level data, such as reports from the Organisation on Economic Cooperation
and Development (OECD), International Labour Organisation (ILO), and
United Nations Environment Programme (UNEP).

33
Proclamation: Peer review
Peer review20 and discussion has played an integral role in this process, as
is often the case in theory development (K. G. Smith and Hitt 2007). This
happened both via formal peer review of my work through journals, confer-
ences, and seminars, as well as in informal contexts in which I asked peers for
feedback on my diagrams and on drafts of my written explanations. These
reviewers were able to steer me toward useful literature, variables, terminol-
ogy, and connections that I had missed. In fact, the term relationship-to-profit
was suggested by an anonymous reviewer of Paper 3.

Tension: Boundary critique

Any good systems analysis involves thorough boundary critique, the pro-
cess by which a researcher chooses which variables to include in their analysis
and which to leave out (Midgley 2000). Boundary critique is an ongoing pro-
cess in building social theory. As more evidence, information, and ideas come
to light in the process of research, a theorist might choose to bring in new
variables, leave certain variables out, or re-frame a variable. Importantly, val-
ues and priorities play a key role in shaping what a researcher decides to bring
into or leave out of the analysis (Ibid).
Throughout this work, I have had to constantly make decisions about what
to include and what to exclude in order to create the simplest explanation that
does not lose its explanatory power (i.e., Occam’s razor). The motivating ten-
sion, my research questions, my analytical lens, and the global nature of the
problem have guided how I have drawn the boundaries of my analysis. In or-
der to keep my explanation from becoming unnecessarily complicated, my
main criterion for including or excluding a variable (or a relationship between
variables) is that it must be an essential part of answering the research question
at hand. For instance, I created several different iterations of the causal loop
diagrams featured in Paper 3. Different versions of the diagrams had variables
that are not in the final version, because I considered all relevant ideas I had
encountered in the literature (e.g., consumer debt, prices, unemployment, and
automation as drivers of growth, inequality, and environmental problems).
But I found that many of these variables added complexity to the explanation
without increasing the explanatory power of the model. Likewise, I checked
what would happen to the explanatory power if I took out a variable, using the
counterfactual reasoning described above. For instance, if I take the incentive
to supress workers’ wages out of the equation in Paper 3, the explanation of
inequality and wage stagnation falls apart. So it it must remain an endogenous

20
Peers here include both academic peers from business schools, organizational studies,
sustainability science, economics; as well as non-academic (practitioner) peers from businesses,
activist networks, and NGOs.

34
variable. Due to this boundary critique process, I had also many different ver-
sions of the frameworks presented in Papers 1, 2, and 4.
I intentionally used wider boundaries than typical economic approaches, in
order to keep a focus on environmental and social elements that are often left
out or marginalized in mainstream economics and business literature. Like-
wise, I used different boundaries than many sustainability analyses to bring in
specific elements of business and the economy that are often left out of that
body of research.

Evaluation and validation

A theory can be assessed in relation to its purpose (K. G. Smith and Hitt
2007, 581). The purpose of this theory is two-fold: (1) to provide a better ex-
planation of how profit-seeking drives sustainability problems, in terms of
more clarity, consistency, and coherence than those currently on offer; and (2)
to explore how business, markets, and profit ought to be in a post-growth
economy. In this vein, this theory is meant to spark democratic debates and
discussions about what kinds of economic institutions are needed in order to
transform or replace the current profit-seeking market economy for the sake
of sustainability. It is certainly not intended to be the final word on the matter.
There are several ways in which I evaluated the usefulness and explanatory
power of my theory: by cross-referencing it with empirical data; checking for
applicability to real-world examples; using counterfactuals; and peer review.
One key criterion that I kept in mind throughout the process is whether my
explanation generates new insights (Danermark et al. 2002, 148).
I triangulated between different kinds of literature – white papers, reports,
grey literature, and academic literature – in order to probe the connections
between theoretical explanations and empirical evidence. I also tested these
frameworks, models, and typologies by seeing how readily applicable they are
to a wide range of real-world examples. For instance, in the case of Paper 2, I
contemplated a range of business types, from a profit-driven shareholder cor-
poration to a local family-owned restaurant to a charity shop. This helped me
articulate the two indicators of profit-as-a-means, in terms of voluntary objec-
tives and financial rights. The charity shop is not allowed to pursue profit as
an end, due to its nondistribution constraint. The shareholder corporation ex-
plicitly declares its profit-seeking aims on its website. And the family-owned
restaurant might not have any explicit profit-seeking aims, but it can distribute
all of its profit to its owners in order to enrich them. The two institutional
indicators in Paper 2 helped to explain the difference in the ways these kinds
of companies approach profit.
I also used counterfactuals to test explanatory power. For example, in the
Fit for Purpose paper, I used the counterfactual of imagining how a for-profit
economic system might lead to inequality if owners did not accumulate
wealth. In the Dimensions of Business paper, counterfactuals were helpful in

35
testing whether a category should be its own dimension of business or in-
cluded in other dimensions. For instance, if business strategy was only an out-
come of incorporation structure, it would not need to be its own dimension.
However, there is evidence of many different combinations of incorporation
structures and strategies, so these are separate but interconnected dimensions
of a business.
Given the fact that the different aspects of this theory have stood the test of
critique by many of my peers from a variety of backgrounds, I feel confident
that it is useful and brings important explanatory power to the issue of how
dominant types of business in the market drive sustainability problems. Of
course further validation is needed, which can be achieved by applying rela-
tionship-to-profit theory in future studies to collect data and perform analyses
(which will be discussed at the end of the Synthesis chapter).
It is also worth noting that there is intrinsic scientific value in the reframing
of variables and relationships that are commonly taken for granted because it
pushes researchers to think differently about the problem, which can yield new
insights (William M. Dugger 1979). New theories can highlight the need for
new or better data. For instance, there is not very much data about the extent
to which the private distribution of profit contributes to inequality. There is
also not much data on the social and environmental impacts of NFP busi-
nesses, as distinct from FP businesses and charity-dependent nonprofits. Re-
lationship-to-profit theory makes the case for why collecting these kinds of
data is important, rather than collecting data according to the imperatives of
existing economic theories.

Limitations and challenges

As with any research, this theory-building process has its limitations and
challenges. Firstly, there is an inherent risk in institutionalist theorizing, as the
types and categories that are developed (like the ideal types of economies in
Paper 3) are done so at the epistemological level, which is subject to fallibility
(Andreas Dimmelmeier and Heussner 2018). However, it is precisely because
they are epistemological in nature that the conceptualization of different types
of institutions allows for the development of theory about possible transitions
from current dominant institutional types to alternative types (Ibid), which is
of paramount importance for post-growth research and practice. So it is a risk
that one must take.
Bridging several different disciplines has also been a challenge in this
work. There are tradeoffs between depth and breadth. In trying to grasp the
bigger picture, informed by several perspectives, I was unable to go deeply
into every corner of the literature. Because my review of the literature was
more exploratory than comprehensive or systematic, I may have missed some
important insights that could significantly weaken my theory (or conversely,
strengthen it). I might have missed some key search terms that would have

36
directed me to certain literature. Furthermore, because I was working only in
the English language, I might have missed important insights published in
other languages21. Although I started this thesis with a search far and wide for
answers to my overarching research question and felt unsatisfied with what I
found, I might have missed a theory or model that already exists and gives an
elegant answer. So much work is currently being done in the “sustainable
economy” space all around the world, including by non-academic actors and
in other languages, that it is impossible to keep up with it all. This is a risk of
any research that is situated on a rapidly developing frontier.
One of the ways I tried to reduce these risks was by sharing my ideas with
peers from diverse fields and presenting the ideas at conferences, seminars,
and non-academic events to get feedback (also from non-academic peers). In
some cases, I have asked peers who are more specialized in relevant fields if
I was missing anything essential and, indeed, they provided some important
leads for further reading, even during the last months of writing this thesis.
Another limitation of any research is the biases and positionality of the re-
searcher. I have dealt with this limitation both by getting feedback from a di-
verse range of peers, as well as by being transparent and explicit about my
post-growth assumptions, biases, and perspective.
A final challenge has been that this dissertation not only questions the eco-
nomic mainstream, but it also confronts widely-held norms and assumptions
in post-growth economic approaches to business, profit, and markets. This
means that I have not had any sort of research community that I can call a
“homebase” in which I can simply relax and stop being an advocate of my
own work. Perhaps this is an inevitable part of reframing institutions that have
been taken for granted for so long (as Smith and Hitt (2007) show the “advo-
cate” as one of the roles of the theorist in Figure 5).

Summary
To summarize, this thesis has been a process of consolidating and synthe-
sizing theory in order to build a more robust account of how key institutional
elements of business and markets impact social and ecological sustainability.
I have searched for structural evidence about the institutional elements of for-
profit and not-for-profit forms of business. I have identified causal feedback
loops between key variables that can explain the impact of for-profit firms on
social and ecological sustainability issues and how not-for-profit forms of
business might have different consequences. I have examined the institutions
and their related system dynamics to find possibilities for alternative causal
mechanisms and to better understand how they might play out.

21
For instance, I have been informed that work done by N. Luhmann, N. Paech, and J. Gebauer
in the German language is relevant to my work. But I do not read German, so I was not able to
use them in this thesis.

37
 Of course, some explanations are better than others due to evidence and
argumentation. Therefore, the benchmark I set myself for the answers to my
research questions is that they must provide a clearer, more consistent, and/or
more coherent explanation than those currently on offer in the field of post-
growth economics. In this case, my theory must better explain the unsustain-
able dynamics of the economy than the following:

• unsustainable business management;

• large or growing companies;
• shareholder corporations;
• non-cooperative business structures;
• market logic;
• inadequate regulations and taxes; and
• profit-driven market competition and capital accumulation.

At the least, my theory should at least address the important weaknesses of

these explanations, which are explored in the next chapter.

38
Literature Review: Untangling the relationships
between profit-seeking and sustainability

In this chapter, I offer a critical institutional analysis of how business and

profit are treated in the relevant literature, identifying some important weak-
nesses that this thesis addresses. I start with a brief overview of how post-
growth literature treats business and profit. I then offer short descriptions of
how theories of the firm, sustainable business literature, and social enterprise
literature address my research questions. In particular, I identify what I found
useful in these bodies of literature that fills important gaps in the post-growth
literature. The chapter finishes with an overview of the strengths and
weaknesses of these different bodies of literature and a discussion of
remaining weaknesses that the relationship-to-profit theory addresses.

Business, markets, and profit in post-growth literature

Businesses are at the heart of the global economy, so a sophisticated
theoretical understanding of the nature and structure of firms is essential for
understanding how the economy functions (Walker 2017). Therefore, post-
growth transitions should be based on a deep understanding of how businesses
are structured and how they operate – even if only to move away from the
dysfunction of business-as-usual.
Yet, the post-growth literature on business is relatively small, piecemeal,
and scattered (Nesterova 2020). These approaches largely overlook the regu-
lative dimensions of the firm, including relationship-to-profit and the right to
distribute profit. Instead, studies tend to focus on the size and geographical
scope of business (e.g., Jana Gebauer 2018; Trainer and Alexander 2019),
everyday practices (e.g., Schmid 2018), closed-loop production strategies
(e.g., Kopnina 2016), other-than-profit goals (e.g., Johanisova and Fraňková
2017), and governance (e.g., Johanisova, Crabtree, and Fraňková 2013). There
is often a focus on cooperatives, social enterprises, and new legal forms of
business, such as Benefit Corporations (e.g., Dietz and O’Neill 2013; Twomey
and Washington 2016, 140–41). Some authors also write about new concep-
tualizations of business such as sufficiency-based business (Bocken and Short
2016), rightsize business (Reichel and Seeberg 2011), and eco-social
enterprise (Johanisova and Fraňková 2017).

39
 The scholars who take into account the legal dimensions of the firm largely
focus on shareholder corporations as unsustainable and cooperatives as more
sustainable, based on the assumption that a more democratic ownership struc-
ture will result in better sustainability outcomes (e.g., Lange 2018). Some-
times, family-owned firms are promoted as post-growth-compatible (e.g.,
Trainer and Alexander 2019). This focus on the shareholder corporation as the
problem fails to address how other incorporation structures can also drive neg-
ative consequences for society and the environment. For instance, private
equity firms and venture capital, which are not publicly-listed shareholder
corporations, can also cause social and ecological harm. In the pharmaceutical
industry, for instance, medication prices have been raised in order to increase
returns to private equity firms (Gustafsson, Seervai, and Blumenthal 2019).
Part of the reason that business is treated in such a piecemeal way in the
post-growth literature is that the traditional frameworks and concepts provided
by microeconomics and organizational theories are not suitable for post-
growth purposes. Businesses are generally assumed to be for-profit, while not-
for-profits are seen as non-business organizations (e.g., Alchian and Demsetz
1972). Most post-growth economic approaches have inherited this dichotomy.
For example, Schmid (2018, 16) contrasts “nonprofit objectives” and “market
orientation” as being at opposite ends of a spectrum. In the article, Schmid
sometimes uses the word “market” as a synonym for profit-seeking and for-
profit business (e.g., “market-driven” on p. 18) and other times the author uses
it as a synonym for commercial organizations (e.g., “market-oriented” on p.
16). Yet, “for-profit” and “commercial” are very different organizational at-
tributes. For-profit describes the legal purpose, ownership, rights, and respon-
sibilities of an organization, whereas “commercial” refers to whether an or-
ganization engages in trade. This difference is important for understanding
how economies might be sustainable or not. However, there seems to be little
awareness that businesses can be NFP. This is demonstrated by the fact that
neither “for-profit” nor “not-for-profit” are mentioned anywhere in
Nesterova’s (2020) quite comprehensive review of post-growth approaches to
business - even though the author discusses the profit motive and profit max-
imization throughout the article. Thus, in most post-growth economic
thinking, businesses and markets are assumed to be for-profit.22 This is rein-
forced by the persistent concern expressed that as long as firms are profit-
driven, this might keep them from being strongly sustainable, sufficiency-

22
Johanisova et al. (2013) do use the terms “for-profit” and “not-for-profit”, but do not clearly
acknowledge the latter as a vehicle through which business can be undertaken. Rather, they
maintain the divide that business and the market must be for-profit and not-for-profits are char-
ities in the caring economy. In their concept of the “liminal zone”, they blur the distinction
between for-profit and not-for-profit legal types, which is not helpful for understanding how
the legal rights and responsibilities of a firm relate to profit. Lange (2018, 101) mentions that
“business types where profit-based payments are prohibited and foundations are compatible
with post-growth economies”, but there is not much more attention paid to this. As an excep-
tion, Hinton and Maclurcan (2016) is based on NFP business.

40
based, or focused on social benefit (e.g., Bocken and Short 2016; Johanisova,
Crabtree, and Fraňková 2013). If these authors were aware of NFP forms of
business, they would likely bring it up when discussing these concerns.
There also seems to be a widespread assumption in the post-growth litera-
ture that the only alternatives to capitalist forms of business are cooperatives
or state-owned businesses. Gibson-Graham et al. (2013) is a good example of
the type of confusion that I have often encountered in the literature, presuma-
bly due to the lack of understanding the institutional differences between for-
profit and not-for-profit legal types. On p. 14, the authors mistakenly say that
a not-for-profit company has shareholders – which is not accurate (either it
does not have shareholders or it is for-profit). On the same page, they catego-
rize this NFP company as “alternative capitalist”, while a cooperative of ma-
chinists (presumably a workers cooperative) is categorized as “noncapitalist”.
However, worker cooperatives involve private ownership and allow for profit-
seeking (which are defining features of capitalism) (John Pencavel and Craig
1994), whereas NFP structures do not (ICNL 2013). Therefore, the NFP busi-
ness fits into the noncapitalist category and the worker cooperative should be
categorized as alternative capitalist. This mix-up indicates a lack of under-
standing the ownership element of for-profit and not-for-profit structures, as
well as how it relates to capitalism. I am not attacking Gibson-Graham here.
They have done incredibly important work for the field of post-growth eco-
nomics that I have found enlightening. I am simply using this as an example
(one of many I found in the literature) of how confused the post-growth schol-
arship often is, when it comes to legal aspects of business structures and how
they relate to the aggregate economy.
There is also a lack of consistency in the post-growth literature when it
comes to key institutional elements of business. While many scholars are wary
of profit-seeking, some take profit-seeking for granted. Reichel and Seeberg
(2011, 4), for instance, assume that businesses must increase profit margins.
Likewise, Khmara and Kronenberg (2018); Upward and Jones (2016); and
Wells (2016) all take profit-seeking for granted and seem to think that it can
be compatible with post-growth economies. Dietz and O’Neill (2013, 146–48)
promote the idea of shared value in a steady state economy, which focuses on
creating economic value in ways that also creates value for society. Most of
this part of the literature does not clearly explain how profit-seeking and the
private distribution of profit to owners would not drive the growth of produc-
tion and consumption, or increase inequality, as other authors have claimed.23
In fact, much of the post-growth literature regarding business neglects the
ways in which firms drive large-scale trends, as well as the ways in which
firms are impacted by those trends (e.g., Earl 2017; Johanisova and Fraňková

23
Reichel and Seeberg (2011) propose that ecological allowance accounting can be used to
make sure that businesses stay “rightsize” and do not drive growth in material throughput on
the larger scale. Yet, they leave the issues of inequality and the private distribution of profit
unresolved.

41
2017; Schmid 2018). O’Neill et al. (2010, 94) mention that co-operatives,
foundations, and community interest companies “are not subject to the same
growth imperative as profit-maximising shareholder corporations”, but do not
explain why or how. Likewise, much of the literature on aggregate sustaina-
bility-related dynamics does not address how business drives those dynam-
ics.24
While profit-seeking is often acknowledged as a key driver of larger sus-
tainability dynamics, business is somehow largely left out of these discus-
sions. In the book, Degrowth: A Vocabulary for a New Era (D’Alisa, Demaria,
and Kallis 2015), a broad collection of post-growth thinking, the Growth entry
manages to explain economic growth without acknowledging a central role
for business and profit (Victor 2015). The entry discusses technology, GDP as
a measure of progress, commercialization, commodification, goods and ser-
vices, markets and investment, but only once mentions business and profit
(when describing Schumpeter’s concept of creative destruction). I found the
same issue in Gómez-Baggethun’s (2015) entry on Commodification, in
which there is a lot of discussion of “the market”, market values, market logic,
market-based instruments, market incentives, producers and consumers – yet
the roles of business, its institutional elements, and profit are left unexamined.
Although there is a strong focus on profit and investment in the Capitalism
entry by Andreucci and McDonough (2015), they mention firm only once.25
Who is making the profit and where are capitalists investing, if not in firms?
Likewise, what are markets without businesses? How does commercialization
and commodification come about without firms? Clearly, some essential
structural elements and processes are being neglected. I found the same prob-
lem in more recent works. For example, in the Routledge Handbook of Eco-
logical Economics (Spash 2017a), which is an impressive 525-page collection
of post-growth thinking, there is relatively little mention of profit or business
and the discussions that do happen are isolated from explanations of aggregate
economic and sustainability dynamics.26 Similarly, there is hardly any mention
of business in Farley’s (2016, 185) discussion of capitalism and the steady
state economy in A Future Beyond Growth – and, again, the main solution put
forward focuses on cooperatives, but with only a vague hint of how a steady
state economy would transform or replace the current profit-driven market

24
Lange (2018) and Hinton and Maclurcan (2016) are exceptions to this.
25
No mention of the synonyms: business, company, or enterprise.
26
According to the index, “profit”, “profit maximization”, and “surplus value” are discussed
only 5 times. Likewise, “business” and its synonyms (such as “enterprise”, “company”, and
“firm”) are discussed 13 times, 12 of which occur in two chapters: Eco-Social Enterprise and
Theory of the Firm. Again, this shows there is no discussion of business as a driver of larger
dynamics. For comparison, “property” and “private property” are discussed 46 times and
throughout the book.

42
economy: that capitalism should have a “shrinking role in a hybrid econ-
omy”.27 As Pirgmaier and Steinberger (2019, 8) point out, not only are mar-
kets, business, and profit largely overlooked in post-growth research, but some
ecological economists have actively discouraged the study of markets.
As such, there is no clear account of the central role of markets, business,
profit, and corresponding institutional elements in most post-growth theories,
even though the competition for profit has been identified as a key driver of
the problem. This indicates that new theoretical frameworks are required.

Theories of the firm

While reading the post-growth literature on business, I realized that I
needed to gain a better grasp of where current approaches to business and
profit came from, as well as a better understanding of the different institutional
elements of business that relate to profit, and how they fit together. Toward
this end, I reviewed theories of the firm.
It is worth noting that in the beginning of modern economic inquiry, the
neoclassical economic model as outlined by Léon Walras, did not have any
firms – only “production units” (Walker 2017). The neglect of firms in classi-
cal and neoclassical economics was a trait inherited from the early political
economists, who developed their ideas in an 18th century European context in
which the topic of the day was whether free trade or mercantilism should pre-
vail (Micklethwait and Wooldridge 2003; Walker 2017). This meant that their
analyses stayed focused on pricing, trade, the domain of the market versus
state, and the growth of national wealth (Heilbroner 1999). Due to this histor-
ical context, neoclassical economics assumes that firms are only important for
the macroeconomy in terms of their production function, so it is not important
to understand them, but rather to merely represent their production function in
economic theories and models (Walker 2017). In this way, the firm remained
a black box in the study of the economy until the 1920s and 30s. There was
no description of what went on in the black box of the production units or why
or how different production units interacted with each other. But by the 1920s,
it had become clear that firms were key economic actors and that they were
diverse, so it was important to figure out what they really were and what made
them tick (Walker 2017). Thus, the research field of theories of the firm was
born.

27
The chapter on business in this book (Kopnina 2016) is an account of a pedagogical experi-
ment in which students were assigned to perform circular economy analysis and consultation
for a company that builds bridges. Aside from a circular economy focus on closed-loop pro-
duction, it provides hardly any guidance for how the nature and structure of business should be
in a steady state economy and does not clearly connect institional elements of business to the
larger sustainability dynamics. Oddly, much time is spent on the issue of population growth in
this business chapter.

43
 These first theorists asked questions like: Why do firms exist?; What are
firms’ boundaries?; and Why do they behave the way they do? For example,
why do firms decide to produce some things themselves, but purchase some
things from other firms? How do they make such decisions? (Walker 2017)
However, it is important to keep in mind that these theorists were asking
these questions in a specific geographical and historical context, which shaped
their assumptions and approach. They were not thinking of which purpose
companies serve in society, when they asked “Why do companies exist?”, but
rather they wanted to know why, if the price mechanism worked so well,
companies existed instead of a bunch of entrepreneurs trading with each other.
Knight (1921), for instance, posited that businesses exist because
entrepreneurs can protect employees from the uncertainties of the market and
that is also why the entrepreneurs should receive profits. Coase (1937) sug-
gested that a company (as opposed to a sole trader or a small family business)
can take advantage of economies of scale to reduce the monetary and time
costs of constantly forming new contracts (finding partners, negotiations, and
monitoring contract obligations) - also known as transaction costs. When
Berle and Means (1932) wrote about the modern corporation and private prop-
erty, they were not questioning the private ownership of firms, but instead
were worried that the shareholders would be betrayed by professional manag-
ers. As such, these early theories of the firm took a lot of neoclassical eco-
nomic assumptions for granted.
Even more recent theories of the firm have taken for granted that actors are
financially self-interested, that firms are privately owned and for-profit, and
that profit-seeking is their main purpose (e.g., Dean 2013; Foss and Klein
2012; Langlois and Cosgel 1993; Penrose 2009). They do not often question
whether there are social or ecological limits to profit. Nor do they often ask
deeper questions about the role that firms play in society, in terms of deliver-
ing social benefit. Freeman’s (1984) stakeholder theory of the firm is a notable
exception to this, which sees the firm in a wider social context and proposes
that firms should take into account more types of stakeholders in their deci-
sion-making, in addition to shareholders. However, even Freeman takes for
granted that firms are privately owned and operated for profit.
Theories of the firm tend to explain the existence of not-for-profit organi-
zations as having emerged to compensate for market and state failures, and it
is usually taken for granted that NFPs are charity-dependent. An important
exception to this is Thompson and Valentinov (2017, 1079) who make the
point that “future work is needed to analyse the many other manifestations of
the antagonistic relationship between the firm and its environment, social and
natural alike”, and that research needs to “further explore the environmentally
restorative qualities of unconventional institutions, such as cooperatives, non-
profits and other ‘social-economy’ organisations, in order to attain a more so-
phisticated understanding of institutional diversity”.
I did gain some important insights about how businesses drive sustainabil-
ity problems from this body of literature. For instance, Penrose (2009) foresaw

44
the danger that profit-seeking strategies would lead to market concentration if
the assumption of competition did not hold in reality.28
The discussion of property rights in theories of the firm was particularly
illuminating in relation to my research questions. There is a lively debate
about whether shareholders are owners, whether creditors are owners, and
whether managers are owners. Scholars mention an important difference be-
tween the right to control or manage a business (i.e., control rights) and the
right to appropriate the assets and profit of a business (i.e., financial rights)
(e.g., Alchian and Demsetz 1972; Sanford J. Grossman and Hart 1986; Li-
becap 1986; Williamson 1991; Chaddad and Cook 2004; Orts 2013; Hodgson
2015). These discussions also touch on how the assignment of property rights
drives market dynamics through incentives. This clearly fills important gaps
in the post-growth literature in terms of clarifying: the institutional aspects of
business ownership according to types of rights and responsibilities; how busi-
ness ownership is tied to the pursuit and distribution of profit via financial
rights; and how profit-seeking and the assignment of property rights of busi-
ness drive aggregate dynamics.

Theories of sustainable business

Approaches to understanding “the firm” have changed over the years. As
sustainability problems have become a growing concern, more attention has
been paid to how firms can and should contribute to resolving these issues. As
such, a relatively new body of literature has emerged in the disciplines of or-
ganizational and business studies that specifically addresses sustainable busi-
ness. However, to my surprise, I found as much inconsistency and confusion
in this body of literature as in the post-growth field, when it comes to profit,
as well as the ownership, goals, and relationship-to-profit of business.
In these sustainability-oriented theoretical approaches to the firm, profit is
still largely seen as a primary purpose of firms and profitability is seen as a
key indicator of a firm’s health and success. However, building on Freeman’s
(1984) idea of a firm having multiple stakeholders, these theories propose that
firms should try to balance their profit-seeking goals with socially- and envi-
ronmentally-oriented goals (e.g., Dyllick and Muff 2016; Elkington 1994;
Lozano, Carpenter, and Huisingh 2015; Schaltegger, Lüdeke-Freund, and
Hansen 2016; Stubbs and Cocklin 2008). These theories often refer to the dou-
ble bottom line (balancing financial dividends with social benefit), the triple
bottom line (balancing “people, planet and profit”, as the catch-phrase goes),

28
In her words: “It cannot be too forcefully emphasized that the whole case made by the advo-
cates of big business rests on the insistence that competition in a very real and pressing form is
constantly and powerfully in evidence. Hence, the case presented breaks down if a few big
firms get so big and so powerful that they are in a position substantially to restrict competition
amongst themselves” (Penrose 2009, 326).

45
shared value (value for shareholders and other stakeholders), and win-win-win
situations (in which society, the planet, and investors all benefit).
Although these ideas promote the balancing of profit for investors with so-
cial and ecological concerns, there has always been confusion when it comes
to the means and ends of business. It is unclear whether businesses should see
profit as a means to achieving sustainability as an end; or if sustainability
should be seen as a means to achieving profit; or if profit and sustainability
should somehow be both means and ends. For example, in 1994 when John
Elkington coined the term “triple bottom line”, he wrote, “A key challenge for
business in the 1990s will be to convert some of its most critical stakeholders,
such as campaigning environmentalists, into a new form of ‘customer’”
(Elkington 1994, 97). The common assumption is that companies will only
achieve sustainability if they can make a profit doing so (Málovics, Csigéné,
and Kraus 2008). However, some authors have pointed out that corporate so-
cial responsibility and sustainability efforts are not working, and this is exactly
because companies tend to use strategies that will not sacrifice profit for social
benefit and therefore they do not undertake more high-impact sustainability
measures (e.g., Lodsgård and Aagaard 2017; Schneider 2020). This highlights
that potential tradeoffs between profit and social-ecological sustainability in-
deed exist, but are mostly neglected in the sustainable business literature.
Despite this tension, most theories in this field take a triple bottom line
approach, which advocates that both profit and social-ecological sustainability
should be an end (Hahn et al. 2010; Isil and Hernke 2017). For example, the
first principle of Lozano et al.’s (2015, 440) theoretical synthesis of a “sus-
tainability oriented theory of the firm” is “the firm has to generate profits”.
There is sometimes a mention of tradeoffs between profit on the one hand, and
social and ecological outcomes on the other (e.g., Lüdeke‐Freund 2020, 668),
but this concern is not usually given much weight and does not deter the au-
thors from assuming that people, planet, and investors can all benefit.
Sustainable business literature often promotes the idea that businesses
should shift or transform their purpose, but then paradoxically assume that
profit should continue to be a goal (e.g., Schaefer, Corner, and Kearins 2015;
Stubbs and Cocklin 2008). In this way, the broadening of business goals is
often confused with transforming or redefining business goals. For example,
Stubbs and Cocklin’s (2008) article features a whole section called “Redefin-
ing the Purpose of Business”, but it might more accurately be called “Expand-
ing the Purpose of Business”, as it adds social and environmental concerns on
to the centrality of the profit-seeking purpose. Perhaps this conundrum occurs
because much of this literature uses the “business model concept”, which does
not explicitly deal with a company’s purpose. As Bocken et al. (2014, 43) say,
“Business models are concerned with how the firm defines its competitive
strategy through the design of the product or service it offers to its market,
how it charges for it, what it costs to produce, how it differentiates itself from
other firms by the value proposition, and how the firm integrates its own value
chain with those of other firm’s in a value network”. There is nothing about

46
purpose there, but sustainable business research keeps trying to use business
model approaches to conceptually re-purpose business (including the Bocken
et al. (2014) article itself).
In fact, Bocken et al.’s (2014) paper is a great example of the inconsisten-
cies I discovered in the sustainable business literature when it comes to pur-
pose, relationship-to-profit, and profit-seeking in business. Initially, the au-
thors take a quite radical approach, proposing that a sustainable economy
should focus on maximizing “societal and environmental benefit, rather than
prioritising economic growth” and that businesses have a key role to play
(Ibid, 42). The article has a section titled “Repurpose the business for soci-
ety/environment”. Interestingly, this paper does actually seem to refute the
triple bottom line approach, saying clearly that businesses should be oriented
towards social and environmental benefit, rather than profit-seeking. Yet,
they decide to define social enterprises as for-profit, which reveals a lack of
knowledge about NFP business. Instead, they take the common inaccurate as-
sumption for granted that all NFPs are charity-dependent and “less well suited
to long-term continuous business operations” (Ibid, 53). (Examples such as
the YHA, which has been operating as an NFP business since 1930, fly in the
face of such claims (YHA 2020)). Near the end of the article, Bocken and
colleagues go on to contradict their earlier statements when they write,
“Demonstrating various options and possibilities for sustainable business
models will open up new areas of research and inspiration for practice (com-
panies, NGOs, government) on how to translate social and environmental
value creation into economic profit and competitive advantage for the firm to
build the ‘business case for sustainability’” (Ibid, 54-55) (my emphasis). In
one breath they advocate for repurposing business to focus on social and en-
vironmental outcomes rather than profit-seeking (i.e., sustainability as an
end), while in the next breath, they claim that social and environmental value
creation should be translated into economic profit and competitive advantage
(i.e., sustainability as a means and profit as an end).
This inconsistency between profit as a means or an end can be found
throughout the literature. For instance, Schaeffer et al. (2015) claim that sus-
tainable businesses should treat profit as a means rather than an end, but for
that claim they reference an interview about shared value which frames social
benefit as a means to achieving higher profitability. Likewise, Dyllick and
Muff (2016, 168) suggest that sustainable businesses go from a triple bottom
line approach to “Creating value for the common good”, however they then
proceed to write ambiguously about “including all three dimensions of the
triple bottom line”, making “business sense” out of sustainability, and “broad-
ening” business concerns. The overall problem here is that the focus on win-
win-win situations and making “the business case” for sustainability leads
businesses (and business scholars) to judge sustainability concerns through
the lens of profit maximization, rather than as goals in and of themselves
(Hahn et al. 2010). If there are significant tradeoffs between profit and social-
ecological sustainability, this is highly problematic.

47
 When it comes to larger dynamics in the economy and society, many
sustainability-oriented approaches to business look at how firms might
contribute to positive change, without paying much attention to how they
systemically contribute to sustainability crises (e.g., Lozano, Carpenter, and
Huisingh 2015; Schaltegger, Lüdeke-Freund, and Hansen 2016). However,
some sustainable business authors have offered important explanations of the
cross-scale dynamics of business. For instance, Bapuji et al. (2018) explains
how profit-seeking and profit distribution by businesses drives inequality.
Also, Schneider (2020) explains how the larger dynamics of the capitalist mar-
ket keep businesses from acting more sustainably, as part of a vicious cycle
(i.e. causal feedback loop). These articles in particular offer important insights
for answering my research questions, but it is unfortunate that they are so few
and far between.

Social enterprise
The social enterprise literature is often shuffled into the “sustainable busi-
ness” category. However, this sub-category of literature does often directly
discuss relationship-to-profit, profit-seeking, profit distribution, and the pur-
pose of business, so it is distinctly relevant to my research questions. There-
fore, it is worth distinguishing as its own (albeit small) body of literature.
In general, I also found the social enterprise literature to be inconsistent
when it comes to my research questions. However, the fact that the literature
treats the formal regulative institutional elements in such an explicit way
helped give my research a clearer direction and vocabulary.
The social enterprise scholarship is more explicit about relationship-to-
profit than any other bodies of work covered in this review. In contrast to the
literature reviewed above, these authors frequently acknowledge that NFPs
can be businesses (e.g., Borzaga and Tortia 2007; Reiser and Dean 2017). This
is likely related to the rise of new social enterprise incorporation structures,
such as the Benefit Corporation in the US, the Community Interest Company
in the UK, and Social Cooperatives around Europe; some of which are FP and
some of which are NFP.29 Therefore, the importance of relationship-to-profit
comes to the fore.
Yet, there is no solid definition for “social enterprise”. Although it is
broadly defined as an entrepreneurial organization with “a relevant degree of
public benefit connotation” (Borzaga and Tortia 2007, 33), this leaves a lot of

29
Perhaps surprisingly, many incorporation structures for social enterprise are only available
in a for-profit form (e.g., the Benefit Corporation in the US). However, a great number of social
enterprises in many countries are simply the business subsidiary of a foundation, NGO, or
charity (often referred to as hybrids). The latter fit the legal description of an NFP, because
there is no chance for profit to be privately distributed, so long as they remain fully owned by
an NFP.

48
room for interpretation and, indeed, I found a wide range of interpretations.
Due to the vague definition of social enterprise, some authors use the term
only in reference to FP enterprises (e.g., Mair, Robinson, and Hockerts 2006),
while others focus more on NFP enterprises (e.g., N. Thompson, Kiefer, and
York 2011), and yet other authors seem confused as to what they think about
the for-profit/not-for-profit distinction in relation to sustainability outcomes
(e.g., Borzaga and Tortia 2007). In some instances, Borzaga and Tortia (2007)
clearly favor non-ownership by investors (e.g, on page 39), but at other times
say that the NFP form of business is too narrow to allow for the “social econ-
omy” as they would like to define it (e.g., on pages 30- 31), even though the
alternative (i.e., for-profit) involves private ownership by investors.
I also found that authors use different terms to refer to the distinction be-
tween for-profit and not-for-profit (such as legal form, organizational form,
legal structure, and legal type), which does not facilitate discussions about
how important this aspect of business might be for delivering positive social
and ecological outcomes. The terms used are also not sufficiently precise. For
instance, “legal type” could refer to a wide range of institutional aspects. This
is what prompted me to derive the term “relationship-to-profit” in Paper 3,
which is more precise and accurate (a point that will be discussed in the next
chapter).
When it comes to profit-seeking and other goals, some authors propose a
double-bottom line approach (e.g., Reiser and Dean 2017) or a triple bottom
line approach (e.g., Mair, Robinson, and Hockerts 2006), while others say that
renouncing the profit motive allows social enterprises to reconcile different
stakeholders’ interests (e.g., Borzaga and Tortia 2007). Certain authors con-
nect business purpose and goals directly to relationship-to-profit; for instance
Thomposon, Kiefer, and York (2011) refer mostly to NFPs and describe how
such enterprises put social mission ahead of profit.
Reiser and Dean (2017) is a good example of the kinds of tensions and
inconstencies I found in this literature when it comes to key institutional ele-
ments. The authors state that the NFP type has advantages, due to the legal
nondistribution constraint, pure dedication to mission, and trust, but suggest
that social enterprises should be FP (Reiser and Dean 2017, 24). They men-
tion several times that profit is needed to incentivize investment and that is
why social enterprises should be FP, but then they also mention that NFPs can
be profitable (and profit can be reinvested). They also write a considerable
number of times about how dysfunctional triple bottom line approaches are -
and that is why they seek to cement a social mission into a for-profit business
type.
Another example of the vagueness I found in the social enterprise literature
is a conceptualization of the non-profit to for-profit continuum offered by
Marshall et al. (2015) (Figure 6). The spectrum is organized in terms of
whether the organization prioritizes financial goals, social goals, or both, as
well as whether it engages in commercial exchange. However, their spectrum
does not clearly identify which types of organizations are FP or NFP in terms

49
of their legal structure. It does not even mention the right to distribute profit,
which is arguably the key difference between FP and NFP (i.e., the nondistri-
bution constraint).

Figure 6: Continuum of non-profit to for-profit

(Source: Marshall et al. (2015, 86). Table reproduced with permission of Informa
UK Limited through PLSclear.)

When it comes to considering business as a driver of sustainability dynam-

ics, this literature does not have much to say. One gets the sense that this field
sees social enterprise as a niche and the authors do not envision an entire econ-
omy shifting to social enterprise models. As an exception to this, Borzaga and
Tortia (2007) mention that social enterprises can contribute to community de-
velopment and hint at transitions from FP markets to NFP markets.
Hillman et al. (2018) conducted the only work that I found which probes
social enterprise as an instrument for larger sustainability transitions. How-
ever, the authors claim that, because the seven social enterprises that they ex-
amined face scaling issues and they are too small to replace the neo-liberal
market, there is no hope for social enterprise to transform the dominant eco-
nomic regime. There are various problems with Hillman et al.’s article; chiefly
that the method of in-depth interviews with seven companies in the UK is not
the best way of trying to answer a research question about large-scale transi-
tions away from the neoliberal paradigm. Furthermore, the authors leave many
questions unanswered which relate to their assumptions about what needs to
be transitioned away from, how transitions happen, what kind of scaling is
necessary for sustainability transitions, and how scaling could occur.
Overall, my review of the social enterprise literature reveals a pattern of
authors being explicit, yet inconsistent and vague when it comes to how rela-
tionship-to-profit, the purpose of business, profit-seeking, and the distribution
of profit relate to sustainability. Nevertheless, all of its messiness and contra-
dictions aside, the social enterprise literature does illustrate just how deeply
connected the purpose, ownership, and relationship-to-profit of business are.

50
Remaining problems
It is worth noting that the inconsistency and confusion that I identified in
these bodies of literature are to be expected in new fields of research and pio-
neering work. Although I identified weaknesses in all of the bodies of litera-
ture included in my review, I gained important insights from these different
approaches that can be used to strengthen the post-growth understanding of
the roles that business, markets, and profit play in sustainability. Below I offer
a short summary of the key weaknesses and strengths that I identified in rela-
tion to my research aims.
Much of the scholarship is vague, inconsistent, or mistaken when it comes
to the formal regulative institutional elements of business (with the exception
of theories of the firm and some of the social enterprise work). Only the social
enterprise literature focuses on the alignment of regulative institutions (e.g.,
incorporation structure and relationship-to-profit) with informal institutions of
the firm (e.g., business goals) to some extent; yet it is inconsistent in its in-
sights about how alignment for sustainability can be achieved.
The inconsistencies and confusion that I encountered in the sustainable
business and social enterprise literature highlight for me that there is a need to
clarify the relationship between profit, a business’s financial purpose and
goals, and a business’s social benefit purpose and goals. The sustainable busi-
ness literature largely assumes that what is good for society is also profitable,
but they inevitably run into tension with that assumption. Similarly, much of
the post-growth literature assumes that what is good for society is fundamen-
tally at odds with business, markets, and profit, but that literature does not
offer suitable alternatives. I found that this important tension between social
benefit and private gain cannot be assumed away. In particular, this tension
bubbles up to the surface in social enterprise discussions, but there is so much
inconsistency and a lack of connection to larger sustainability dynamics, that
there is no clear guidance for thinking about how to organize business for a
sustainable economy. When are there tradeoffs and when might profit and so-
cial-ecological sustainability be aligned? This question is left unanswered.
Similarly, the messiness in the literature reveals a need to more clearly ar-
ticulate how the relationship-to-profit of business is connected to business pur-
pose, ownership, and profit-seeking, from a sustainability perspective. The in-
sights that I gained from reading about the difference between control rights
and financial rights in theories of the firm allowed me to identify the lack
clarity around the issue of business ownership in the other bodies of literature,
and to fill that gap. However, even when these gaps are filled, there is still a
lack of clarity about how control rights and financial rights relate to post-
growth organizing.
In all of these areas of research, there is a mismatch between the scale of
the problem and the scale of proposed solutions. If profit-seeking business is
currently a systemic driver of sustainability problems, then piecemeal under-
standings and solutions will not suffice. A systemic understanding is needed.

51
Unstated theories of value
In reviewing the literature, I found another important variable that I had not
previously been considering: value. There are references to an undefined no-
tion of “value” throughout all of this literature. It is a word that is thrown
around as if everyone is on the same page about what value is and where it
comes from. For example, Lüdeke-Freud (2020, 667) writes that business
should “create value for a broad range of stakeholders”; in Hinton and Maclur-
can (2016, 13) we mention “generating value for the wider community”; Bor-
zaga and Tortia (2007, 27) allude to economic and social surplus value; and
Reichel (2017, 108) refers to value throughout the article (e.g., “diverse and
heterarchical networks of value creation”). Yet, in all of these texts it is not
clear what this means. What kind of value is created and for whom? Where
does this value come from? In reading these pieces of literature, one gets the
sense that the authors are discussing value in different ways and probably have
different implicit theories of value. Pirgmaier (2021) rightly points out that, as
a central aspect of how economies and businesses are organized, theories of
value need to be explicit. Perhaps the vagueness about value is related to the
other points of confusion, for instance, around tradeoffs between profit and
social-ecological sustainability. This inspired me to deal explicitly with theo-
ries of value in Paper 1, which I describe in the next chapter.

52
Four Papers and Their Assertions

Paper 1: Sources and Limits of Profit

Hinton, J.B. “Limits to Profit? A conceptual framework for understanding
profit and sustainability.” Manuscript to be submitted to Ecological Econom-
ics.

This article seeks to unpack how the generation of profit affects social and
ecological sustainability. It begins by framing profit as not necessarily sus-
tainable or exploitative and posits that there are four main aspects of profit
that must be understood for the purposes of sustainability: profit is largely
treated as an end in capitalist economies; there are only so many ways to gen-
erate profit; there are social and ecological inputs and impacts in the process
of generating profit; and different profit-seeking strategies have different so-
cial and ecological implications. I briefly elaborate on these points below.
In order to understand profit, one must understand the underlying notion of
value. Value is socially-defined and different economic systems are organized
according to different understandings of value. The capitalist type of economy
largely defines value in monetary terms and prioritizes money (and profit) as
an end. Because profit comes from cutting costs and/or increasing revenue,
there are a limited number of ways to generate profit and only so many oppor-
tunities for profit in an economic process. Those opportunities often align with
social and ecological inputs and impacts. When social and ecological stake-
holders are not compensated for their contributions, they can be considered
unpaid inputs and, thus, sources of profit. This can happen in a voluntary and
informed way, or in an exploitative way. Profit is derived from the exploitation
of social stakeholders, when one party financially benefits at the expense of
another party (i.e., when the unpaid contribution is not voluntary and in-
formed). The exploitation of nature as a stakeholder is more complicated. All
economic activity entails some level of ecological exploitation, but unaccepta-
ble ecological exploitation can be defined as that which is unnecessary for
meeting human needs or has an unnecessarily high environmental impact. The
more unnecessary a good or service is, the more ecologically exploitative it is.
The paper goes on to examine several common types of profit-seeking
strategies in terms of how they cut cut costs or increase revenue in order to
generate profit. This results in a conceptual framework which clarifies that
profit-seeking strategies generate profit from four basic sources: efficiency

53
gains, willing and informed contributions from social stakeholders, exploita-
tion of social stakeholders, and exploitation of nature.
The fact that there are a bounded number of sources of benign profit and
that there are limits to those sources, indicates that there are limits to profit. If
profit were only generated from these limited benign sources, there would not
be much profit.
In seeking financial gain, actors tend to gravitate to exploitative practices
in order to cut costs and increase revenue. Indeed, much of the profit generated
today comes from exploitation, which helps explain the sustainability crisis.
In a profit-driven system, they can justify doing so, because they are expected
to employ strategies that generate profit, due to the underlying notion of value
and definition of success in capitalist societies. The gravitation to exploitative
strategies creates unsustainable dynamics that pressure all actors to employ
such strategies in order to stay in the market. This reveals some inherent con-
tradictions and perils of a profit-driven economy. It also means that, for the
sake of social-ecological sustainability, profit should not be treated as an end.
Strategies that derive profit from efficiency gains or from willing and in-
formed contributions from stakeholders can be considered compatible with a
sustainable economy, depending on the context. Thus, the paper adds clarity
about the social and ecological sources and limits of profit, and gives guidance
for how profit should be treated in a sustainable economy.

Key contributions:

• Conceptual framework of profit-seeking strategies and limited sources

of profit, from a social-ecological sustainability perspective.
• Clarification of tradeoffs and synergies between profit and social-eco-
logical sustainability; as well as when profit is derived from exploita-
tion or not.
• Explanation of why and how business contributes to sustainability prob-
lems.
• Reframes many market failures as exploitation-based sources of profit.

Paper 2: Means and Ends

Hinton, J.B. and Cornell, S.E. “Profit as a Means or an End? An analysis of
diverse approaches to sustainable business.” Under review for Journal of
Cleaner Production.

Increasingly, sustainable business scholars acknowledge that there are of-

ten tradeoffs between profitability, on the one hand, and social and ecological
outcomes, on the other. This has led some to claim that a key characteristic of
a sustainable business is that it approaches profit as a means rather than an

54
end, which aligns with post-growth economic principles. However, it is not
immediately clear what “profit as a means rather than end” entails.
Building on Daly’s (1977) Ends-Means Continuum, this article proposes
that two indicators can be used to judge whether a business sees profit as an
end. The first indicator is whether or not the business has private financial
rights (i.e., the legal right to distribute profit and assets to private owners).
And the second is whether the business states profit or profitability as a vol-
untary objective.
The article uses these two indicators to assess whether various types of
approaches to sustainable business allow for profit to be seen and pursued as
an end, or not. In order to test these indicators, a sampling of theoretical
approaches, as well as legal frameworks, and third-party certification schemes
were evaluated. Most approaches analyzed do allow for profit to be seen as an
end, both in terms of financial rights and voluntary objectives. This includes
those approaches that explicitly purport to be compatible with post-growth,
degrowth, and strong sustainability. This extends even to approaches that
explicitly claim profit should be seen as a means rather than an end.
Alternative legal frameworks offer the most consistency in precluding profit
as an end in terms of both financial rights and voluntary objectives.
This analysis reveals a lack of clarity about the role of profit in approaches
to sustainable business. The two indicators developed in the paper can provide
a useful starting point for assessing whether or not an approach to sustainable
business allows for the pursuit of profit as an end in itself.

Key contributions:

• Makes a clear conceptual distinction between “profit-as-end” and

“profit-as-means”.
• Develops indicators for assessing whether a business approaches profit
as an end versus as a means.
• Reveals inconsistency and incoherence in the way profit is treated in a
variety of approaches to sustainable business.
• Clarifies that legal frameworks more consistently align voluntary objec-
tives and financial rights, as compared to theoretical frameworks and
third-party certification schemes.

55
Paper 3: Fit for Purpose
Hinton, J.B. 2020. “Fit for Purpose? Clarifying the critical role of profit for
sustainability.” Journal of Political Ecology, 27(1): 236- 262.

There is generally a lack of clarity about how profit intersects with issues
of social and ecological sustainability on the aggregate scale. Currently, mar-
ket economies around the world are largely made up of profit-seeking busi-
nesses, so it makes sense that the goal of private financial gain would have a
significant influence on the dynamics of the aggregate economy. This paper
seeks to clarify the causal mechanisms by which profit-seeking impacts social
and ecological sustainability issues. Starting with the legal distinction between
for-profit and not-for-profit forms of business, it develops ideal types of econ-
omies, based on this structural relationship-to-profit of business. In doing so,
it explains how the associated economic dynamics affect social and ecological
sustainability.
Relationship-to-profit is conceptualized as the nexus between legal pur-
pose, ownership, and investment. While FP businesses can have the legal pur-
pose of financial gain, social benefit, or both, NFP business structures only
allow for the legal purpose of social benefit. While FP businesses can have
private owners, NFPs have a type of ownership that is better characterized as
collective, because there are no private financial rights. While FP businesses
can have unlimited returns on equity-based investment, this is precluded by
the non-distribution constraint of NFPs. Ideal types of economies are devel-
oped based on these institutional differences in relationship-to-profit.
The ideal types of economies illustrate that FP business structures play a
critical role in driving consumerism, environmental degradation, inequality,
market concentration, and political capture. This is because the pursuit of un-
limited returns on investment to private owners in service of the legal purpose
of financial gain drives unsustainable reinforcing feedback loops in the econ-
omy. It could be expected that adding social benefit purposes on to the finan-
cial gain purpose of FP structures might slow down these unsustainable dy-
namics, but would not fundamentally change the system structures that drive
the dynamics. It could be expected, on the other hand, that an NFP type of
economy would not systematically drive consumerism, ecological problems,
inequality, market concentration, or political capture in the same way; due to
the limitations on the pursuit and distribution of profit that are built into NFP
business structures.
Based on this analysis, the paper claims that the dynamics of the global
sustainability crises are, to a significant extent, due to the for-profit business
structure (particularly the combination of the pursuit and private distribution
of profit via financial rights). These dynamics would not necessarily exist in
a not-for-profit economy. An NFP economy would allow for post-growth
transformations in ways that the for-profit economy does not. The for-profit
nature of the global economy plays an essential role in keeping societies

56
locked into a pattern of economic growth, as well as social and ecological
sustainability crises.

Key contributions:

• Conceptualizes the difference between for-profit and not-for-profit

forms of business as relationship-to-profit.
• Offers clarification of how for-profit business drives the growth of con-
sumerism, environmental degradation, inequality, market concentration,
and political capture.
• Explores the structure and dynamics of a not-for-profit type of econ-
omy, as an alternative to the for-profit type of economy.
• Gives greater clarity on dynamics that cross over between the micro-
economy and macro-economy scales of analysis, based on key institu-
tional elements.
• Offers archetypes of for-profit and not-for-profit market dynamics that
can be used for discussion and analysis of specific contexts.

Paper 4: Dimensions of Business

Hinton, J.B. “The Five Dimensions of Post-Growth Business: Putting the
Pieces Together.” Under second round of review for Futures.

Post-growth approaches to business are scattered and piecemeal. There is

no overarching framework to connect the disparate points of focus and ground
discussions about post-growth compatible business. This article develops such
a framework.
The article begins by grouping aspects of business that have been identified
in the literature as important for post-growth economies, according to their
institutional character (i.e., informal or formal; legally-binding or not). The
result is the Five Dimensions framework, in which the dimensions are:
(1) relationship-to-profit, (2) incorporation structure, (3) governance struc-
ture, (4) strategy, and (5) size and geographical scope.
The framework orders the dimensions according to the degree of their in-
stitutional formality and changeability. The paper explores how the more for-
mal dimensions guide and constrain other dimensions. For example, as a for-
mal legally-binding structure, relationship-to-profit guides and constrains all
of the other dimensions, while size and geographical scope (a common point
of focus in the post-growth literature) is mostly guided and constrained by the
other four dimensions. I posit that alignment among all five dimensions with
post-growth aims is essential to ensuring that sustainable business efforts are
post-growth compatible.

57
Key contributions:

• Offers a common language and coherent framework for discussing busi-

ness.
• Contributes to a more robust understanding of post-growth compatible
business.
• Contextualizes relationship-to-profit as one of several important attrib-
utes of a post-growth compatible firm.
• Clarifies common points of confusion, such as the difference between
relationship-to-profit, incorporation structure, and governance.

58
Synthesis of Papers: Relationship-to-profit
theory

In this chapter, I will provide a theoretical synthesis of the papers to describe

how the relationship-to-profit theory answers each research question in four
sections:

1. Social and ecological limits to profit and profit-seeking;

2. How business relates to profit;
3. Sustainability implications of relationship-to-profit; and
4. Relationship-to-profit and other dimensions of business.

Social and ecological limits to profit and profit-seeking

Research question 1: What are the necessary and sufficient conditions for
socially and ecologically sustainable profit?

It is important to address what constitutes “value” in answering this re-

search question, because profit is surplus value. The notion of economic value
is socially-defined, so different kinds of economic systems can be organized
according to different understandings of value. As an informal institution, the
underlying notion of value upon which economic entities are founded guides
their goals and strategies. The capitalist economic system is organized accord-
ing to an exchange-based understanding of value, which defines value primar-
ily in monetary terms and prioritizes money as an end. In such a system, eco-
nomic actors are incentivized to prioritize money over the protection of social
and ecological concerns because their success is defined in monetary terms. It
follows that the protection of people and the biosphere is only likely to happen
if it can somehow generate more money.
Also important to the discussion of value and profit, is the fact that there
are social and ecological inputs to, and impacts of, the production of goods
and services. When social stakeholders and nature are not compensated for
their contributions to the economic process, they can be considered unpaid
inputs and, as such, they are sources of profit. This often overlaps with exploi-
tation, which happens when one actor (e.g., a business owner) benefits at the
expense of another actor (e.g., the environment, workers, consumers, other

59
value chain actors, local communities, or society at large). In this way, a profit-
driven economy incentivizes exploitation of social stakeholders and nature for
profit. (Paper 1)
However, not all profit comes from exploitation. Informed and able social
stakeholders can voluntarily contribute to the profit of a company (as routinely
happens in NFP businesses). Profit can also come from a company using more
efficient technology, processes, and techniques. (Paper 1)
By examining common types of profit-seeking strategies, one can identify
where profit comes from in different cases and thus, assess whether it is sus-
tainable or not. I have found that there are four basic sources of profit: effi-
ciency gains; willing and informed contributions from social stakeholders; ex-
ploitation of social stakeholders; and exploitation of nature. When profit is not
made through efficiency gains or willing and informed contributions from so-
cial stakeholders (as in the case of a charity shop), then it comes from exploi-
tation (to some extent). This means that there are often, but not always,
tradeoffs between profit and social-ecological sustainability.30 (Paper 1)
By focusing on the link between strategy and the source(s) of profit, it be-
comes clear that it is exactly because some strategies are exploitative of people
and planet that they are profitable (e.g., paying low wages, lobbying against
taxes, and ignoring environmental regulations all lead directly to increased
profit). In these cases, the surplus value is derived from the exploitation of
social stakeholders and/or nature.31 The most exploitative strategies are often
very lucrative. Furthermore, a non-exploitative (or minimally-exploitative)
business is not likely to be as profitable as an exploitative one. This helps
explain why unsustainable strategies are so widely used and are causing so
much damage to communities and ecosystems world-wide. Indeed, much of
the profit made in the global economy comes from exploitation.32 (Paper 1)
In a profit-driven economy based on exchange-value, companies can jus-
tify these exploitative strategies because they are generating value (i.e.,
money), which is assumed to be inherently good for society. Exploitative
profit-seeking strategies create feedback dynamics, wherein individual busi-
nesses’ strategies shape and are shaped by the aggregate market. The larger
and more powerful a business is, the more its strategies tend to shape the mar-
ket dynamics. The smaller a business is, the more its strategies tend to be
shaped by market dynamics. Furthermore, the frantic competition for profit
pushes managers to focus on short time horizons. (Papers 1 and 3)

30
Defined as a state in which everyone’s needs are met within the ecological limits of the planet
and without compromising the ability of future generations to meet their needs.
31
Unpaid care work (so-called “womens’ work”) provides the underlying basis for all paid
work, production, sales, and accumulation of wealth. Unpaid care workers can be exploited to
a great degree in the FP economic system. (Paper 1)
32
It is estimated that, globally, about 150 billion USD of profit is generated each year from
forced labor (ILO 2014) and 200 billion USD of profit is generated from tax havens (i.e., profit
from not paying taxes) (Wier 2020). This is not to mention the profit made from the other
exploitative strategies in Papers 1 and 3.

60
 For the purposes of thinking about post-growth transformations, an im-
portant insight that emerges from this analysis is that not all profit is exploita-
tive. Profit can be derived from informed and willing economic actors, as well
as from efficiency gains. Yet there are limits to these sources. Take for in-
stance, the profit generated from efficiency gains by decreasing inventory. A
company’s inventory can only be decreased to the extent that it still allows for
products to be sold and companies that already have zero inventory cannot
derive more profit from further decreasing their inventory. Similarly, the strat-
egies of buying in bulk, finding cheaper office space, and increasing resource
productivity have limits. The laws of thermodynamics pose energetic limits to
the efficiency that can be gained through technological advances. There are
also limits to the amount of profit that informed actors are able and willing to
contribute. When it comes to nature, meeting human needs will always require
some level of environmental exploitation, but there are non-negotiable limits
of biosphere functioning. Thus, there are social, technological, and ecological
limits to profit. (Paper 1)
Given these limits, economic institutions should not pursue profit as an end.
This, in turn, indicates that societies should not define value and success in
terms of money. A use-based notion of value would be more sustainable, in-
centivizing actors to seek positive social and ecological outcomes (i.e., that
which gives usefulness) as an end and as a measure of success. In such an
economy, profit is seen as a means to socially-useful ends. Futhermore, sus-
tainable economic actors should pay a great deal of attention to how economic
activities are carried out in order to avoid exploitation. Lastly, they should be
transparent about how and why they generate profit. (Paper 1)

How businesses relate to profit

Research question 2: How do businesses relate to profit?

Profit as a means or an end

How can we determine if profit is treated as a means or an end? If it be-
comes widely accepted that businesses should treat profit as a means rather
than an end, then companies could easily start claiming they see profit only as
a means without changing the way they operate. Co-optation and greenwash-
ing are a constant risk when it comes to transformational efforts. Whether a
business sees profit as a means or as an end is indicated in two main ways:
financial rights, and voluntary objectives. (Paper 2)
Relationship-to-profit plays an important role here. Profit-as-a-means is ce-
mented by the preclusion of private financial rights in NFP forms of business.
For-profit business structures, on the other hand, allow for private financial

61
rights33 and profit-seeking objectives, so in these types of business profit-as-
a-means is reduced to voluntary objectives. This is problematic because, as an
informal institution, voluntary objectives have a relatively low level of ac-
countability and enforceability. Therefore, legal business types are important.
(Papers 2 and 4)

Relationship-to-profit
This dissertation reframes the distinction between for-profit and not-for-
profit forms of business as relationship-to-profit (which I will sometimes ab-
breviate as RtP in the following discussion for the sake of brevity). For the
purposes of sustainability, the key difference between these forms is whether
a business is legally obliged to use profit as a means to achieve social benefit
or is allowed to pursue financial gain as an end in itself – quite literally the
business’s relationship to profit as a means or an end. Relationship-to-profit
encompasses important regulative institutional elements of business includ-
ing: legal purpose, ownership, and investment. (Paper 3)
The term relationship-to-profit provides a more accurate and precise ex-
pression for the difference between for-profit and not-for-profit than the com-
monly-used terms “legal status”, “legal form”, “legal type”, or “organizational
type”. For instance, the legal type of a business could refer to the difference
between a shareholder corporation and a partnership. Legal status could refer
to the difference between an incorporated and an unincorporated organization,
or could even refer to whether a business has been acting illegally or not.
These terms can lead to unnecessary confusion and do not draw attention to
the key issue of how this regulative structure guides and constrains a business
in relation to its financial flows (and thus, its social and ecological impacts).
(Paper 3)
My introduction of the expression “the relationship-to-profit of business”
is also a deliberate attempt to break away from the common misunderstanding
that “not-for-profit” and “business” are mutually exclusive, as in different “or-
ganizational types” (i.e., not-for-profit organizations can imply that these are
not businesses). I am intentionally introducing a new term in the hopes of
highlighting the importance of the for-profit/not-for-profit distinction for busi-
ness, as well as fostering new kinds of discussions around a wider range of
economic possibilities.

Relationship-to-profit guides and constrains business behavior

The most important aspect of relationship-to-profit for sustainability is that
it defines in legal terms what kind of purpose, ownership, and investment a

33
While Paper 3 focuses on purpose, investment, and ownership, I have more recently come to
focus on financial rights rather than ownership due to the confusion that arises around the term
“ownership”. This will be covered more in the Discussion.

62
company can have, and these regulative incentives and constraints shape busi-
ness behavior and drive larger sustainability-related dynamics. In terms of
rights and responsibilities, the FP structure allows for types of behavior that
the NFP structure does not. These include: the right of the business to pursue
private financial gain; the right to sell shares of financial ownership and take
equity-based investment from private investors; the right to privately distrib-
ute profit; and the responsibility to deliver a return on investment. In contrast,
the not-for-profit structure entails the responsibility to use all of the business’s
resources to deliver social benefit and often the right to tax exemptions. (Pa-
per 3)

The complexity of relating to profit

The RtP problematization posits that profit and business, in themselves, are
neither sustainable nor unsustainable. Rather it is largely how a business re-
lates to profit that determines the sustainability of both the profit and the busi-
ness. There are many aspects of how a business relates to profit that are im-
portant for sustainability on a larger scale. These include the anticipation, pri-
oritization, pursuit, generation, reinvestment, and distribution of profit. For-
profit and not-for-profit business structures differ in terms of how they relate
to profit in all of these aspects, aside from the generation of profit.
The anticipation of profit refers to whether there is a desire and expection
for private financial gain. The prioritization refers to whether profit is seen as
a means or an end. The pursuit of profit refers to the active use of strategies in
order to derive surplus from the businesses’ activities. The generation of profit
refers to how profit is realized; either through exploitation, efficiency gains,
or willing and informed contributions of other actors. (It is necessary to artic-
ulate the generation and pursuit of profit separately because not all profit-
seeking strategies succeed. Sometimes profit is pursued but not generated, and
even unsuccessful profit-seeking strategies can have significant social and en-
vironmental impacts). Reinvestment of profit can be done in order to derive
more financial gain or in service of social or environmental benefit. Lastly,
residual profit can be distributed to private owners to increase their financial
standing, or it can be distributed in service of social benefit (e.g., profit dis-
tributed to a charity). Throughout this process and in every aspect of business
activities, the business relates to profit through the formal institutional aspects
of legal purpose, financial rights, and investment structures; as well as the in-
formal instutional aspects of voluntary objectives, and strategies (Figure 6).
(Papers 1, 2, 3, and 4)

63
 Figure 6: Business relates to profit through institutional elements

Although this sounds like an issue that should be confined to the fields of
microeconomics and organizational studies, the relationship-to-profit dimen-
sion of firms is also a critical issue for post-growth macroeconomics and the
study of global sustainability problems, because of its influence on larger sys-
tem dynamics as outlined below.

Sustainability implications of relationship-to-profit

Research question 3: How does relationship-to-profit affect social and eco-
logical sustainability?

Competition for profit in the for-profit market

Due to the differences between for-profit and not-for-profit forms of busi-
ness, an economy composed mostly of FP businesses can be expected to have
quite different dynamics compared to an economy composed mostly of NFP
businesses. These dynamics are described below.
The financial gain purpose, private financial rights, and equity-based in-
vestment structures of for-profit forms of business incentivize unsustainable
profit-seeking strategies, such as: advertising, planned obsolescence, wage
suppression, union-busting, mergers and acquisitions, and influencing govern-
mental policy. As a result, the for-profit economy is characterized by vicious
cycles and race-to-the-bottom dynamics that play out over time. The wide-
spread use of these strategies in the for-profit economy drive the growth of
consumerism, environmental damage, inequality, market concentration, and
political capture (Figure 7). Competition for profit in such a market creates
paths of least resistance. Types of strategies that cut costs and increase revenue
regardless of social and ecological consequences enable companies to better
compete, while strategies that take social and ecological concerns seriously
involve higher costs and are, thus, risky in the for-profit economy. Higher

64
costs mean less profit and less perceived profitability leads to less investment
in an economy in which actors invest for financial gain. (Papers 1 and 3)
It is worth noting that most of the harmful profit-seeking strategies identi-
fied in Paper 1 can be easily added into the analysis in Paper 3; such as tax
avoidance, collusion, automation, forced labor, and disregarding environmen-
tal regulations. The conceptual model would simply have a larger number of
variables driving the unsustainable dynamics.
In this type of economy, the desire for private financial gain is assumed to
be the best source of motivation for economic decision-making and invest-
ment. As such, the desire for financial gain is both a core feature of the for-
profit economy, as well as its key pathology. The desire for financial gain is
never satisfied and, according to the for-profit logic, in order for profit-moti-
vated investments to continue to be made, it never should be satisfied. Greater
financial gain is assumed to always be better. The aim itself is stated in expan-
sionary terms. In systems thinking terms, the for-profit type of economy is
driven by a goal that has no balancing feedback – there is never enough
money. In fact, this desire for financial gain is further reinforced by various
factors, including high-cost lifestyles, social comparison with peers, inequal-
ity, and the ability to buy more equity in companies. (Paper 3)

Figure 7: For-profit economy dynamics from Paper 3

Private financial rights and the associated desire for financial gain generate
destructive dynamics in two main ways. First, the private distribution and ac-
cumulation of profit drives inequality and enables political capture, as de-
scribed in the Fit for Purpose paper. Second, these aspects of FP business
incentivize profit-seeking strategies that generate profit at the expense of
social and environmental stakeholders (as outlined in the Limits to Profit pa-
per), contributing to all of the dynamics identified in the Fit for Purpose paper.
Importantly, for-profit firms in a for-profit social context can justify acting

65
this way because they are legitimized by the larger cultural narratives and so-
cial norms of capitalism. As more companies use exploitative strategies, it
makes it harder for companies to compete using non-exploitative strategies.
This creates paths of least resistance in the direction of exploitation. (Papers
1 and 3)
A market in which businesses seek to maximize profit drives dynamics that
further encourage businesses to use harmful profit-seeking strategies or to risk
being bought out, beaten out, or co-opted. If managers choose to use the most
profitable strategies, (which are often the most exploitative), they will be add-
ing to the pressure on other actors to do so, as well. If managers choose not to
use exploitative strategies, their competitors who do use such strategies might
benefit and they will be worse off. For instance, if they choose to pay higher
wages or to only use ethically-sourced inputs, they will have to charge higher
prices than competitors who do not, or cover the cost in some other way. (Pa-
pers 1 and 3)
Although competition plays an important role in these dynamics, a few
types of exploitative profit-seeking strategies involve cooperation; such as
colluding with other companies to fix prices, or cooperating to lobby against
taxes in a certain industry. This implies that the profit-seeking aspect of the
capitalist market is more problematic than the competitive aspect. The de-
structive dynamics of the for-profit economy depend on selective competition
and cooperation between actors toward the goal of deriving financial gain.
(Papers 1 and 3)
The RtP lens also helps to explain the rise of neoliberalism. The exploita-
tive strategies described in Paper 1 and the political capture dynamics de-
scribed in Paper 3 result in deregulation (due to the pressure from businesses
on governments to open up the legal space for profit-seeking). These dynam-
ics also lead to increased reliance on the for-profit market for solutions to
societal issues, due to inadequate tax revenue for governments to deal with the
growing societal problems created by the for-profit market. This lack of tax
revenue is itself a result of the tax breaks for which industry has lobbied, as
well as tax evasion by the wealthiest actors. Although it might seem foolish to
expect the source of the problem to solve the problem, the informal institutions
of the for-profit economy support and legitimize the neoliberal turn (e.g., the
belief in the for-profit market’s efficient allocation of resources and that it
generates wealth for society at large). However, in the long-term, levels of
trust in political and economic institutions can be expected to decrease, as a
result of widespread exploitation, increasing inequality, worsening ecological
problems, and a growing sense that big businesses and their owners can do
whatever they want. (Papers 1 and 3)
A last point to mention here is that, due to profit-seeking, the for-profit type
of economy has a tendency to become global (constantly looking for cheaper
inputs and new markets) and the thinking of managers tends to be focused on
short-term time horizons (due to the competition for profit). This is counter to

66
the long-term thinking and relocalization of economic activity that are needed
for sustainability. (Papers 1 and 3)

The drive for private financial gain is unsustainable

The desire for financial gain is the engine of the for-profit economy, as it
drives investment and production, however private financial accumulation is
fundamentally at odds with social benefit. In the FP system, private financial
gain is optimized, but with exploitative strategies and success-to-the-success-
ful dynamics34, this means more and more wealth goes to the richest people at
the expense of everyone else. The more revenue that is spent on wages, work-
ing conditions, and environmentally-friendly measures, the less profit there
will be. The more private financial gain is accumulated, the more inequality
there will be – this is especially true in a situation of finite resources and lim-
ited ecological capacity. The greater the extent to which political processes
are influenced by a few businesses and their owners for private gain, the less
social protection and benefits there are for everyone else, including the pro-
tection of nature. In this way, the pursuit of private financial gain is at odds
with meeting everyone’s needs within ecological limits. (Papers 1 and 3)
As such, economic growth, environmental degradation, and inequality are
not separate problems that require separate solutions. In fact they cannot be
resolved separately, because they have the same drivers in the for-profit econ-
omy and, as such, they come as a package deal. Without addressing this deeper
structural pathology, the systemic transformations necessary for sustainability
are unlikely to happen. (Papers 1 and 3)

Balancing the for-profit dynamics

To the extent to which economic activity is carried out by for-profit entities
in an economy, these dynamics are likely to be present. In other words, the
more for-profit an economy is, the more one would expect to see these dy-
namics. The more social benefit is incorporated into the economy (e.g., via
hybrid business types, government programs, corporate social responsibility,
not-for-profit organizations, and philanthropy) the slower these destructive
dynamics will tend to play out (Figure 8). The effectiveness of these measures
of course depends on how they are undertaken. And it is important to always
keep tradeoffs in mind. More reinvestment in social benefit equates with less
private distribution of profit, from a post-growth sustainability perspective.
There is no easy way out of this conundrum for those who would seek to in-
crease benefits for people and the planet, and simultaneously increase profits
for investors. (Papers 1 and 3)

34
These are archetypal system dynamics in which those who have the most, gain the most. In
sociology, this is also known as the Matthew effect of accumulated advantage (Rigney 2010).

67
 Figure 8: Hybrid economy dynamics from Paper 3
Redistributive taxes and regulations that protect social stakeholders and the
environment can balance the negative effects of these dynamics to some ex-
tent. However, after a certain amount of wealth is accumulated by a handful
of business owners, they tend to use their wealth and power to influence pol-
icy-making in ways that help them accumulate even more wealth, driven by
the desire for financial gain, thus weakening the regulations and taxes that
would provide balance to the system (and reduce their financial gain). It is
worth emphasizing again that this is the rational thing for them to do, accord-
ing to the neoclassical definition of “rationality”, which is widely accepted in
capitalist societies. (Paper 3)

A not-for-profit economy would be more sustainable

A sustainable post-growth economy, then, is one in which there is no fi-
nancial gain purpose or private financial rights in the legal structures of eco-
nomic institutions. In a sustainable economy, there are limited or no financial
returns on investment. Any profit and indeed any revenue in such a system is
seen as a means to a socially-useful end, rather than an end itself. The surplus
is reinvested in ways that result in circulation rather accumulation of wealth,
ensuring that everyone’s needs are met within ecological limits. Likewise, any
profit generated in a sustainable economy must be generated in non-exploita-
tive ways. Surplus should also be used for ecological protection and regener-
ation. (Papers 1 and 3)

68
 An economy of not-for-profit forms of business would be more balanced.
Because investment is driven by the desire to meet social needs and solve
problems, there is a feedback of information that signals whether there has
been enough investment in a given activity (Figure 9). When a problem has
been solved or a need has been met, it is not necessary to invest more in that
challenge. For instance, when every child in a community has enough healthy
food everyday, then there is no need to increase investment in solving the
problem of child malnutrition in that community. Perhaps some level of steady
investment is needed in order to maintain the satisfaction of nutrituional needs,
but there is nothing inherent in the NFP framework that would imply endlessly
growing streams of investment, food production, and profit to improve child-
hood nutrition. In contrast to the insatiable desire for financial gain, people’s
material needs can be fulfilled and social issues can be resolved. On a planet
of ecological limits, this type of feedback signaling that sufficient economic
activity has taken place is essential. (Paper 3)

Figure 9: Not-for-profit economy dynamics in Paper 3

An NFP economy would entail higher levels of economic equality, due to
the lack of private financial rights and private distribution of profit, as well as
the lack of a built-in incentive to suppress wages. Such an economy would not
systemically drive consumerism, economic growth, environmental degrada-
tion, market concentration, and political capture as the FP economy tends to
do. This does not mean that these problems could not exist in an NFP econ-
omy, but rather that there is nothing about the institutional elements of the
NFP structure that would make these dynamics likely to happen. (Paper 3)
Thus, an NFP economy allows for addressing social and ecological prob-
lems in ways that the FP economy does not. Sustainability science and post-

69
growth economic approaches often focus on balancing the detrimental dynam-
ics of the for-profit economy; such as internalizing externalities via taxes; in-
creasing government regulation of market activity; offering a universal basic
income; increased sharing of resources; ecological allowances for firms; and
reducing the work week to name a few. It can be expected that such
sustainability interventions would be easier to implement in an NFP economy
as compared to an FP economy, as there are not the same kinds of inherent
contradictions and conflicts of interest (e.g., companies motivated by private
financial gain to keep information from consumers and disregard environmen-
tal regulations; or owners motivated by private financial gain to hide their
money in tax havens; etcetera). When it comes to situations involving
tradeoffs, profit is more likely to be prioritized over social and environmental
concerns in an FP firm than in an NFP firm. (Papers 1 and 3)
It is worth reiterating that Paper 3 is an analysis of how institutional struc-
tures at the micro level can help explain dynamics at the macro level, which
in turn influence the behavior of micro-level actors. It is not a claim that all
for-profit businesses behave unsustainably and all not-for-profit businesses
behave sustainably. The focus is on institutional structures, not agents; on the
rules of the game, not the players. However, the next research question ad-
dresses concerns about what else it might take to ensure that individual busi-
nesses are post-growth-compatible.

Relationship-to-profit and other dimensions of business

Research question 4: How can relationship-to-profit be understood in the

context of other approaches to sustainable business?

Although relationship-to-profit is clearly important for the sustainability of

an economy, there is much more to business. Attention must also be paid to
four other dimensions of the firm identified in the post-growth literature: in-
corporation structure, governance, strategy, and size and scope. How do all of
these dimensions fit together?
Relationship-to-profit is a foundational dimension of business, as it guides
and constrains the other dimensions and is less changeable, due to its legally-
binding nature (Figure 10). As a formal regulative institution, relationship-to-
profit determines the range of ways in which businesses are allowed to (or
must) prioritize, pursue, and use profit. (Papers 3 and 4)

70
 Figure 10: Five Dimensions Framework in Paper 4
In addition to guiding and constraining other dimensions of business, it is
important to keep in mind the different aggregate dynamics that could be
expected from FP versus NFP types of economies. In this way, the market
dynamics driven by relationship-to-profit also guide and constrain the other
four dimensions of business (perhaps especially the strategy, size and
geographical scope). Any argument that for-profit types of business are
compatible with post-growth futures must address these dynamics. Therefore,
it is important to think about all five dimensions of firms when assessing their
current post-growth compatibility and how they might need to change in order
to become compatible with post-growth organizing. (Papers 1, 3, and 4)
Incorporation structures inherently have a legally-binding relationship-to-
profit (e.g., shareholder corporations are for-profit, while charities are not-for-
profit) and Paper 2 shows that incorporation structures are consistent and co-
herent in how they approach profit. As such, it might seem that there is no
reason to focus much on RtP because it is already embedded in incorporation
structure. However, Paper 4 outlines three good reasons to focus on RtP in
sustainable economy and sustainable business analyses. First, there is a
widespread lack of awareness of not-for-profit forms of business and a
common assumption that business is naturally for-profit. This assumption
might be keeping people from imagining and enacting more sustainable alter-
natives, so it is important to draw attention to the overlooked phenomenon of
NFP business. Second, there is a lack of clarity about financial rights in some
types of incorporation structure (e.g., the community interest company in the
UK and social cooperatives in southern Europe). Lastly, different kinds of
incorporation structures entail different ranges of acceptable business
behavior – yet, all for-profit incorporation structures allow for surplus to be

71
pursued as an end, in terms of private financial rights and voluntary objectives.
(Papers 2 and 4)
Relationship-to-profit theory clarifies that different types of business
structures align with, or inhibit, sustainability-oriented objectives and actions.
This does not imply that strategy and governance are unimportant, but rather
that legal business structures guide and constrain what kinds of strategies and
governance a business might use, due to the legal purpose and financial rights.
Therefore, alignment with post-growth aims should be sought along all five
dimensions of the firm. (Paper 4)

Overview of relationship-to-profit theory

In summary, the emphasis of relationship-to-profit theory is not on profit
itself – but rather on why, how, and for whom profit is generated and used.
This theory clarifies that profit is not inherently sustainable or unsustainable.
Rather, it is whether profit is sought as a means or as an end that determines
if exploitative strategies are incentivized or not. This distinction in approaches
to profit is embodied in the legal purpose and financial rights of relationship-
to-profit.
The RtP of business plays a key role in driving larger system dynamics,
because it gives legal guidance and constraints for what kinds of ends and
means are appropriate. For-profit forms of business allow for (and even incen-
tivize) unsustainable behavior and market dynamics. Not-for-profit forms of
business, on the other hand, are constrained in ways that better align with the
aims of sustainability and, thus, better allow for sustainable outcomes. Im-
portantly, RtP is a formal regulative institutional element of firms that is
tightly connected to the social norms, logics, and belief systems of a society
and of the firm itself. While the for-profit way of organizing business and
markets aligns with the informal institutions of capitalism and the growth-
based economy, the not-for-profit way of organizing business and the econ-
omy aligns better with the informal institutions of post-growth aims and prac-
tices (Figure 11).

72
 Figure 11: Relationship-to-Profit Theory

This theory offers a clearer identification and explanation of the drivers and
causal mechanisms of economic growth and global sustainability problems.
Social and ecological issues are commonly framed as “market failures” in eco-
nomic analyses. However, RtP theory re-frames these issues as direct
consequences of exploitative profit-seeking strategies used by companies that
are set up with the purpose and right to pursue private financial gain for their
owners in a for-profit market. This improved understanding of the problem
allows for a better identification of potential interventions.
Businesses and the aggregate economy are usually treated as existing on
two separate scales and the interactions between them are not granted much
attention in the literature I reviewed here. This is problematic as it causes
scholars to overlook the central role of business in driving sustainability prob-
lems. Relationship-to-profit theory posits that not only do all businesses have
a relationship-to-profit, but entire industries, markets, and economies can also
be characterized as predominately for-profit or not-for-profit.

73
 One can take any business or industry as an example. If that business or
industry is FP, there are incentives for it to drive:

• overconsumption via advertising and planned obsolescence;

• inequality via wage suppression and accumulation of private wealth by
business owners;
• market concentration via growth, collusion with other successful play-
ers, and buying out less successful players; and
• political capture via lobbying and revolving doors.

All of these strategies have negative impacts on society and the

environment. The more profit-driven a business, market, or society is (in both
its formal and informal institutions), the more visibly and the faster one can
expect to see these trends play out. Furthermore, businesses that try to act
sustainably in such a market or industry will be swimming against the tide.
If private gain and social benefit are often at odds in a world of ecological
limits, as I have explained above, then the key challenge for sustainability
theorists, policy-makers, and practitioners is to align the formal and informal
institutions, both within and outside of business, in ways that prioritize social
benefit and environmental protection over private gain. There are regulative
institutions that are internal aspects of business itself (i.e., the firm’s legal
structure) and there are regulative institutions that are external to business and
are meant to guide and constrain businesses in the market (as shown in Figure
4).
In sustainability research and activism, there is often a focus on the use of
taxes and regulations to correct or constrain the market (perhaps due to the
assumption that business is naturally or necessarily for-profit). Here, I have
made the case that it is not a coincidence that government regulations are fail-
ing to constrain unsustainable profit-seeking, but rather it is a logical outcome
of the for-profit economic system. This has to do with the interplay and align-
ment between formal regulative institutions and informal normative and cul-
tural-cognitive institutions. In a social context in which the dominant informal
institutions measure success in pecuniary terms and ascribe to an exchange-
based notion of value, then even when regulative institutions outside the firm
try to prevent social and ecological exploitation, they are not effective. This is
because the for-profit firm (as a regulative institutional dimension) aligns with
the money-driven normative and cultural-cognitive institutions of capitalist
society. This alignment gives profit-seeking firms legitimacy and a way to
justify their profit-seeking strategies within such social contexts. They are do-
ing what they are expected to do: make money. In contrast, the regulative in-
stitutions of the state that aim to constrain profit-seeking are at odds with both
the financial gain purpose and the private financial rights embedded in the for-
profit business structure, as well as the corresponding norms, logics, and be-
liefs of money-driven societies.

74
 In this way, the formal and informal institutions of neoliberalism, with its
drive for free markets and deregulation, are more internally consistent and
aligned than those of a highly-regulated, highly-taxed for-profit market,
driven by private financial gain. The push to use government regulations to
constrain the profit-seeking impulses of profit-driven businesses and markets
is riddled with institutional misalignments and contradictions. The more
aligned the for-profit structure is with wider social expectations, the more le-
gitimate profit-seeking will be. Laws and regulations to protect the environ-
ment, workers, and consumers will only be effective when they are not at odds
with the institutional elements of business themselves. This means that one
should not expect to be able to tax and regulate the economy in ways that lead
to sustainability outcomes, without also moving away from the formal and
informal institutions of the for-profit economy. Any claim that the for-profit
economic system can be made sustainable must contend with the dynamics in
Paper 3.
Even though moving away from for-profit business structures is probably
necessary for sustainability, that does not mean that such a shift would be
sufficient. The other post-growth principles mentioned in the Background
chapter are also necessary for a sustainable economy: laws that ensure social
and ecological justice; democratic and collaborative decision-making; wellbe-
ing-based measures of prosperity rather than monetary or consumption-based
measures; material sufficiency or minimalism; local production and
consumption; sharing of resources; and circular production and consumption
(e.g., reuse, repair, refurbish, and repurpose). Paper 4 explores some of the
other necessary conditions specific to business. Taken together, these might
be the necessary and sufficient conditions for post-growth sustainability.
The answers to my four research sub-questions, and the papers that con-
tribute to those answers, are displayed in Table 1. These can also be seen as
the key propositions of relationship-to-profit theory.

75
 Table 1: Summary of answers to research questions

Research Question Answer

What are the necessary • Profit should be seen as a means, rather than an end
and sufficient conditions in itself. Economic institutions should be designed
for socially and ecologi- to pursue use-value (e.g., social and ecological
cally sustainable profit? value) rather than exchange-value (e.g., money).
(Paper 1)

• Profit should not be generated from social exploita-

tion. Non-exploitative profit can only come from ef-
ficiency gains or willing and informed contributions
from social stakeholders. (Paper 1)

• Some ecological harm will inevitably be done in the

production of goods and services, but it should be
minimized to preserve biosphere functioning while
still meeting everyone’s basic needs. Business strat-
egies that derive profit from unnecessary ecological
exploitation should be avoided. (Paper 1)

• Profit should be reinvested or distributed for social

and ecological benefit, rather than private financial
gain. (Paper 3)

How do businesses relate • Businesses can relate to profit as a means or an end,

to profit? which is indicated by voluntary objectives and fi-
nancial rights. (Paper 2)

• Businesses relate to profit through their: investment

structure, financial rights, legal purpose, voluntary
objectives, and strategy. Relationship-to-profit en-
compasses the first three aspects and guides and
constrains the latter two. (All papers)

76
 How does relationship-
to-profit affect social and
ecological sustainability?
• The desire for financial gain incentivizes business
managers to use exploitative strategies and business
owners to accumulate wealth. These aspects of the
for-profit type of economy drive consumerism, eco-
nomic growth, environemental damage, inequality,
market concentration, and political capture. (Paper 3)

• The social benefit purpose and collective financial

rights of not-for-profit forms of business do not al-
low for accumulation of wealth by private business
owners. The desire for social benefit would not be
expected to systemically drive consumerism, eco-
nomic growth, environmental damage, market con-
centration, and political capture as the for-profit type
of economy does. Instead, the desire for social ben-
efit would guide investment to social and environ-
mental purposes. (Paper 3)

How can relationship-to- • Relationship-to-profit and incorporation structure

profit be understood in
the context of other ap-
proaches to sustainable
business?
give legal guidance and constraints as to whether a
business can pursue profit as an end. (Paper 2 and 4)
• Relationship-to-profit guides and constrains other
aspects of business that have been identified as im-
portant in the sustainable business literature: incor-
poration structure, governance, strategy (including
voluntary objectives), size and geographical scope.
(Paper 4)

• Attention should be paid to all five of these dimen-

sions of business in post-growth transformations.
(Paper 4)

There are five more dynamics that are not explained in the papers, but are
still very important for RtP theory:

1) Painful balancing loops in the long-term

At some point environmental damage and inequality become bad enough
to disrupt social and economic systems. In the analysis of the for-profit ideal
type economy (Paper 3), one can imagine a causal link back from the
environmental damage variable to the production variable, with a delay. This
is because environmental issues like climate change, biodiversity loss, pollu-
tion, and resource shortages will decrease the quantity and quality of the goods
and services that economic activities can produce (Rockström et al. 2009).
Research in the fields of peace and conflict, as well as military and security
studies, highlights the ways in which shrinking resources and worsening eco-
logical conditions might also lead to increasing levels of conflict (Schellens

77
2020). Likewise, at some point, ecological problems, inequality, and political
capture can be expected to destabilize social and political systems (Suša
2019).
Therefore, inequality and environmental damage can be expected to
balance the system in the long-term, but in very disruptive ways that have
serious consequences for human and ecological wellbeing (as explored in the
Limits to Growth report (Meadows et al. 1972)). These disruptions are a large
part of the motivation for promoting economic transformations as soon as pos-
sible.

2) Workers in a for-profit economy are in a lose-lose situation

Most workers in the FP type of economy are in a lose-lose situation. The
more they work for for-profit firms35, the more they contribute to the dynamics
that drive environmental damage, inequality, market concentration, and
political capture – which harms themselves in the long-term. Yet, if they do
not work, they risk ending up in poverty and subject to even worse
exploitation. Consumers are caught in a similar dilemma. The more they
consume, the more they contribute to these destructive dynamics. Yet, the less
they consume, the less stable the economy will be. This is the case because
with less consumption, fewer investments are made and less work is needed.
This of course, leads to fewer employment opportunities and even layoffs or
wage cuts. If they rely on work for an income, then consumers might be
shooting themselves in the foot in the long-term, by consuming less.

3) Charity-dependent nonprofits in a for-profit economy

The financial dependence of the traditional not-for-profit sector on big for-
profit companies could feed into the reinforcing dynamics of market
concentration and inequality in the for-profit economy. This is the case when
large for-profit businesses fund nonprofit activities in order to better market
themselves and to make sure their money goes to activities that directly or
indirectly benefit themselves (Bapuji et al. 2018).36

4) Financialization
Financialization is not directly discussed in this thesis, but we did discuss
financialization as a natural tendency of the for-profit economy in Hinton and
Maclurcan (2016, 114–16). Financialization can be framed as a profit-seeking
strategy, from the RtP perspective presented in this thesis.

35
Particularly those companies that distribute profit to owners (or intend to do so) and those
that explicitly pursue profit as an objective (Paper 2).
36
This dependence of the traditional nonprofit sector on the for-profit economy is referred to
as the Nonprofit Enabler in Hinton and Maclurcan (2016, 121–25).

78
 5) Land and real estate
Lastly, a significant amount of wealth is accumulated through private fi-
nancial rights pertaining to the ownership of land and real estate (Harvey
2015). Relationship-to-profit theory does not deal directly with issues of land
ownership, however, much of the wealth accumulated from land ownership is
done via for-profit business frameworks (for instance, real estate development
firms and holding companies). Therefore, the emphasis on the legal purpose
and financial rights of RtP is very relevant for understanding the (un)sustain-
able dynamics of land management and ownership. Furthermore, the NFP
World model describes the importance of NFP land ownership frameworks,
such as community land trusts, to avert the private accumulation of wealth
from land ownership (Hinton and Maclurcan 2016, 190–92).

Boundaries and limitations of the relationship-to-profit

theory
As with any theory, there are limits to the generalizability and applicability
of relationship-to-profit theory. Yet, given the fact that the global economy is
largely for-profit, these limits allow for a broad range of generalizability and
applicability.
The RtP theory is useful for understanding sustainability problems that
have an economic component, especially for identifying economic drivers of
social and ecological sustainability issues. It will not be useful for analyses
that have no economic component. However, it can encourage discussions
about whether or not there is an economic component to a sustainability issue,
because it brings the issues of how business, profit, and financial rights impact
social and ecological systems to the surface. For instance, the issue of green
architecture might not, at first glance, seem to have a specifically economic
dimension. However, the RtP theory encourages the discussion of the ways in
which architect firms, banks, and public agencies involved in green architec-
ture relate to profit - and whether those relationships to profit might be helpful
or problematic for sustainability.
This theory is only directly relevant to societies that have a predominantly
for-profit economy or are being impacted by the global for-profit economy.
This theory would not be useful for analyzing remote societies that do not use
legal frameworks for conducting business and that are not impacted by the
for-profit economy. However, it is useful for understanding sustainability is-
sues in societies that are impacted by the dynamics of the global for-profit
economy, even if those societies themselves do not use legal vehicles for con-
ducting business.

79
A note on relationship-to-profit as a legal framework
The RtP theory relies to a great degree on the power of legal frameworks
in guiding and constraining actors’ behavior and the economic system’s dy-
namics. If there is no rule of law to enforce the rights and responsibilities of
legal frameworks, this theory might lose some of its explanatory power. How-
ever, the importance of business purpose and entitlements remains, even if not
enforced by a legal authority. An economy wherein the production and distri-
bution of goods and services is based on the purpose of private financial gain
and systemically delivers the surplus of those economic activities to private
individuals would tend to have the same problematic dynamics of the FP econ-
omy, whether or not legal frameworks are used. An informal economy can be
organized in a for-profit way, as many informal markets are. Likewise, an in-
formal economy in which the production and distribution of goods and ser-
vices are oriented towards delivering social benefit and all surplus is chan-
neled into addressing social challenges (as in many peasant and Indigenous
economies) would tend to have the same kinds of dynamics as an economy
composed predominantly of NFP businesses.
There is also the issue of how “social benefit” is defined and by whom. In
terms of NFP structures, it is the state that defines social benefit. However, I
do not assume that all states can and should be trusted to define social benefit
in ways that align with society’s needs and challenges, including sustainability
challenges. Indeed, some of the earliest corporate charters in the 16th and 17th
centuries required that companies have a public benefit purpose, but that pur-
pose could mean bringing back riches from exploited colonies for their inves-
tors, who were political and economic elites in Europe (Micklethwait and
Wooldridge 2003). (Modern definitions of public benefit purpose tend to be
much more clearly limited to activities that serve the wider public).
In order for the NFP legal framework to offer the potential of a sustainable
alternative to the FP framework, the “social benefit” mission of NFPs must be
defined using a democratic and transparent process. Existing definitions of
“social benefit” should also be adaptable in response to feedback from the
public, in order to stay aligned with society’s needs and challenges.
The extent to which any regulative institution is effective and useful de-
pends on the consistent enforcement of the institution. The rights and respon-
sibilities of not-for-profit businesses are enforced through legal authorities,
tax agencies, and boards. Beneficiaries, customers, and the general public also
play an important role in holding NFP businesses and their employees and
managers accountable. If any or all of these actors are not playing their role in
making sure that NFP businesses stay within their legal rights and fulfill their
legal responsibilities, there is a risk of the NFP framework not being as effec-
tive as it would otherwise be. In the worst case, NFP businesses could be
widely used in corrupt or illegal ways. This might diminish the social trust in
the NFP framework that is an essential ingredient in the vision of the NFP
World model.

80
 However, without a corresponding shift in values and social norms, a trans-
formation away from the FP economy is not likely or even possible in the first
place. It would not make sense to expend the energy necessary to transform
the regulative dimensions of the economy from FP to NFP forms of business,
but allow NFP businesses to act like for-profits. One would assume that there
would be a high level of commitment across society to maintaining the integ-
rity of the not-for-profit framework in alignment with deeper sustainability-
driven norms, logics, and belief systems.
It is worth noting that doubts about the feasibility of NFP economic trans-
formations do not represent a valid challenge to relationship-to-profit theory.
Such transformations are a matter of societal and political will. There were
many who thought that women’s suffrage, the abolition of slavery, the end of
Apartheid in South Africa, and Indian independence from the British Empire
were politically impossible as well. History has shown that when social norms
have shifted and there is political will, a transformation path is forged.

Applying relationship-to-profit theory

In practical research terms, RtP theory can be used as a basis for collecting
and analyzing data in sustainability-related scholarship. One can formulate re-
search questions in a way that takes a critical approach to the links between
sustainability and for-profit institutional elements (i.e., private financial
rights, financial gain goals, private equity in companies, profit-seeking, and
the private distribution of profit). In order to apply RtP theory, throughout the
research process from design to analysis, it is important to keep in mind that
businesses and markets cannot be treated as separate or isolated from each
other. Markets have a dominant RtP, based on the types of business that con-
stitute the market. Furthermore, businesses drive market dynamics and are, in
turn, impacted by those dynamics.
On the level of business, one can conduct comparative case studies in
which data is collected about the extent to which different businesses are sus-
tainable, in terms of their five dimensions (relationship-to-profit, incorpora-
tion structure, governance, strategy, size and scope). For example, a few dif-
ferent grocery stores could be compared using the five dimensions framework
and the RtP theory of how those dimensions drive larger dynamics. Of course,
it is important to keep in mind that there are for-profit businesses that act like
not-for-profits (i.e., they reinvest all of their profit into social benefit mis-
sions), so it is good to investigate how a business uses its profit (which relates
to the strategy dimension) and if it has a social benefit mission written into its
charter (relating to its incorporation structure). It is also important to know
what the business’s investment structure is, in order to understand what kinds
of pressure to generate a profit there may be on the company – this again,
relates to the incorporation structure dimension.

81
 This theory could also be used to understand the larger-scale dynamics of
a supply chain, an industry, a market, a national economy, or the global econ-
omy. For instance, in the medical supplies sector, using the RtP theory one
would anticipate that for-profit medical supply companies will use profit-
seeking strategies (such as planned obsolescence, keeping wages low for un-
skilled workers, inflating prices, and lobbying for subsidies) in order to enrich
their owners. Some of the impacts of these strategies that would play out over
time include:

• increased healthcare costs, which harms consumers and society;

• increased material use for producing medical equipment (some of which
requires rare earth minerals in conflict zones), which harms the environ-
ment and local communities who must deal with the environmental prob-
lems;
• increased inequality;
• increased market concentration;
• deregulation and tax cuts for the sector; and/or
• the sector moving offshore to locations with lower wages and fewer legal
restrictions on business activities.

Although societies need medical equipment, it can likely be produced, dis-

tributed, and disposed of in more sustainable ways via not-for-profit busi-
nesses and organizations. If the drive for private gain and private financial
rights are removed from this system and replaced with a focus on social ben-
efit, there would be different dynamics. Therefore, it would be worth compar-
ing medical supply markets that have a higher percentage of FP companies to
those that have a higher percentage of NFP companies.
Important to note here is that medical innovation is often done by public
universities and other not-for-profit organizations (Fox 2017), so removing
the profit motive will not necessarily lead to less innovation (as the capitalist
ideology would retort). Indeed, some experts believe that large for-profit phar-
maceutical firms may be hindering proper innovation because the increasing
financial dependence of medical researchers on big pharma makes them bi-
ased (e.g., Bracken n.d.).
The same kind of analysis can be done on any sector, such as the energy,
food, education, and manufacturing sectors. In fact, it would be useful to con-
duct such analyses in every sector of the economy (taking into consideration
cross-scalar interactions and feedback loops). Even in markets where there are
few NFPs operating, it is worth exploring how the profit motive and the pri-
vate distribution of profit might be driving the trends covered in Paper 3, in
order to test this theory.
The RtP theory can also be used to analyze and understand why more ef-
fective sustainability interventions have not been adopted or are not fully im-
plemented. For instance, many sustainable agriculture experts have advocated
for small-scale, agroecology approaches to food production (Piemontese

82
2020). The RtP theory sheds light on why, globally, the agriculture sector
seems to be moving in the opposite direction. Agroecology is based on using
no or few external inputs (such as fertilizer or pesticides) (Piemontese 2020).
This would mean fewer sales and less profit for the companies who produce
those inputs. Agro-industry companies such as Monsanto (now owned by
Bayer through a mega-merger) spend large sums of money lobbying against
policies that would support such a transition, in order to protect their profita-
bility (Holland and Sourice 2016) – and that is the rational thing for them to
do, according to the capitalist definition of “rationality”.
One could also use this theory to compare national economies in terms of
the percentage of NFP businesses in the market (keeping in mind that they
must generate 50% or more of their revenue through the sale of goods or ser-
vices to be considered a business). Relationship-to-profit theory tells us to ex-
pect that the more for-profit an economy is (in terms of the mix of business
types in the market) the more evident the trends of consumerism, environmen-
tal harm, inequality, market concentration, and political capture will tend to
be. This might be the case if one compares the United States to Nordic coun-
tries, for instance. Furthermore, one could also break the national comparison
down to sectors, probing the social and ecological outcomes of a largely FP
healthcare system in one country to a healthcare system that has a larger mix
of NFPs (including state-owned enterprises) in another country.
A brief exploration of Sweden’s national economy can demonstrate the ap-
plicability and usefulness of RtP theory. Despite its reputation as having a
more socialist flavor of capitalism, Sweden has one of the fastest increasing
rates of inequality in the world (Therborn 2020). Might this be related to the
dynamics of the for-profit economy? The evidence seems to support the RtP
theory: that Sweden’s rising inequality is due to wealthy businesses and own-
ers lobbying against taxes; deregulation; increasing for-profitization of the
healthcare and education systems; an employer’s movement against trade un-
ions and public services; stagnating wages; hoarding of wealth by millionaires
and billionaires; and financialization (Therborn 2020).
The scope of RtP theory’s applicability and its usefulness in explaining
(un)sustainable dynamics of the economy are far-reaching. And I encourage
other researchers and practitioners to apply this theory in the interest of testing
its strengths and exposing its weaknesses. This is an essential part of how sci-
ence and society progress.

83
 Discussion: Insights for sustainability research
and practice

In this chapter, I identify the main insights of the relationship-to-profit the-

ory that can contribute to ongoing discussions in the field of sustainability
research and practice. This includes: the centrality of financial rights; the im-
portance of using clear concepts and terminology; the importance of having
clear limiting principles that allow for diversity to flourish; and potential lev-
erage points for sustainability transformations. I then identify some important
questions for further research and offer some concluding remarks about the
implications of this thesis for sustainability in practice.

Beyond “ownership”: The centrality of financial rights and

the purpose they serve
Business ownership is a murky topic. Ownership is often described as a
bundle of rights (Kelly 2012). In many definitions and in common usage, the
concept of “ownership” mixes two things together: control rights and financial
rights. Business ownership can be defined by control rights, financial rights,
or both; and various theorists have approached the issue differently (Walker
2017). This thesis makes the case that it is important to explicitly distinguish
between these types of rights when it comes to sustainability.
Through this research, I have come to the realization that financial rights
should be a central part of any discussion of the economy and sustainability.
Like all legal rights, they serve a purpose. If financial rights are assigned to a
private business owner, they entitle that person to a share of the company’s
financial surplus and assets. Thus, it can be said that those financial rights
serve to enrich that owner. If the financial rights are assigned instead to a char-
ity that helps children with learning disabilities, those financial rights serve
the purpose of helping satisfy those children’s learning needs. In the latter
case, the financial surplus is seen by the business and the charity as a means
of achieving those outcomes, whereas in the case of the private owner’s finan-
cial rights, the surplus is seen as an end itself – a deliverable. What the busi-
ness owner decides to do with the money is totally beyond the scope of the
business’s concerns.

84
 It is through private financial rights (and the financial gain purpose that
they serve) that private wealth is relentlessly pursued and accumulated in the
for-profit economy, resulting in social and ecological sustainability crises.
Therefore, any discussions of sustainability transformations must address the
various ways in which financial rights can be assigned and configured, and
what the social and ecological implications of those configurations are.
I was surprised to discover how inconsistently the concept of business own-
ership is used in all of the bodies of literature I reviewed for this thesis, given
how central it is to the economy, and as a defining feature of capitalism. When
the term “owner” or “ownership” is used, authors do not often explicitly spec-
ify whether they are defining the term as control rights, financial rights, or
both. As a result, control rights and financial rights are often conflated. I found
this to be the case in both the grey literature (e.g., Solidarity Economy Map
and Directory 2020) and the academic literature (e.g., Johanisova, Crabtree,
and Fraňková 2013).
Because the term “ownership” is typically used to refer to both financial
rights and control rights, NFP organizations have sometimes been labeled as
being privately-owned (e.g., Alchian and Demsetz 1972, 795; Johanisova,
Crabtree, and Fraňková 2013, 13) or even as having no owners (Borzaga and
Tortia 2007). When authors have referred to NFP businesses as “privately-
owned”, they are implicitly defining ownership as control rights. The “no
ownership” label defines ownership as private financial rights. The “collec-
tive ownership” label for NFP, which I use in Paper 3, defines ownership in
terms of financial rights (i.e. the financial rights belong to a collective entity,
so the ownership is collective).
Adding to the confusion, “collective ownership” of business is often taken
to mean either state ownership (i.e., owned by a government authority, at the
national, state, or municipality level) or worker ownership (which typically
entails private financial rights). There is very little mention of non-state col-
lective ownership - legal entities separate from the state that have no private
financial rights. The latter requires a rethinking of mainstream notions of busi-
ness ownership (i.e., public and private ownership), which are separated along
the lines of state and market in ways that assume that non-state market actors
are always privately-owned (e.g., Demsetz 2002).
Given the centrality of financial rights in sustainability issues, but wide-
spread lack of awareness and understanding of this type of rights in business,
it is important to demystify this term for transdisciplinary discussions. This is
especially important in the post-growth context, as democratic governance is
a core principle, which is all about control rights. Thus, the preclusion of pri-
vate financial rights and the ability to have democratic control rights are two
key aspects of post-growth-compatible business. The clear conceptualization
of RtP in this thesis is helpful in making this difference explicit and can inform
a more accurate and comprehensive discussion of business ownership.
Part of the reasoning behind the Five Dimensions framework presented in
Paper 4, was to help keep this distinction between financial rights and control

85
rights clear. In the framework, financial rights are found in the relationship-
to-profit and incorporation structure dimensions, while control rights are
found in the governance dimension. In for-profit firms, the same people can
have financial rights and control rights, such as owner-managers in a small
business, shareholders with voting rights in a corporation, or worker-owners
in a worker cooperative. But the framework clearly distinguishes between fi-
nancial and control rights, even when there is not a distinction between the
people who have those different rights. For example, in a worker-owned co-
operative, the workers usually have control rights and financial rights (but
there is no reason why they must have the latter, as I will discuss below in the
section on Revisiting cooperatives). Due to the lack of private financial rights,
NFP structures give managers control rights but not financial rights.
Another point that Paper 4 clarifies is that, in for-profit businesses,
financial rights represent the ultimate right to control a firm (with the
exception of non-voting shares), because financial owners are able to hire and
fire managers (those who have control rights but no financial rights) (Alchian
and Demsetz 1972). Furthermore, those who possess the financial rights of a
company can sell or shut down the company, which obviously has major
implications for the management of the firm.
The bottom line is that sustainability discussions need to include the topic
of financial rights.

Clearer concepts and terminology

As an institutional theorist, I am acutely aware of the importance of framing
and naming concepts. The language we use and the stories we tell about the
economy are cultural-cognitive institutional elements that have the power to
shape beliefs, social norms, and peoples’ actions. The point of sustainability
research is to inform change for a more sustainable and just world. Therefore,
the accessibility of the terminology and ideas in the field of sustainability is
very important. People from different disciplines and different spheres of so-
ciety should be able to use our ideas and terms in the real world.
Some of the ideas that I have found quite useful are coded in heavy jargon
(e.g., Marxian theories of value and market dynamics). As Pirgmaier (2021,
5) points out, the Marxian language is difficult for non-Marxian scholars, let
alone interdisciplinary sustainability researchers to follow. Such approaches
often grant agency to abstract concepts like capital, capitalism, and even value.
They may have reasons for doing this that I have yet to find in the literature,
but it might also be an indication of a lack of clarity about what is actually
driving the system’s dynamics. Some examples of this include:

“The genius of capitalism’s cheap nature strategy was to represent time as

linear, space as flat, and nature as external.” (Moore 2014, 286)

86
 “Through its alliance with state-machineries, imperialist power, and bourgeois
knowledge, capital has proven adept at overcoming real, or impending, ‘bottle-
necks’ to renewed accumulation.” (Moore 2014, 289)

“In this sense, capital is ‘value that aspires to valorise itself’, the core economic
engine of capitalism.” (Andreucci and McDonough 2015, 60)

In the first quote, how does capitalism have a strategy? In the second quote,
how can capital be adept at doing something? In the third quote, how does
value have aspirations?
Aside from not offering a clear explanation of what is wrong with the cur-
rent system and, thus, what must change, this language keeps non-Marxists
from putting these insights to use. Inaccessible Marxian terminology can, at
least in part, explain why these ideas have not become more mainstream in
discussions about sustainability. It is a pity, because eco-Marxian analyses of-
fer a lot of important insights about the state of the world in the 21st century
that could help the sustainability movement (and have helped me develop the
RtP theory).
Pirgmaier (2021) shows that it is not impossible to explain, for instance, a
Marxian theory of value to an interdisciplinary readership in non-jargon terms
(or at least minimal jargon that is clearly explained). (Yet, even Pirgmaier
writes about abstract socially necessary labour time). As an exception to the
rule, Magdoff and Foster (2011) did an excellent job of making the basic eco-
Marxian analysis accessible to a wide readership.
Yet, it is not only the overly-heavy jargon that is problematic. There is also
a widespread issue with using under-specific terms. For instance, the
frenquent post-growth references to “the market” and “market logic” (e.g.,
Schmid 2018) imply that markets are a monolith, even when some central
post-growth scholars have gone to great pains to show that they are diverse
(e.g., Gibson-Graham, Cameron, and Healy 2013). In the business literature,
the term “value” is used in so many different ways that, without defining it, it
becomes almost meaningless. As described above, the same is true for “own-
ership”.
Thus, there is a need to strike the right balance between simplifying the
complexity of phenomena and being precise enough to separate out what is
problematic from what is not. I would argue that the terminology presented
and used in this thesis offers more accessible, precise, and concrete language
for central aspects of the economy. I have intentionally tried to use and create
terms that demystify complex phenomena and ideas for a transdisciplinary
readership. For instance, terms like “capitalism” and “capital accumulation”
are often used in vague and implicit ways in post-growth literature (Pirgmaier
and Steinberger 2019). The term “for-profit economy” demystifies capitalism
(Hinton and Maclurcan 2017). Likewise, the term “for-profit business” de-
mystifies “capitalist firm”. Tracking flows of money in terms of investment,

87
revenue, and profit helps clarify how and where “capital accumulates”. Finan-
cial rights and the financial gain purpose of for-profit business helps demystify
why capitalist firms and capitalists seek and accumulate capital. Identifying
business owners as those who hold financial rights in a business demystifies
which actors are capitalists. Identifying the for-profit business structure as
problematic, keeps the focus on specific system structures rather than the cap-
italists or an abstract “capital”. Identifying a limited number of sources of
profit by means of examining common profit-seeking strategies used by firms
on the ground, helps demystify value. The clarity and concreteness of these
concepts and terms allows for more effective discussions, analyses, and prob-
lem-solving.
Importantly, all of the above insights can help post-growth discussions go
beyond vague and inaccurate generalizations about “the market”, “business”,
“commerce”, and “profit”; generalizations which have been unnecessarily
holding back understandings of possibilities for post-growth organizing. For
instance, the destructive aspect of capitalism is not necessarily the market, nor
competition, nor commerce, nor business, nor profit, but rather the relation-
ship to profit that capitalist societies, markets, and businesses have; the com-
petition for private profit. It is then the for-profit nature of business and the
market in capitalism that is problematic.
On the face of it, this issue of terminology might seem trivial, but it creates
the basis for paradigm shifts. If the key limiting principle is that of the market
economy or commerce, then the state-planned economy quickly becomes one
of the few options left for organizing the economy. If the market were really
the main problematic aspect of capitalism, then the options for sustainable
economic provisioning might indeed be this limited. However, RtP theory ar-
gues that the most problematic aspect of capitalism for sustainability is not the
market economy, but the for-profit nature of most businesses and markets.
This different identification of the problem logically leads to different limiting
principles, and thus a different range of possibilities for organizing sustainable
economic systems.

Diversity, pluralism, and clear limiting principles

In discussions at two different Degrowth conferences, I encountered con-
cerns about the relationship-to-profit theory when it comes to diversity and
pluralism. Diversity and pluralism are core values of most post-growth schol-
ars and activists (see for example the Pluriverse and Diverse Economies re-
search), including myself. As such, it is important to engage fully with these
concerns.
This requires a larger discussion of how to draw limits in a way that
precludes harmful dynamics and still allows for diversity and plurality. It must
be kept in mind that constraining or precluding harmful activities and struc-
tures is very different from constraining human rights and capabilities. When

88
there are limits (such as ecological limits or moral limits to exploitation), con-
straint is an appropriate response. As such, constraints (and the lack thereof)
play a central role in all sustainability problems. I would argue that drawing
lines in the sand about what is socially and ecologically sustainable (and what
is not) is the main issue with which humanity is grappling in the 21st century.
Going back to the concerns I received at the Degrowth conferences, there
is a misunderstanding that because certain initiatives in the post-growth move-
ment are using for-profit structures (such as worker cooperatives), this theory
dismisses, discredits, or alienates these initiatives. My response is that such
post-growth initiatives are more aligned with the social benefit orientation of
NFP structures than the financial gain purpose of FP structures. In most in-
stances, these initiatives have chosen to use an FP structure due to a lack of
awareness of that they could use NFP structures or due to specific challenges
in the local context (as outlined in Paper 4). The RtP theory does not invalidate
or dismiss benevolent for-profit businesses, but rather offers guidance for the
kinds of larger shifts that must happen in society and the economy in order to
escape the systemic lock-ins of an unsustainable system. For instance, if a lo-
cal context does not allow one to easily set up an NFP business, but we know
that FP business entails problematic lock-ins, then the local context needs to
change. Shifting our limiting principles in response to a dysfunctional context
is not going to help the post-growth movement achieve the kind of change
required for sustainability. Again, the focus is on system structures, rather than
individual businesses. As I will discuss below, the existence of well-behaved
for-profit businesses does not provide a good reason for maintaining a for-
profit economy, given its systemic tendencies. Likewise, the existence of a
few bad NFP businesses does not provide a good reason for dismissing the
idea of shifting to an NFP economy.

Problem identification and limiting principles

Ideally, the limiting principles we draw, as researchers and practitioners,
should relate directly to the source(s) of the problem we have identified. Main-
taining a for-profit economy allows employees at worker-owned cooperatives
to have private financial rights, but it also allows for other for-profit incorpo-
ration types. If one wants to keep for-profit cooperatives in the economy but
not shareholder corporations or private equity firms, where should the line be
drawn between these types of business and why? The examples of profit-hun-
gry producer cooperatives and limited liability companies owned by billion-
aire families again come to mind. As I pointed out in the Background chapter,
the limiting principle of a cooperative economy does not directly relate to the
problem of profit-seeking and growth and, as I have shown in this thesis, it is
not non-cooperative business types that are the problem. If the line is drawn
at cooperative versus non-cooperative types of business, it allows for pri-
vately-owned profit-driven cooperatives, but not the many sustainability-ori-
ented NFP businesses that are not cooperatives. This is a discussion that needs

89
to be taken more seriously if post-growth transformations are to be pursued
on a larger scale. As the post-growth project becomes more widely adopted,
it is imperative to have clear guiding principles.

Clarity and precision of limiting principles

An important question about limiting principles is whether they are clear
enough to guide post-growth organizing or if they are wishy-washy and open
to interpretation. For instance, because the term “social enterprise” is a general
category without any strict definition, it is not a good limiting principle. Any
transnational corporation can own and operate a social enterprise. Unilever,
for instance, owns Ben and Jerry’s ice cream, which is often referred to as a
social enterprise (Unilever 2020). Co-optation and greenwashing are very real
concerns in the field of sustainability (Alves 2009). Clear exclusion or limiting
principles can help mitigate co-optation. The RtP theory offers a clear defini-
tion of the problem and correspondingly clear limiting principles.
The metaphor of a strainer or a sieve is useful. The size of the holes is
related to what kinds of things are meant to stay in versus wash out of the
container. Very small holes will keep lentils in, but might also keep sand and
soil in. Yet, large holes increase the risk of losing the lentils. It is all about
finding a strainer with just the right sized holes to get rid of what we do not
want and to keep what we do want.
For-profit initiatives that are sincere about social and ecological justice can
part with their private financial rights without losing their essence. In fact,
getting rid of their private financial rights and the ability to seek profit as an
end might strengthen their commitment to sustainability. Whereas, a large
transnational FP company is going to have to change in fundamental ways in
order to become NFP – and those are also the ways that will result in mean-
ingful outcomes for sustainability.

Revisiting cooperatives
Cooperative structures are inherently tricky to compare to other forms of
business, because democratic governance is written into their incorporation
structure. For instance, while Chaddad and Cook’s (2004) typology of coop-
eratives sheds some light on control rights and financial rights in different co-
operative business types, it is also a good example of how the concepts of
“ownership” and business purpose are often blurred and misunderstood in the
cooperative context. The RtP perspective allows for a clearer comparison of
the different kinds of cooperatives themselves.
The worker cooperative is a for-profit incorporation structure, because the
workers have private equity in the firm and can receive dividends of the profit
(John Pencavel and Craig 1994). In legal terms, it is a form of business that is
democratically governed for the financial gain of the worker-owners. But of
course, a worker cooperative might choose to focus more on social benefit in

90
their strategy. The social cooperative incorporation structure available in some
European countries is a worker cooperative with caps on the distribution, in
order to maintain a focus on social benefit (Ioannis Nasioulas 2012; Borzaga,
Poledrini, and Galera 2017). A worker cooperative could be considered NFP
if it incorporates a legal social benefit purpose and precludes private financial
rights in its legal statutes. These types of models already exist as worker-di-
rected NFP businesses (Chris Tittle 2015).
Consumer cooperatives have no real focus on profit as a goal. Instead,
profit is used to give consumer members better prices on the products they
consume, and perhaps an annual rebate. Whether consumers keep the money
in the first place or receive it as a “dividend” at the end of the year does not
matter to the cooperative, as long as it can cover its costs. The only way
members can capture the value of the cooperative’s activities is by buying its
goods and services (Ruiz-Mier and van Ginneken 2006). Hinton and
Maclurcan (2016) argues that consumer cooperatives and credit unions meet
the legal definition of NFP, because the profit distributed to consumers will
never be more than a fraction of what the consumers have spent into the
company via purchases. So, the patronage dividends from consumer
cooperatives are best thought of as refunds, rather than actual dividends for
private financial gain. In legal terms, it is a form of business that is
democratically governed for the social benefit mission of providing high
quality and affordable products to its consumer-members, who have no
financial rights to take the assets of the cooperative (Ruiz-Mier and van
Ginneken 2006).
Producer cooperatives whose members are for-profit companies
themselves (like many agricultural producer coops) can pursue financial gain
for private owners - albeit indirectly, through for-profit member companies
(Roslynne G. Gall and Schroder 2006). As such, this kind of cooperative is
for-profit. However, one can imagine a producer cooperative whose members
are NFP businesses, in which case no profit would be distributed to private
owners, so this would be an NFP producer co-op.

Revisiting social enterprises and hybrids

“Social enterprise” is not a legal structure of any sort, but is rather a large
category open to interpretation that can include both types of relationship-to-
profit, as well as many different kinds of incorporation and governance
structures (Reiser and Dean 2017). The term “social enterprise” does not
imply any certain criteria for strategy either (Houtbeckers 2018). In other
words, the term “social enterprise” provides limited usefulness for post-
growth scholars and practitioners (Ibid). Drawing the line of what is enough
financial gain for owners and enough social benefit is arbitrary (Isil and
Hernke 2017; Málovics, Csigéné, and Kraus 2008), which leaves the terms
like “social enterprise” and “triple-bottom-line” models open to co-optation
and greenwashing. Such co-optation harms social enterprises that are truly

91
committed to serving the public interest, as the reputation of this whole
category of businesses becomes less trust-worthy.
From an RtP perspective, it is not accurate to imply that there can be FP,
NFP, and hybrid types of business. If a business has a dual purpose (or a hybrid
purpose) of both private financial gain and social benefit, it is considered for-
profit in legal terms. Sometimes, the word “hybrid” is used to refer to business
arrangements in which an NFP owns an FP subsidiary (e.g., Boyd et al. 2017),
as is the case with Greyston Bakery. And sometimes it is used to refer to an
FP that has a contract to work closely with an NFP, channeling some of its
resources to the NFP, like a company that gives 1% of its profits to a charity
(Ibid). The case of the former (e.g., Greyston Bakery) complies with the non-
distribution constraint and can be considered NFP; while the latter is a
collaboration between a for-profit business and a not-for-profit. Therefore, the
word “hybrid” can muddy the waters when it comes to aspects of business that
are key for sustainability. The five dimensions framework in Paper 4 offers
clarity about this.

Allowing for diversity to flourish

I have encountered concerns that the FP/NFP distinction is too black-and-
white, and that transitioning away from for-profit forms of business would
entail a loss of diversity in the economy. This, of course, would be very
relevant for the resilience of NFP economies.
Here it is important to note that the for-profit economy has expansionary
and homogenizing tendencies that crowd out, co-opt, beat out, buy out, and
threaten the survival of smaller, less-profit driven initiatives. The dynamics
explained in Paper 1 and Paper 3 show that maintaining the for-profit economy
is a good way to reduce diversity and plurality, not preserve them. These ex-
pansionary and homogenizing tendencies result in the pushing out or taking
over of the diverse, local community economies that Gibson-Graham and col-
leagues write about. In this sense, the FP economy entails structural violence
and exclusion (Harvey 2015). In the quest for financial gain, social relations
and the natural world are increasingly commoditized (Magdoff and Foster
2011). These tendencies also make the FP economy very vulnerable to shocks
(Moore 2014).
Although, this thesis implies a smaller range of existing incorporation types
compared to the FP economy, it expands the range compared to the common
post-growth vision of a cooperative-only economy. I have been able to shift
my grocery shopping, banking, clothes shopping, and cinema-going, as well
as the electricity and insurance for my apartment to NFP companies. I can
usually find NFP accommodation when I travel. There are myriad NFP res-
taurants and food producers around the world. I would not find cooperative
equivalents in all of these sectors. Furthermore, when it comes to the number
of specific types of business structures that could exist in an NFP economy
and concerns about diversity, it should not be forgotten that new incorporation

92
structures have been developed in recent decades and can be developed in the
future, in response to changing needs and challenges. For instance, an ecolog-
ical mandate can (and should) be added to the regulative make-up of NFP
forms of business.
There are good reasons to expect that an NFP economy allows for more
diversity of organizational forms, values, goals, and strategies than the FP
economy. First, it is not systemically propelled by the conversion of nature
and social relations into money, as the for-profit system is. Because there is
not the inherent drive for growth and commodification, an NFP economy can
be expected to better allow for provisioning outside of the monetized econ-
omy, via sharing and gifts, which is an important aspect of post-growth organ-
izing (Parrique 2019). The NFP economy sits much more comfortably with
the fostering of diverse, traditional, local economies. In fact, many NFP com-
panies use some of their resources to help preserve Indigenous ways of life -
such as Myuma, a civil engineering firm mentioned in Hinton and Maclurcan
(2016). Second, the nature of NFP business itself entails more diversity. Each
NFP business has its own mission. In contrast, FP businesses often stay fo-
cused on the pursuit of profit and the FP market dynamics ensure that most
businesses have to use the same kinds of profit-seeking strategies just to stay
afloat.
In other words, the FP/NFP distinction should not be thought of in terms of
black and white, but rather white and non-white (Lux 2003). There is a wide
range of colors aside from white. As one organizational theorist colleague of
mine put it, RtP is an asymmetrical concept.
If one accepts the claims that for-profit business structures are driving so-
cial and ecological crises, then arguing to keep for-profit business as part of a
sustainable economy because there are some good for-profit companies is a
bit like arguing to keep slavery because there are some compassionate slave-
owners who treat their slaves as equals. If a social structure is identified as
having dangerous, destructive, or exploitative tendencies, it should be
changed or rooted out. It does not make sense to keep it around just because
it is not always destroying and exploiting.
While it is necessary to have positive, constructive principles about what
kind of economy to work towards; it is just as important to draw a line in the
sand and name what is dysfunctional, destructive, and unsustainable about the
growth-based economy - that which must be moved away from and excluded.
A clear identification of the destructive drivers and institutional elements of
the growth-based system allows for resolving its expansionary and homoge-
nizing tendencies, and at the same time helps avoid throwing the baby out with
the bath water. Indeed, business, markets, and money are often given a bad
name in sustainability and post-growth literature. However, from a historical
perspective, these are social innovations that were developed over millennia
for a reason and so care must be taken in understanding the purpose they serve
(and can serve) going forward.

93
Leverage points for change
Donella Meadows’ (1999) leverage points framework provides a useful
heuristic for thinking about the degree to which a problem is systemic and,
thus, the degree to which solutions or interventions must be systemic.
Meadows outlines generic “leverage points” in a system that can be used to
identify different kinds of sources of problems, as well as corresponding
interventions that can resolve the problems. The idea is that different types of
solutions have different amounts of leverage to change the system. If there is
a small problem in an otherwise functional system, then changing the amount
of a flow variable in the system might resolve the problem. For instance, if a
class has a capable teacher who uses appropriate teaching methods and the
students are keen to learn, but the failure rate is high, this problem might be
resolved by reducing the amount of material the students are required to learn.
However, very systemic problems might require a change to the structure,
rules, and goals of the system itself – a transformation of the system (Abson
et al. 2017). To continue with the education example, a growing number of
students in the field of economics feel that the material and methods they are
learning are not useful for the challenges of the real world (Proctor et al. 2018).
This kind of problem requires deeper structural changes to the field of eco-
nomics itself. The leverage points framework implies that the most effective
solutions are those that address the roots of the problem.
This of course relates to how the problem is defined. If the sustainability
problem is defined narrowly, then the solutions will be correspondingly nar-
row. For instance, if greenhouse gas emissions are identified as the driver of
climate change, then the corresponding leverage point for intervention would
be to stop or slow down the amount of greenhouse gas emissions. Currently,
most sustainability literature aims at low, non-systemic leverage points (Dorn-
inger et al. 2020). These kinds of solutions imply that the drivers of sustaina-
bility problems are somehow exogenous to our social systems, so the best we
can do is to try to slow down the flow of water from a tap we have little control
over. However, post-growth analyses define the sustainability problem in
much more systemic, endogenous terms: the global crises of climate change,
biodiversity loss, and inequality all have the same roots in the economic
system that drives and requires constant expansion of production and
consumption (Spash 2017b). This is a systemic problem because it comes
from the way in which the economy is organized and the goals towards which
the economy is geared – namely the growth of GDP, profit, and income. This
problem definition corresponds to the highest leverage points; those that have
to do with the mindset out of which the system arises, the goals, power
structure, rules, and culture of the growth-based economy (Meadows 1999).
This perspective clarifies that so many of the sustainability efforts of the last
few decades have not been more effective, because they do not take aim at the
deeper structures and dynamics driving the crisis.

94
 The identification of dominant feedback loops in the FP and NFP types of
economies in Paper 3, highlights opportunities for systemic transformation.
Resources can increasingly be directed away from structures and strategies
aimed at generating private gain, and towards stuctures and strategies aimed
at generating social and ecological benefit. This kind of shift would change
the goal of the system; weaken the reinforcing feedback dynamics of the for-
profit economy; and strengthen the balancing feedback dynamics of the not-
for-profit economy.
There is evidence that in many parts of the world, social norms and narra-
tives are shifting in response to the sustainability crises in a way that supports
post-growth organizing (Hinton and Maclurcan 2016, 127–45). If norms,
logics, and beliefs continue to shift away from framing the profit motive as
natural and necessary, and towards the framing of wellbeing in social-ecolog-
ical terms, it opens up the space for corresponding shifts in the structures and
strategies of the economy (as shown in Figure 7). In some cases, seemingly
small changes, such as a shift in business structure, might result in large
changes to the system’s dynamics. Futhermore, because these are the social
systems within which we live and that we shape everyday (as members of
society), we can work together to change the goals, structures, rules, and cul-
ture of the economy (Göpel 2016).

Directions for future research

Some interesting and important directions for future research that build on
relationship-to-profit theory are outlined below.

How sustainable are existing not-for-profit businesses?

This theory makes the case and offers a basis for the collection of data about
NFP businesses. In particular, it is important to gather information about
whether they are already behaving in a more sustainable way than their FP
counterparts and if not, what the main challenges they face are. The RtP theory
offers the hypothesis that the main challenges NFP businesses face in behav-
ing more sustainably likely come from the FP market and the FP dynamics
discussed in Paper 1 and Paper 3. The five dimensions framework can guide
data collection in comparative case studies of FP and NFP businesses. Some
questions to guide such research would be:

• Why have sustainability-oriented entrepreneurs chosen to start their

businesses as an NFP or FP? What are the factors that go into that deci-
sion?
• How do NFP businesses measure up in terms of social and ecological
sustainability? How do they compare to FP peers? What do they do
with their profit?

95
 • What are their biggest opportunities and challenges to acting sustaina-
bly? How can the challenges be alleviated or removed?
• Do NFPs perform differently in different cultural and/or policy con-
texts? Do they perform better in less FP contexts (e.g., France compared
to the US)?
• Do NFPs tend to cooperate to achieve social benefit more than FP
peers?
• Are NFP businesses more common in certain geographical areas due to
certain cultural or regulative contexts?
• What kinds of incorporation structures, governance, and strategies do
they use? What size and geographical scope are they? How do these
traits compare to FP peers?

How does relationship-to-profit interact with other post-growth proposals?

An important strand of research is to examine how shifting from FP forms
of business to NFP forms might fit (or not) with other ideas for post-growth
economic interventions outlined in the literature. It is arguable that a a transi-
tion away from FP business forms to NFP business forms is a prerequisite for
many other post-growth interventions, such as minimalist lifestyles and a
shorter work week (a point to which I allude at the end of the Fit for Purpose
paper). Furthermore, if such a transition were to take place, perhaps there
would be no need for other prominent post-growth policy proposals, such as
changing the fractional reserve banking system; redesigning money; or intro-
ducing a universal basic income, which are mostly aimed at balancing out the
destructive tendencies of the for-profit economy37. This is an important avenue
for future research.

What might transformation pathways from a for-profit to a not-for-profit

economy look like?
This is perhaps the most obvious follow-up question to this thesis. The ar-
gumentation and evidence I have presented in this thesis might have con-
vinced the reader that the FP economy is not very likely to become sustainable.
However, some readers may find it difficult to imagine a not-for-profit market
economy or to imagine how to get from here to there. Therefore, research
should address how transformation pathways might take shape, including
what the potential barriers and opportunities in different contexts might be.
One could use back-casting and participatory methods to generate target-
seeking scenarios for transformation. This could involve workshops with ini-
tiatives like the Wellbeing Economy Alliance, Schumacher Institute,
Degrowth activists, and a plethora of other organizations pushing to “build

37
In Hinton and Maclurcan (2016), we touched on some of these ideas and posits that
neither the Universal Basic Income (p. 234) nor full-reserve banking nor exclusively
public banking (p. 181- 185) would be necessary in an NFP economy. However, it is
a very brief and superficial treatment of these issues.

96
back better” and “bounce forward” from the social and economic shocks of
the Covid-19 crisis.
Such efforts could start with the ideal types in Paper 3. In Hinton and
Maclurcan (2016), we also offer some starting points for further thinking
about such transformation possibilities, by describing a transformation sce-
nario in Chapter 6, and practical steps for starting a transformation process in
Chapter 7 of the book. Furthermore, much can be learned from historical ex-
amples of how major transformations have taken shape.

Modeling and Scenario Generation

There is also the potential for adapting an existing quantitative model (such
as Victor’s (2019) LowGrow system dynamics model) in order to explore:
different scenarios; desired futures; transformation pathways; potential barri-
ers; and possible unintended consequences. This could allow for an incorpo-
ration of different mixes of relationship-to-profit in the market, different
mixes of business strategies, as well as different starting conditions.38 Such a
model could also allow for a more in-depth exploration of questions like “Un-
der which conditions (if any) might a for-profit economy be sustainable?” and
“Under which conditions (if any) might a not-for-profit economy be sustaina-
ble?”. The CLDs in Paper 3 could be used as starting points for generating
scenarios around consumer debt, automation, secular stagnation, and many
other current trends in the economy. They could also be the basis of modeling
and comparing alternative economies - for instance, comparing a totally
worker cooperative economy to an NFP economy. Or such a model could be
used to test different interventions, like how public banking or a universal
basic income might decrease the drive for growth, or not, in different kinds of
economies.

38
Victor’s model is a system dynamics model, but agent-based models could also be very useful
for these purposes.

97
Conclusion: Implications for the world

Systemic problems call for systemic interventions. If this thesis is correct,

it means we have no choice but to radically transform the economy. We must
move away from for-profit business structures in order to protect people and
the planet. This implies a shift away from capitalism, but it does not neces-
sarily imply a shift away from business and markets. Changing businesses and
markets in a not-for-profit direction has the potential to transform the econ-
omy as a whole.
We must also do away with the outdated and destructive economic myths
that keep the for-profit system propped up. This includes the idea that capital-
ism is a meritocracy that rewards people who work hard; the “trickle-down
effect” that says that inequality naturally withers away with time; the idea that
GDP decouples itself from environmental impacts the more it grows; and the
myth that capitalist economies and democracy go hand-in-hand. These myths
are deeply ingrained and difficult to break through; and they may keep this
system going until it reaches a breaking point.
But there is hope. As things get worse and more people see the systemic
nature of the problem, the stronghold of these myths may be wearing down.
The younger generations have been born into a world in crisis. We have been
traumatized by economic recessions, skyrocketing inequality, declining public
health, and an unprecedented ecological crisis. Plus, we are more globally
connected than ever before and can see that these problems are ubiquitous –
and that the system is clearly not working. There is good reason to think that
younger generations are more open to economic alternatives than their prede-
cessors.
Indeed, change is in the air. Civil unrest around the world has more than
doubled in the last decade (Institute for Economics and Peace 2020). Also
during that time, we have seen a rise in globally-connected social movements;
from Extinction Rebellion, Fridays For Future and the the Yellow Vests (Gil-
lets Jaunes), to the Me Too movement, the Global Women’s Strike, Black
Lives Matter, and the Sunrise Movement, as well as numerous other strikes
for democracy around the world. These forms of social unrest and social
movements did not come from nowhere. They are responses to the structural
violence of the for-profit economic system.
We all know the proverb that you never change things by fighting the ex-
isting reality, but rather you must build a new model that makes the existing
model obsolete. There is a growing call for alternatives. Yet, the public debate

98
is stale, offering only two types of economies: capitalism or state-planned
communism. We can do better. What I have tried to show in this thesis is that
looking at relationship-to-profit can open up the range of possibilities, allow-
ing for an entire spectrum of alternative economies to choose from. What we
need today is not one alternative, but a plethora of them, which can be adapted
to the unique contexts and aspirations of communities around the world.
This is not the time for timidity. History teaches us that economies do not
change themselves, but are rather actively transformed by their participants.
We stand at the edge of a tipping point with the sustainability crisis; and social
contexts are shifting quickly. Rather than assuming that it is too difficult to
change the global economy in systemic ways (an argument I have often heard
from sustainability scientists), we should acknowledge how fast it is already
changing, and work together to help steer that change in a sustainable
direction.
To steer that change effectively, we need new theories. I have developed
the relationship-to-profit theory for exactly that purpose: to help steer the
change. First, by demystifying core aspects of business, markets, and profit;
and then by offering clear organizing principles to transform the economy in
the direction of social-ecological justice. This is only a start, but my hope is
that this focus on relationship-to-profit will advance several sustainability de-
bates which have so far failed to identify core causes of social-ecological deg-
radation. The discussion of how to transform the economy is one of the most
important discussions we can have. Now let us have it.

99
Acknowledgements

First, I would like to thank my supervisors, Sarah, Arnaud, Wijnand, and Eric,
for their support and guidance in navigating the intense experience of devel-
oping this doctoral dissertation. Thank you for giving me the space, time, and
encouragment to develop my ideas, as well as the constructive critique to
sharpen them.

I need to thank the person who has offered me unconditional love and support
throughout the last 12 years, while I have worked on new economy ideas and
initiatives (often unpaid, during the Greek economic crisis). While others
might have thought I was crazy, he has always encouraged me to follow my
heart and intuition, and to trust my intellectual journey. I couldn’t be more
grateful to have you in my life, Theo! Thank you so much for all you do!

I am also so appreciative of my family for their moral support, especially: Dad,

Mom, Chuck, Mamakia, Lazaros, Alida, Heli, Cameron, Maddie, Addison,
Jamie, David, Christos, and Voula.

Although I have faced many challenges in undertaking this work, I have been
blessed to be surrounded by wonderful, caring, and intelligent people. For ac-
ademic support, moral support, insightful questions, and feedback on my
ideas, I would like to express deep gratitude to: Tim Parrique, David Collste,
Tess Bennich, Marie Schellens, Jenneth Parker, María Mancilla García, An-
selm Schneider, Michele-Lee Moore, Somya Joshi, Ami Golland, Ed Lang-
ham, Ola Persson, Aaron Tuckey, Nick Fitzpatrick, Lakin Anderson, Isak
Stoddard, Ingrid Rieser, Alexis Engström, all the CEMUS coordinators and
students that hosted me at Uppsala University, the Schumacher Institute, the
AdaptEcon family (especially Nathalie Spittler, Ganna Gladkykh, Maartje
Oostdijk, Johanna Gisladottir, Ed Nedelciu, Julian Torres, Florian Dierickx,
Vala Ragnarsdottir, and Manuel Morales), Ian Roderick, Cardiff Business
School, the Organisations Research Forum at Uppsala University’s Business
Studies Department, the Swedish Transition Network, Daniel Pargman, Pella
Thiel, Maxim Vlasov, Eléonore Fauré, Pernilla Hagbert, Theoharis Tziovaris,
the Planetary Boundaries group (especially Tiina Häyhä, Avit Bhowmik, An-
drea Downing, Peter Sogaard Jorgensen, Dave Armstrong, Ingo Fetzer, and

100
Patty Villarubia), the PhD group at the Stockholm Resilience Centre (espe-
cially Liz Drury O’Neill, Katja Malmborg, Celinda Palm, Luigi Piemontese,
My Sellberg, Jessica Spijkers, Niak Koh, Emmy Wassénius, Alice Dauriach,
Vanessa Masterson, Simon West, Jamila Haider, Laura Elsler, David
Fagerlind, Daniel Ospina Medina, Johanna Hedlund, Yosr Ammar, Megan
Meacham, Sofia Käll, Blanca Gonzalez García-Mon, Matilda Petersson, Vic-
toria Voss-Bignet, Chandrakant Singh, and Kruger Nyasulu), Kristin Svärd,
Erik Anderson, Sabine Pappas, Dorothy Filiotis, Elena Markeze, Shannalia
Reyes, Everardo Reyes, Ashley Pearl, Tim Dubois, Nanda Wijermans, Frith-
jof Stoppler, Drew Ringsmuth, Romina Martin, Sonja Radosavljevic, Ana
Paula Aguiar, Thomas Hahn, Vivi Mellegård, Katherine Trebeck, David
Enarsson, Chris Vrettos, the Post-Growth Students Association (especially
Pieter Vullers, Naomi Terry, Robin Lindström, Natalie Pustilnik, Hannes Eg-
gert, Sasha Quahe, and Hanna Wernerson), all of the Stockholm Resilience
Centre MSc students during my stay, Toya Westberg and Researchers Desk,
Chiara Aliotta, Spiros Baras, and LUMES Batch 10 (especially Maryam Nas-
tar, Torsten Krause, Camille Delepierre, Arj Thiru, Andrea Cinquina, Nacho
Velasco, and Reshmi Vasudevan).

I would also like to thank colleagues at the Post Growth Institute who started
this journey with me, especially Donnie Maclurcan, Sharon Ede, Amelia
Bryne, Sarah Reibstein, Ollie Lovell, Tegan Tallulah, Brian Kelly, and Simon
Spire.

101
References

Abson, David J., Joern Fischer, Julia Leventon, Jens Newig, Thomas
Schomerus, Ulli Vilsmaier, Henrik von Wehrden, et al. 2017. “Lev-
erage Points for Sustainability Transformation.” Ambio 46 (1): 30–39.
https://doi.org/10.1007/s13280-016-0800-y.
Alchian, Armen A., and Harold Demsetz. 1972. “Production, Information
Costs, and Economic Organization.” The American Economic Review
62 (5): 777–95.
Alejo Vázquez Pimental, D., I. Macías Aymar, and M. Lawson. 2018. “Re-
ward Work, Not Wealth: To End the Inequality Crisis, We Must Build
an Economy for Ordinary Working People, Not the Rich and Power-
ful.” Oxford, United Kingdom: Oxfam GB.
Alexander, Samuel. 2015. Sufficiency Economy: Enough for Everyone, For-
ever. Melbourne, Australia: Simplicity Institute.
Alston, Philip. 2020. Philip Alston condemns failed global poverty eradication
effortsCenter for Human Rights and Global Justice, NYU.
https://chrgj.org/wp-content/uploads/2020/07/Alston-Poverty-State-
ment_FINAL.pdf.
Alves, Igor M. 2009. “Green Spin Everywhere: How Greenwashing Reveals
the Limits of the Csr Paradigm.” Journal of Global Change and Gov-
ernance 2 (1): 26.
Andreucci, Diego, and Terrence McDonough. 2015. “Capitalism.” In
Degrowth: A Vocabulary for a New Era, edited by Giacomo D’Alisa,
Federico Demaria, and Giorgos Kallis, 59–62. New York and Lon-
don: Routledge : Taylor & Francis.
Asara, Viviana, Iago Otero, Federico Demaria, and Esteve Corbera. 2015.
“Socially Sustainable Degrowth as a Social–Ecological Transfor-
mation: Repoliticizing Sustainability.” Sustainability Science 10 (3):
375–84. https://doi.org/10.1007/s11625-015-0321-9.
ASU Law group. 2020. “Homepage.” ASU Law Group. 2020.
https://asulawgroup.org.
Ayres, Robert U., and Jeroen C.J.M. van den Bergh. 2005. “A Theory of Eco-
nomic Growth with Material/Energy Resources and Dematerializa-
tion: Interaction of Three Growth Mechanisms.” Ecological Econom-
ics 55 (1): 96–118. https://doi.org/10.1016/j.ecolecon.2004.07.023.
Baker, Carl. 2019. “Obesity Statistics.” Briefing Paper 3336. London, Eng-
land: House of Commons Library.

102
Bapuji, Hari, Bryan W. Husted, Jane Lu, and Raza Mir. 2018. “Value Crea-
tion, Appropriation, and Distribution: How Firms Contribute to Soci-
etal Economic Inequality.” Business & Society 57 (6): 983–1009.
https://doi.org/10.1177/0007650318758390.
Bartolini, Stefano, and Francesco Sarracino. 2015. “The Dark Side of Chinese
Growth: Declining Social Capital and Well-Being in Times of Eco-
nomic Boom.” World Development 74 (October): 333–51.
https://doi.org/10.1016/j.worlddev.2015.05.010.
Berger, Michele. 2015. “California Social Purpose Corporation: An Over-
view.” Nonprofit Law Blog by NEO Law Group (blog). November 10,
2015. http://www.nonprofitlawblog.com/california-social-purpose-
corporation-an-overview/.
Berkes, Fikret, and Carl Folke, eds. 2002. Linking Social and Ecological Sys-
tems: Management Practices and Social Mechanisms for Building
Resilience. Transferred to digital printing. Cambridge: Cambridge
Univ. Press.
Berle, Adolf, and Gardiner Means. 1932. The Modern Corporation and Pri-
vate Property. New Brunswick: Transaction Publishers.
Biermans, Maarten. 2012. Decency and the Market: The ILO’s Decent Work
Agenda as a Moral Market Boundary. S.l]; Amsterdam: s.n.] ; Uni-
versiteit van Amsterdam [Host.
Bocken, N.M.P., and S.W. Short. 2016. “Towards a Sufficiency-Driven Busi-
ness Model: Experiences and Opportunities.” Environmental Innova-
tion and Societal Transitions 18 (March): 41–61.
https://doi.org/10.1016/j.eist.2015.07.010.
Bocken, N.M.P., S.W. Short, P. Rana, and S. Evans. 2014. “A Literature and
Practice Review to Develop Sustainable Business Model Arche-
types.” Journal of Cleaner Production 65 (February): 42–56.
https://doi.org/10.1016/j.jclepro.2013.11.039.
Borzaga, Carlo, Simone Poledrini, and Giulia Galera. 2017. “Social Enterprise
in Italy: Typology, Diffusion and Characteristics.” Euricse Working
Papers, 96 |17. https://papers.ssrn.com/sol3/papers.cfm?ab-
stract_id=3036384.
Borzaga, Carlo, and Ermanno Tortia. 2007. “Social Economy Organisations
in the Theory of the Firm.” In The Social Economy: Building Inclusive
Economies, by OECD, edited by Antonella Noya and Emma Clar-
ence, 23–60. Local Economic and Employment Development
(LEED). OECD. https://doi.org/10.1787/9789264039889-3-en.
Boyd, B., N. Henning, E. Reyna, D.E. Wang, and M.D. Welch. 2017. Hybrid
Organizations: New Business Models for Environmental Leadership.
Oxon, England: Greenleaf Publishing, Ltd.
Bracken, Seth. n.d. “Is Big Pharma Advancing or Stalling Medical Innova-
tion? Former NEJM Editor Marcia Angell, M.D. Weighs In.” Univer-
sity of Utah Health (blog). n.d. https://uofuhealth.utah.edu/innova-
tion/blog/2014/05/marciaangell.php.

103
Chaddad, Fabio R., and Michael L. Cook. 2004. “Understanding New Coop-
erative Models: An Ownership-Control Rights Typology.” Review of
Agricultural Economics 26 (3): 348–60.
https://doi.org/10.1111/j.1467-9353.2004.00184.x.
Checkland, Peter. 2000. “Soft Systems Methodology: A Thirty Year Retro-
spective.” Systems Res., 48.
Coase, R. H. 1937. “The Nature of the Firm.” Economica 4 (16): 386–405.
https://doi.org/10.1111/j.1468-0335.1937.tb00002.x.
D’Alisa, Giacomo, Federico Demaria, and Giorgos Kallis, eds. 2015.
Degrowth: A Vocabulary for a New Era. New York ; London:
Routledge, Taylor & Francis Group.
Daly, Herman E. 1977. Steady-State Economics: The Economics of Biophysi-
cal Equilibrium and Moral Growth. San Francision, CA: W.H. Free-
man.
———. 1996. Beyond Growth: The Economics of Sustainable Development.
Boston, Mass: Beacon Press.
Danermark, Berth, Mats Ekström, Liselotte Jakobsen, and Jan Ch. Karlsson.
2002. Explaining Society: Critical Realism in the Social Sciences.
Critical Realism--Interventions. London ; New York: Routledge.
Dean, Erik Nelson. 2013. “Toward a Heterodox Theory of the Business En-
terprise: The Going Concern Model and the U.S. Computer Industry.”
Doctoral dissertation, Kansas City, Missouri: University of Missouri-
Kansas City. http://hdl.handle.net/10355/40278.
Dees, J Gregory. 1998. “Enterprising Nonprofits.” Harvard Business Review,
1998.
Demsetz, Harold. 2002. “Toward a Theory of Property Rights Ii: The Compe-
tition Between Private and Collective Ownership.” The Journal of Le-
gal Studies 31: 21.
Dietz, Rob, and Dan O’Neill. 2013. Enough Is Enough: Building a Sustaina-
ble Economy in a World of Finite Resources. London and New York:
Routledge : Taylor & Francis.
Dimmelmeier, Andreas, and Frederik Heussner. 2018. “Institutionalist Eco-
nomics.” Exploring Economics. 2018. https://www.exploring-eco-
nomics.org/en/orientation/institutionalist-economics/.
Dittmar, Helga, Rod Bond, Megan Hurst, and Tim Kasser. 2014a. “The Rela-
tionship between Materialism and Personal Well-Being: A Meta-
Analysis.” Journal of Personality and Social Psychology 107 (5):
879–924. https://doi.org/10.1037/a0037409.
———. 2014b. “The Relationship between Materialism and Personal Well-
Being: A Meta-Analysis.” Journal of Personality and Social Psychol-
ogy 107 (5): 879–924. https://doi.org/10.1037/a0037409.
Dorninger, Christian, David J. Abson, Cristina I. Apetrei, Pim Derwort, Chris-
topher D. Ives, Kathleen Klaniecki, David P.M. Lam, et al. 2020.

104
 “Leverage Points for Sustainability Transformation: A Review on In-
terventions in Food and Energy Systems.” Ecological Economics 171
(May): 106570. https://doi.org/10.1016/j.ecolecon.2019.106570.
Dubin, Robert. 1969. Theory Building. New York, NY: The Free Press.
Dugger, William M. 1979. “Methodological Differences Between Institu-
tional and Neoclassical Economics.” Journal of Economic Issues 13
(4): 899–909.
Dyllick, Thomas, and Katrin Muff. 2016. “Clarifying the Meaning of Sustain-
able Business: Introducing a Typology From Business-as-Usual to
True Business Sustainability.” Organization & Environment 29 (2):
156–74. https://doi.org/10.1177/1086026615575176.
Earl, Peter E. 2017. “Theory of the Firm.” In Routledge Handbook of Ecolog-
ical Economics: Nature and Society, edited by Clive L. Spash. Abing-
don-on-Thames: Routledge : Taylor & Francis.
https://doi.org/10.4324/9781315679747.ch19.
Easterlin, R. A., L. A. McVey, M. Switek, O. Sawangfa, and J. S. Zweig. 2010.
“The Happiness-Income Paradox Revisited.” Proceedings of the Na-
tional Academy of Sciences 107 (52): 22463–68.
https://doi.org/10.1073/pnas.1015962107.
Elkington, John. 1994. “Towards the Sustainable Corporation: Win-Win-Win
Business Strategies for Sustainable Development.” California Man-
agement Review 36 (2): 90–100. https://doi.org/10.2307/41165746.
EU website. 2020. “The EU in Brief: Goals and Values of the EU.” European
Union. November 24, 2020. https://europa.eu/european-union/about-
eu/eu-in-brief_en.
Farley, Joshua. 2016. “Capitalism and the Steady State: Uneasy Bedfellows.”
In A Future Beyond Growth: Towards a Steady State Economy, edited
by Washington, Haydn and Paul Twomey, 176–92. London and New
York: Routledge : Taylor & Francis.
Farley, Joshua, Matthew Burke, Gary Flomenhoft, Brian Kelly, D. Forrest
Murray, Stephen Posner, Matthew Putnam, Adam Scanlan, and Aaron
Witham. 2013. “Monetary and Fiscal Policies for a Finite Planet.”
Sustainability 5 (6): 2802–26. https://doi.org/10.3390/su5062802.
Ferguson, Peter. 2018. Post-Growth Politics: A Critical Theoretical and Pol-
icy Framework for Decarbonisation. 1st ed. 2018. Cham: Springer
International Publishing : Imprint: Springer.
https://doi.org/10.1007/978-3-319-78799-2.
Folksam. 2020. “Om Oss (About Us).” Folksam. 2020. https://www.folk-
sam.se/om-oss/om-folksam.
Foss, Nicolai J, and Peter G Klein. 2012. Organizing Entrepreneurial Judg-
ment a New Approach to the Firm. Cambridge: Cambridge University
Press.
Foster, John Bellamy. 2014. The Theory of Monopoly Capitalism: An Elabo-
ration of Marxian Political Economy. New Edition. New York, New
York: Monthly Review Press.

105
Fox, Anthony W. 2017. “The Pharmaceutical Year That Was, 2017.” Phar-
maceutical Medicine 31 (6): 379–82. https://doi.org/10.1007/s40290-
017-0214-6.
Freeman, R. Edward. 1984. Strategic Management: A Stakeholder Approach.
Cambridge, UK: Cambridge University Press.
Fuentes-Nieva, Ricardo, and Nick Galasso. 2014. “Working for the Few: Po-
litical Capture and Economic Inequality.” Oxford, United Kingdom:
Oxfam GB.
Gall, Roslynne G., and Bill Schroder. 2006. “Agricultural Producer Coopera-
tives as Strategic Alliances.” International Food and Agribusiness
Management Review 9 (4): 26–44.
Gebauer, Jana. 2018. “Towards Growth-Independent and Post-Growth-Ori-
ented Entrepreneurship in the SME Sector.” Management Revue 29
(3): 230–56.
Gibson-Graham, J.K., Jenny Cameron, and Stephen Healy. 2013. Take Back
the Economy: An Ethical Guide for Transforming Our Communities.
Minneapolis, US: University of Minnesota Press.
Gómez-Baggethun, Erik. 2015. “Commodification.” In Degrowth: A Vocab-
ulary for a New Era, edited by Giacomo D’Alisa, Federico Demaria,
and Giorgos Kallis, 67–70. New York and London: Routledge : Tay-
lor & Francis.
Göpel, Maja. 2016. The Great Mindshift. Vol. 2. The Anthropocene: Politik—
Economics—Society—Science. Cham: Springer International Pub-
lishing. https://doi.org/10.1007/978-3-319-43766-8.
Graeber, David. 2014. Debt: The First 5,000 Years. Updated and Expanded
edition. Brooklyn: Melville House.
Grossman, Sanford J., and Oliver D. Hart. 1986. “The Costs and Benefits of
Ownership: A Theory of Vertical and Lateral Integration.” Journal of
Political Economy 94 (4): 691–719.
Gustafsson, Lovisa, Shanoor Seervai, and David Blumenthal. 2019. “The Role
of Private Equity in Driving Up Health Care Prices.” Harvard Busi-
ness Review, October 29, 2019. https://hbr.org/2019/10/the-role-of-
private-equity-in-driving-up-health-care-prices.
Haberl, Helmut, Dominik Wiedenhofer, Doris Virág, Gerald Kalt, Barbara
Plank, Paul Brockway, Tomer Fishman, et al. 2020. “A Systematic
Review of the Evidence on Decoupling of GDP, Resource Use and
GHG Emissions, Part II: Synthesizing the Insights.” Environmental
Research Letters 15 (6): 065003. https://doi.org/10.1088/1748-
9326/ab842a.
Hahn, Tobias, Frank Figge, Jonatan Pinkse, and Lutz Preuss. 2010. “Trade-
Offs in Corporate Sustainability: You Can’t Have Your Cake and Eat
It: Trade-Offs in Corporate Sustainability: You Can’t Have Your
Cake and Eat It.” Business Strategy and the Environment 19 (4): 217–
29. https://doi.org/10.1002/bse.674.

106
Hansmann, Henry B. 1980. “The Role of Nonprofit Enterprise.” The Yale Law
Journal 89 (5): 835. https://doi.org/10.2307/796089.
Hardoon, Deborah, Sophia Ayele, and Ricardo Fuentes-Nieva. 2016. “An
Economy for the 1%: How Privilege and Power in the Economy Drive
Extreme Inequality and How This Can Be Stopped.” Oxford, United
Kingdom: Oxfam GB.
Hardt, Lukas, and Daniel W. O’Neill. 2017. “Ecological Macroeconomic
Models: Assessing Current Developments.” Ecological Economics
134 (April): 198–211.
https://doi.org/10.1016/j.ecolecon.2016.12.027.
Harvey, David. 2015. Seventeen Contradictions and the End of Capitalism.
Paperback ed. London: Profile Books.
Heilbroner, Robert L. 1999. The Worldly Philosophers: The Lives, Times, and
Ideas of the Great Economic Thinkers. Rev. 7th ed. New York: Simon
& Schuster.
Hickel, Jason. 2017a. The Divide: Global Inequality from Conquest to Free
Markets. London, UK: Windmill Books.
———. 2017b. “Is Global Inequality Getting Better or Worse? A Critique of
the World Bank’s Convergence Narrative.” Third World Quarterly 38
(10): 2208–22. https://doi.org/10.1080/01436597.2017.1333414.
———. 2019. “Degrowth: A Theory of Radical Abundance.” Real-World
Economics Review, no. 87: 54–68.
Hickel, Jason, and Giorgos Kallis. 2020. “Is Green Growth Possible?” New
Political Economy 25 (4): 469–86.
https://doi.org/10.1080/13563467.2019.1598964.
Hillman, Joanne, Stephen Axon, and John Morrissey. 2018. “Social Enterprise
as a Potential Niche Innovation Breakout for Low Carbon Transition.”
Energy Policy 117 (June): 445–56. https://doi.org/10.1016/j.en-
pol.2018.03.038.
Hinton, Jennifer, and Donnie Maclurcan. 2016. How on Earth: Flourishing in
a Not-for-Profit World by 2050 (Working Draft). Ashland, OR: Post
Growth Publishing. http://arxiv.org/abs/1902.01398.
———. 2017. “A Not-for-Profit World beyond Capitalism and Economic
Growth?” Ephemera Journal 17 (1): 147–66.
Hodgson, Geoffrey M. 2015. “Much of the ‘Economics of Property Rights’
Devalues Property and Legal Rights.” Journal of Institutional Eco-
nomics 11 (4): 683–709.
https://doi.org/10.1017/S1744137414000630.
———. 2018. “Institutional Economics.” In Rethinking Economics: An Intro-
duction to Pluralist Economics, edited by J. Christopher Proctor,
Liliann Fischer, Joe Hasell, David Uwakwe, Zach Ward-Perkins, and
Catriona Watson, 45–59. Oxon, UK: Routledge.

107
Holland, Nina, and Benjamin Sourice. 2016. “Monsanto Lobbying: An Attack
on Us, Our Planet, and Democracy.” In . The Hague: Corporate Eu-
rope Observatory. https://corporateeurope.org/sites/default/files/at-
tachments/monsanto_v09_web.pdf.
HomeGround Real Estate. 2020. “Homepage.” HomeGround Real Estate.
2020. https://www.homegroundrealestate.com.au.
Hornborg, Alf. 2017. “How to Turn an Ocean Liner: A Proposal for Voluntary
Degrowth by Redesigning Money for Sustainability, Justice, and Re-
silience.” Journal of Political Ecology 24 (1): 623–32.
Houtbeckers, Eeva. 2018. “Framing Social Enterprise as Post-Growth Organ-
ising in the Diverse Economy.” Management Revue 29 (3): 257–80.
https://doi.org/10.5771/0935-9915-2018-3-257.
ICNL. 2013. “Frequently Asked Questions.” International Center for Not-for-
Profit Law. 2013. http://www.icnl.org/contact/faq/index.html.
ILO. 2014. Profits and Poverty: The Economics of Forced Labour. Special
Action Programme to Combat Forced Labour. Geneva, Switzerland:
International Labour Office.
Institute for Economics and Peace. 2020. “Global Peace Index 2020: Measur-
ing Peace in a Complex World.” Sydney, Australia: Institute for Eco-
nomics and Peace. https://www.economicsandpeace.org/wp-con-
tent/uploads/2020/08/GPI_2020_web-1.pdf.
Isil, Ozgur, and Michael T. Hernke. 2017. “The Triple Bottom Line: A Critical
Review from a Transdisciplinary Perspective: TBL: A Critical Re-
view from a Transdisciplinary Perspective.” Business Strategy and
the Environment 26 (8): 1235–51. https://doi.org/10.1002/bse.1982.
Jackson, Tim. 2017. Prosperity without Growth: Foundations for the Econ-
omy of Tomorrow. Second Edition. London ; New York: Routledge,
Taylor & Francis Group.
James, Estelle, and Susan Rose-Ackerman. 1986. The Nonprofit Enterprise in
Market Economics. New York: Harwood Academic Publishers.
Johanisova, Nadia, Tim Crabtree, and Eva Fraňková. 2013. “Social Enter-
prises and Non-Market Capitals: A Path to Degrowth?” Journal of
Cleaner Production 38 (January): 7–16.
https://doi.org/10.1016/j.jclepro.2012.01.004.
Johanisova, Nadia, and Eva Fraňková. 2017. “Eco-Social Enterprises.” In
Routledge Handbook of Ecological Economics: Nature and Society,
edited by Clive L. Spash. Abingdon-on-Thames: Routledge : Taylor
& Francis. https://doi.org/10.4324/9781315679747.ch49.
Jones, Charles I. 2018. Macroeconomics. Fourth Edition, International Stu-
dent Edition. New York London: W.W. Norton & Company.
Kallis, Giorgos. 2018. Degrowth. The Economy Key Ideas. Newcastle upon
Tyne: Agenda Publishing.
Kallis, Giorgos, Vasilis Kostakis, Steffen Lange, Barbara Muraca, Susan
Paulson, and Matthias Schmelzer. 2018. “Research On Degrowth.”

108
 Annual Review of Environment and Resources 43 (1): 291–316.
https://doi.org/10.1146/annurev-environ-102017-025941.
Kasser, Tim, and Allen D. Kanner, eds. 2004. Psychology and Consumer Cul-
ture: The Struggle for a Good Life in a Materialistic World. 1st ed.
Washington, D.C: American Psychological Association.
Kelly, Marjorie. 2012. Owning Our Future: The Emerging Ownership Revo-
lution. 1st ed. San Francisco, CA: Berrett-Koehler Publishers.
Khmara, Yaryna, and Jakub Kronenberg. 2018. “Degrowth in Business: An
Oxymoron or a Viable Business Model for Sustainability?” Journal
of Cleaner Production 177 (March): 721–31.
https://doi.org/10.1016/j.jclepro.2017.12.182.
Klein, Philip A. 1993. “The Institutionalist Challenge: Beyond Dissent.” In
Institutional Economics: Theory, Method, Policy, edited by Marc R.
Tool, 13–47. Boston, MA: Kluwer Academic Publishers.
Knight, Frank H. 1921. Risk, Uncertainty, and Profit. New York: Houghton
Mifflin Company.
Koch, Max, and Hubert Buch-Hansen. 2020. “In Search of a Political Econ-
omy of the Postgrowth Era.” Globalizations, August, 1–11.
https://doi.org/10.1080/14747731.2020.1807837.
Koestler, Arthur. 1964. The Act of Creation. New York: Macmillan.
Kopnina, Helen. 2016. “Sustainable Business: What Should It Be? Circular
Economy and the ‘Business of Subversion.’” In A Future Beyond
Growth: Towards a Steady State Economy, edited by Haydn Wash-
ington and Paul Twomey, 70–82. New York: Routledge : Taylor &
Francis.
Krugman, Paul R., and Robin Wells. 2018. Microeconomics. Fifth edition.
New York: Worth Publishers, Macmillan Learning.
Lange, Steffen. 2018. Macroeconomics without Growth: Sustainable Econo-
mies in Neoclassical, Keynesian and Marxian Theories.
Wirtschaftswissenschaftliche Nachhaltigkeitsforschung, Band 19.
Marburg: Metropolis-Verlag.
Langlois, Richard N., and Metin M. Cosgel. 1993. “FRANK KNIGHT ON
RISK, UNCERTAINTY, AND THE FIRM: A NEW INTERPRETA-
TION.” Economic Inquiry 31 (3): 456–65.
https://doi.org/10.1111/j.1465-7295.1993.tb01305.x.
Libecap, Gary D. 1986. “Property Rights in Economic History: Implications
for Research.” Explorations in Economic History 23 (3): 227–52.
https://doi.org/10.1016/0014-4983(86)90004-5.
Lodsgård, Lise, and Annabeth Aagaard. 2017. “Creating Value through CSR
across Company Functions and NGO Collaborations.” Scandinavian
Journal of Management 33 (3): 162–74. https://doi.org/10.1016/j.sca-
man.2017.05.002.

109
Lozano, Rodrigo, Angela Carpenter, and Donald Huisingh. 2015. “A Review
of ‘Theories of the Firm’ and Their Contributions to Corporate Sus-
tainability.” Journal of Cleaner Production 106 (November): 430–42.
https://doi.org/10.1016/j.jclepro.2014.05.007.
Lüdeke‐Freund, Florian. 2020. “Sustainable Entrepreneurship, Innovation,
and Business Models: Integrative Framework and Propositions for
Future Research.” Business Strategy and the Environment 29 (2):
665–81. https://doi.org/10.1002/bse.2396.
Lux, Kenneth. 2003. “The Failure of the Profit Motive.” Ecological Econom-
ics 44 (1): 1–9. https://doi.org/10.1016/S0921-8009(02)00270-7.
Magdoff, Fred, and John Bellamy Foster. 2011. What Every Environmentalist
Needs to Know about Capitalism: A Citizen’s Guide to Capitalism
and the Environment. New York: Monthly Review Press.
Mair, Johanna, Jeffrey Robinson, and Kai Hockerts, eds. 2006. Social Entre-
preneurship. London: Palgrave Macmillan UK.
https://doi.org/10.1057/9780230625655.
Málovics, György, Noémi Nagypál Csigéné, and Sascha Kraus. 2008. “The
Role of Corporate Social Responsibility in Strong Sustainability.” The
Journal of Socio-Economics 37 (3): 907–18.
https://doi.org/10.1016/j.socec.2006.12.061.
Marshall, R. Scott, Jude Lieberman, and Michelle Pagès. 2015. “The Interna-
tional Social Entrepreneur.” In The Routledge Companion to Interna-
tional Entrepreneurship, edited by Stephanie A. Fernhaber and
Shameen Prashantham, chapter 5. Routledge Companions in Busi-
ness, Management and Accounting. New York: Routledge.
Max-Neef, Manfred, A. Elizalde, and M. Hopenhayn. 1991. Human Scale De-
velopment: Conception, Application and Further Reflections. Upp-
sala, Sweden: Dag Hammarskjöld Foundation, Apex Press.
Meadows, Donella H. 1999. “Leverage Points: Places to Intervene in a Sys-
tem.” Hartland,VT: The Sustainability Institute.
———. 2008. Thinking in Systems: A Primer. Edited by Diana Wright. White
River Junction: Chelsea Green Publishing.
Meadows, Donella H., Dennis L. Meadows, Jorgen Randers, and William W.
Behrens III. 1972. The Limits to Growth. New York, NY: Universe
Books.
Meredith, Jack. 1993. “Theory Building Through Conceptual Methods.” In-
ternational Journal of Operations and Production Management 13
(5): 3–11.
Micklethwait, John, and Adrian Wooldridge. 2003. The Company: A Short
History of a Revolutionary Idea. New York, NY: Modern Library.
Midgley, Gerald. 2000. Systemic Intervention. Contemporary Systems Think-
ing. Boston, MA: Springer US. https://doi.org/10.1007/978-1-4615-
4201-8.

110
Moore, Jason W. 2014. “The End of Cheap Nature. Or How I Learned to Stop
Worrying about ‘the’ Environment and Love the Crisis of Capital-
ism.” In Structures of the World Political Economy and the Future of
Global Conflict and Cooperation, edited by Christian Suter and
Christopher Chase-Dunn, 285–314. Münster, Germany: LIT Verlag.
Mozilla. 2020. “About.” Mozilla. 2020. https://foundat-
ion.mozilla.org/en/about/.
Murphy, Sherry L., Jiaquan Xu, Kenneth D. Kochanek, and Elizabeth Arias.
2018. “Mortality in the United States, 2017.” Brief No. 328. Hyatts-
ville, Maryland, USA: National Center for Health Statistics.
Nasioulas, Ioannis. 2012. “Social Cooperatives in Greece Introducing New
Forms of Social Economy and Entrepreneurship.” International Re-
view of Social Research 2 (2): 151–71.
Nesterova, Iana. 2020. “Degrowth Business Framework: Implications for Sus-
tainable Development.” Journal of Cleaner Production 262: 121382.
https://doi.org/10.1016/j.jclepro.2020.121382.
NI Business Info. n.d. “Choose the Right Structure for Your Social Enter-
prise.” Invest Northern Ireland (blog). n.d. https://www.nibusiness-
info.co.uk/content/limited-companies-social-purpose.
North, Douglas. 1990. Institutions, Institutional Change, and Economic Per-
formance. Cambridge, UK: Cambridge University Press.
OECD. 2011. “Towards Green Growth: A Summary for Policy Makers.”
Paris, France: OECD Publishing.
O’Neill, Daniel W., André Reichel, and Claire Bastin. 2010. “Enough Excess
Profits: Rethinking Business and Production.” In Enough Is Enough:
Ideas for a Sustainable Economy in a World of Finite Resources, ed-
ited by Dan O’Neill, Rob Dietz, and Nigel Jones, 87–94. The Report
of the Steady State Economy Conference. Leeds, UK: Center for the
Advancement of the Steady State Ecoomy and Economic Justice for
All.
O’Neill, Daniel W. 2012. “Measuring Progress in the Degrowth Transition to
a Steady State Economy.” Ecological Economics 84 (December):
221–31. https://doi.org/10.1016/j.ecolecon.2011.05.020.
Orts, Eric W. 2013. Business Persons: A Legal Theory of the Firm. First edi-
tion. Oxford, United Kingdom: Oxford University Press.
Oswald, Yannick, Anne Owen, and Julia K. Steinberger. 2020. “Large Ine-
quality in International and Intranational Energy Footprints between
Income Groups and across Consumption Categories.” Nature Energy
5 (3): 231–39. https://doi.org/10.1038/s41560-020-0579-8.
Oxford Dictionary. 2020a. “‘Business.’” In Oxford Dictionary. Oxford,
United Kingdom: Oxford University Press.
———. 2020b. “‘Capitalism.’” In Oxford Dictionary. Oxford, United King-
dom: Oxford University Press. https://www.lexico.com/defini-
tion/capitalism.

111
Paech, Niko, and Benjamin Liebelt. 2012. Liberation from Excess: The Road
to a Post-Growth Economy. München: Oekom-Verl.
Parrique, Timothée. 2019. “The Political Economy of Degrowth.” Clermont-
Ferrand, France: Université Clermont Auvergne.
Parrique, Timothée, J. Barth, F. Briens, C. Kerschner, A. Kraus-Polk, A.
Kuokkanen, and Joachim H. Spangenberg. 2019. “Decoupling De-
bunked: Evidence and Arguments against Green Growth as a Sole
Strategy for Sustainability.” Brussels, Belgium: European Environ-
mental Bureau.
Patten, Cyrus O. 2017. “Nonprofit Social Enterprise: Social Change in a New
Economic Paradigm.” Doctoral dissertation, Burlington, Vermont:
University of Vermont.
Paulson, Susan. 2017. “Degrowth: Culture, Power and Change.” Journal of
Political Ecology 24 (1): 425–48.
https://doi.org/10.2458/v24i1.20882.
Pearce, David. 2002. “An Intellectual History of Environmental Economics.”
Annual Review of Energy and the Environment 27 (1): 57–81.
https://doi.org/10.1146/annurev.energy.27.122001.083429.
Pearl, Judea. 2009. Causality: Models, Reasoning and Inference. Cambridge,
UK: Cambridge University Press.
Pencavel, John, and Ben Craig. 1994. “The Empirical Performance of Ortho-
dox Models of the Firm: Conventional Firms and Worker Coopera-
tives.” Journal of Political Economy 102 (4): 718–44.
Penrose, Edith Tilton. 2009. The Theory of the Growth of the Firm. 4th ed.,
Rev. ed. Oxford ; New York: Oxford University Press.
Piemontese, Luigi. 2020. “Sustainable Land and Water Management for a
Greener Future: Large-Scale Insights in Support of Agroecological
Intensification.” Doctoral dissertation, Stockholm, Sweden: Stock-
holm University.
Pirgmaier, Elke. 2018. “Value, Capital and Nature: Rethinking the Founda-
tions of Ecological Economics.” Doctoral dissertation, Leeds, UK:
University of Leeds. https://etheses.whit-
erose.ac.uk/22895/1/0_Phd_final.pdf.
———. 2021. “The Value of Value Theory for Ecological Economics.” Eco-
logical Economics 179 (January): 106790.
https://doi.org/10.1016/j.ecolecon.2020.106790.
Pirgmaier, Elke, and Julia Steinberger. 2019. “Roots, Riots, and Radical
Change—A Road Less Travelled for Ecological Economics.” Sus-
tainability 11 (7): 2001. https://doi.org/10.3390/su11072001.
Proctor, J. Christopher, Liliann Fischer, Joe Hasell, David Uwakwe, Zach
Ward-Perkins, and Catriona Watson, eds. 2018. Rethinking Econom-
ics: An Introduction to Pluralist Economics. London ; New York:
Routledge, Taylor & Francis Group.

112
Raworth, Kate. 2017. Doughnut Economics: Seven Ways to Think like a 21st
Century Economist. White River Junction, Vermont: Chelsea Green
Publishing.
Reichel, André. 2017. “Shape of Things to Come: From the ‘Laws of Form’
to Management in the Post-Growth Economy.” Ephemera Journal 17
(1): 89–118.
Reichel, André, and Barbara Seeberg. 2011. “The Ecological Allowance of
Enterprise: An Absolute Measure of Corporate Environmental Perfor-
mance, Its Implications for Strategy, and a Small Case.” Journal of
Environmental Sustainability 1: 15.
Reiser, Dana Brakman, and Steven A. Dean. 2017. The Social Enterprise
Trust Deficit. Vol. 1. Oxford University Press.
https://doi.org/10.1093/oso/9780190249786.003.0002.
Richardson, George P. 2011. “Reflections on the Foundations of System Dy-
namics: Foundations of System Dynamics.” System Dynamics Review
27 (3): 219–43. https://doi.org/10.1002/sdr.462.
Richters, Oliver, and Andreas Siemoneit. 2017a. “Fear of Stagnation? A Re-
view on Growth Imperatives.” In VÖÖ Discussion Paper No. 6/2017,
15. Heidelberg, Germany: Vereinigung für Ökologische Ökonomie
(VÖÖ).
———. 2017b. “Consistency and Stability Analysis of Models of a Monetary
Growth Imperative.” Ecological Economics 136 (June): 114–25.
https://doi.org/10.1016/j.ecolecon.2017.01.017.
Rigney, Daniel. 2010. The Matthew Effect: How Advantage Begets Further
Advantage. New York: Columbia University Press.
Rockström, Johan, Will Steffen, Kevin Noone, Åsa Persson, F. Stuart III Cha-
pin, Eric Lambin, Timothy M. Lenton, et al. 2009. “Planetary Bound-
aries: Exploring the Safe Operating Space for Humanity.” Ecology
and Society 14 (2): art32. https://doi.org/10.5751/ES-03180-140232.
Roeger, K., A. Blackwood, and S. Pettijohn. 2012. “Nonprofit Almanac
2012.” Washington, D.C.: Urban Institute Press.
Ruiz-Mier, F., and M. van Ginneken. 2006. “Consumer Cooperatives: An Al-
ternative Institutional Model for Delivery of Urban Water Supply and
Sanitation Services.” Water Supply&Sanitation Working Note No. 5.
Washington, D.C.: World Bank.
Salamon, Lester M., and H.K. Anheier. 1997. Defining the Nonprofit Sector:
A Cross-National Analysis. Manchester, England: Manchester Uni-
versity Press.
Salamon, Lester M., S. Wojciech Sokolowski, Megan A. Haddock, and Helen
S. Tice. 2013. “The State of Global Civil Society and Volunteering:
Latest Findings from the Implementation of the UN Nonprofit Hand-
book.” Working Paper 49. Comparative Nonprofit Sector Working
Paper. Baltimore, M: Johns Hopkins Center for Civil Society Studies.

113
Satz, Debra. 2010. Why Some Things Should Not Be for Sale: The Moral Lim-
its of Markets. Oxford Political Philosophy. New York: Oxford Uni-
versity Press.
Schaefer, Katrin, Patricia Doyle Corner, and Kate Kearins. 2015. “Social En-
vironmental and Sustainable Entrepreneurship- Schaeffer.Pdf.” Or-
ganization & Environment 28 (4): 394–413.
https://doi.org/10.1177/1086026615621111.
Schaltegger, Stefan, Florian Lüdeke-Freund, and Erik G. Hansen. 2016.
“Business Models for Sustainability A Co-Evolutionary Analysis of
Sustainable Entrepreneurship, Innovation and Transformation.” Or-
ganization & Environment 29 (3): 264–89.
Schellens, Marie. 2020. “Violent Natural Resource Conflicts: From Defini-
tions to Prevention.” Doctoral dissertation, Stockholm, Sweden:
Stockholm University.
Schmid, Benedikt. 2018. “Structured Diversity: A Practice Theory Approach
to Post-Growth Organisations.” Management Revue 29 (3): 281–310.
https://doi.org/10.5771/0935-9915-2018-3-281.
Schnaiberg, Allan, David N. Pellow, and Adam Weinberg. 2002. “The Tread-
mill of Production and the Environmental State.” In The Environmen-
tal State under Pressure, edited by Arthur Mol and Frederick H. But-
tel, 15–32. Research in Social Problems and Public Policy 10. Am-
sterdam: Elsevier Publishing, Ltd.
Schneider, Anselm. 2020. “Bound to Fail? Exploring the Systemic Patholo-
gies of CSR and Their Implications for CSR Research.” Business &
Society 59 (7): 1303–38. https://doi.org/10.1177/0007650319856616.
Schor, Juliet. 2004. Born to Buy: The Commercialized Child and the New
Consumer Culture. New York: Scribner.
———. 2010. Plenitude: The New Economics of True Wealth. New York,
N.Y: Penguin Press.
Scott, W. Richard. 2014. Institutions and Organizations: Ideas, Interests, and
Identities. 4th ed. Thousand Oaks, CA: Sage Publications.
Smith, Adam. 2009. The Wealth of Nations. Blacksburg, VA: Thrifty Books.
Smith, Ken G., and Michael A. Hitt. 2007. “Epilogue: Learning to Develop
Theory from the Masters.” In Great Minds in Management: The Pro-
cess of Theory Development, edited by Ken G. Smith and Michael A.
Hitt, 572–88. Oxford, United Kingdom: Oxford University Press.
Solidarity Economy Map and Directory. 2020. “Definition of the Solidarity
Economy.” SolidarityEconomy.Us. 2020. https://solidarityecon-
omy.us/definition/.
Sorvino, Chloe. 2018. “Silent Giant: America’s Biggest Private Company Re-
veals Its Plan To Get Even Bigger.” Forbes, October 22, 2018.
https://www.forbes.com/sites/chloesorvino/2018/10/22/silent-giant-
americas-biggest-private-company-reveals-its-plan-to-get-even-big-
ger-1/#6766022bc7b6.

114
Spash, Clive L., ed. 2017a. Routledge Handbook of Ecological Economics:
Nature and Society. Routledge International Handbooks. London
New York: Routledge.
———. 2017b. “Social Ecological Economics.” In Routledge Handbook of
Ecological Economics: Nature and Society, edited by Clive L. Spash.
Abingdon-on-Thames: Routledge : Taylor & Francis.
https://doi.org/10.4324/9781315679747.ch1.
———. 2020a. “‘The Economy’ as If People Mattered: Revisiting Critiques
of Economic Growth in a Time of Crisis.” Globalizations, May, 1–
18. https://doi.org/10.1080/14747731.2020.1761612.
———. 2020b. “Apologists for Growth: Passive Revolutionaries in a Passive
Revolution.” Globalizations, October, 1–26.
https://doi.org/10.1080/14747731.2020.1824864.
Steffen, Will, Åsa Persson, Lisa Deutsch, Jan Zalasiewicz, Mark Williams,
Katherine Richardson, Carole Crumley, et al. 2011. “The Anthropo-
cene: From Global Change to Planetary Stewardship.” AMBIO 40 (7):
739–61. https://doi.org/10.1007/s13280-011-0185-x.
Stephan, Ute, Lorraine M Uhlaner, and Christopher Stride. 2015. “Institutions
and Social Entrepreneurship: The Role of Institutional Voids, Institu-
tional Support, and Institutional Configurations.” Journal of Interna-
tional Business Studies 46 (3): 308–31.
https://doi.org/10.1057/jibs.2014.38.
Sterman, John D. 2009. Business Dynamics: Systems Thinking and Modeling
for a Complex World. Nachdr. Boston: Irwin/McGraw-Hill.
———. 2012. “Sustaining Sustainability: Creating a Systems Science in a
Fragmented Academy and Polarized World.” In Sustainability Sci-
ence, edited by Michael P. Weinstein and R. Eugene Turner, 21–58.
New York, NY: Springer New York. https://doi.org/10.1007/978-1-
4614-3188-6_2.
Stubbs, Wendy, and Chris Cocklin. 2008. “Conceptualizing a ‘Sustainability
Business Model.’” Organization & Environment 21 (2): 103–27.
https://doi.org/10.1177/1086026608318042.
Suša, Oleg. 2019. “Global Dynamics of Socio-Environmental Crisis: Dangers
on the Way to a Sustainable Future.” Civitas - Revista de Ciências
Sociais 19 (2): 315. https://doi.org/10.15448/1984-
7289.2019.2.31969.
Swedberg, Richard. 2014. The Art of Social Theory. Princeton: Princeton Uni-
versity Press.
Therborn, Göran. 2020. “Sweden’s Turn to Economic Inequality, 1982–
2019.” Structural Change and Economic Dynamics 52 (March): 159–
66. https://doi.org/10.1016/j.strueco.2019.10.005.
Thompson, Neil, Kip Kiefer, and Jeffrey G. York. 2011. “Distinctions Not
Dichotomies: Exploring Social, Sustainable, and Environmental En-
trepreneurship.” In Advances in Entrepreneurship, Firm Emergence
and Growth, edited by G.T. Lumpkin and Jerome A. Katz, 13:201–

115
 29. Emerald Group Publishing Limited.
https://doi.org/10.1108/S1074-7540(2011)0000013012.
Thompson, Spencer, and Vladislav Valentinov. 2017. “The Neglect of Society
in the Theory of the Firm: A Systems-Theory Perspective.” Cam-
bridge Journal of Economics 41 (4): 1061–85.
https://doi.org/10.1093/cje/bew072.
Tittle, Chris. 2015. “Workplace Democracy in Nonprofit Organizations.” Sus-
tainable Economies Law Center. 2015.
https://www.theselc.org/workplace_democracy_in_nonprofit_organ-
izations.
Trainer, Ted, and Samuel Alexander. 2019. “The Simpler Way: Envisioning
a Sustainable Society in an Age of Limits.” Real World Economics
Review 87: 247–60.
Twomey, Paul, and Haydn Washington. 2016. “Relating the Steady State
Economy to the Green, Circular, and Blue Economies.” In A Future
Beyond Growth: Towards a Steady State Economy, edited by Haydn
Washington and Paul Twomey, 129–45. London and New York:
Routledge : Taylor & Francis.
UN. 2015. “Transforming Our World: The 2030 Agenda for Sustainable De-
velopment.” A/RES/70/1. New York, USA: United Nations.
Unilever. 2020. “Ben and Jerry’s.” Unilever USA. 2020. https://www.unile-
verusa.com/brands/food-and-drink/ben-and-jerrys.html.
Upward, Antony, and Peter Jones. 2016. “An Ontology for Strongly Sustain-
able Business Models: Defining an Enterprise Framework Compati-
ble With Natural and Social Science.” Organization & Environment
29 (1): 97–123. https://doi.org/10.1177/1086026615592933.
Vatn, Arild. 2009. “Cooperative Behavior and Institutions.” The Journal of
Socio-Economics 38 (1): 188–96.
https://doi.org/10.1016/j.socec.2008.07.011.
———. 2017. “Critical Institutional Economics.” In Routledge Handbook of
Ecological Economics: Nature and Society, edited by Clive L. Spash.
Abingdon-on-Thames: Routledge : Taylor & Francis.
https://doi.org/10.4324/9781315679747.ch3.
Verma, Ritu. 2017. “Gross National Happiness: Meaning, Measure and
Degrowth in a Living Development Alternative.” Journal of Political
Ecology 24 (1): 476. https://doi.org/10.2458/v24i1.20885.
Victor, Peter A. 2015. “Growth.” In Degrowth: A Vocabulary for a New Era,
edited by Giacomo D’Alisa, Federico Demaria, and Giorgos Kallis,
109–12. New York and London: Routledge : Taylor & Francis.
———. 2019. Managing without Growth: Slower by Design, Not Disaster.
Second edition. Cheltenham, UK: Edward Elgar Publishing.
Wackernagel, M., N. B. Schulz, D. Deumling, A. C. Linares, M. Jenkins, V.
Kapos, C. Monfreda, et al. 2002. “Tracking the Ecological Overshoot
of the Human Economy.” Proceedings of the National Academy of
Sciences 99 (14): 9266–71. https://doi.org/10.1073/pnas.142033699.

116
Walker, Paul. 2017. The Theory of the Firm: An Overview of the Economic
Mainstream. Abingdon-on-Thames: Routledge : Taylor & Francis.
Washington, Haydn, and Paul Twomey, eds. 2016. A Future beyond Growth:
Towards a Steady State Economy. London ; New York, NY:
Routledge Earth scan from.
Wells, Peter. 2016. “Economies of Scale Versus Small Is Beautiful: A Busi-
ness Model Approach Based on Architecture, Principles and Compo-
nents in the Beer Industry.” Organization and Environment 29 (1):
36–52.
Wier, Ludvig. 2020. “Tax Havens Cost Governments $200 Billion a Year: It’s
Time to Change the Way Global Tax Works.” World Economic Fo-
rum. February 27, 2020. https://www.wefo-
rum.org/agenda/2020/02/how-do-corporate-tax-havens-work/.
Wilkinson, Richard G., and Kate Pickett. 2010. The Spirit Level: Why Greater
Equality Makes Societies Stronger. 1. American ed., rev.Updated.
New York, NY: Bloomsbury Press.
Williamson, Oliver E. 1991. “Comparative Economic Organization: The
Analysis of Discrete Structural Alternatives.” Administrative Science
Quarterly 36 (2): 269. https://doi.org/10.2307/2393356.
World Bank. 2020. “Global Economic Prospects, June 2020.” Flagship Re-
port. Washington, D.C.: World Bank.
World Commission on Environment and Development. 1987. Our Common
Future. United Nations General Assembly document A/42/427. Ox-
ford ; New York: Oxford University Press.
YHA. 2020. “Homepage.” YHA. 2020. https://www.yha.org.uk.

117
Paper 1: Sources and Limits
 Limits to Profit?
A conceptual framework for understanding profit and sustainability*

Jennifer B. Hinton1,2

1
Stockholm Resilience Centre, Stockholm University, Stockholm, Sweden
2
Centre for Studies and Research in International Development, Université Clermont
Auvergne, Clermont-Ferrand, France
Email: jen@postgrowth.org
*
Manuscript in preparation for submission to Ecological Economics
Funding is acknowledged from the Marie Sklodowska Curie Fellowship Action in Excellent
Research (grant agreement no. 675153).

Abstract

This article seeks to unpack how the generation of profit impacts social and ecological
sustainability. It begins by framing profit as not necessarily sustainable or exploitative. Social
and ecological inputs and impacts are necessary for economic processes and when social and
ecological stakeholders are not compensated for their contributions to the process, they can be
considered unpaid inputs and, thus, sources of profit. This often overlaps with exploitation of
stakeholders, which occurs when one party financially benefits at the expense of another party.
The paper examines how profit is generated by several common types of profit-seeking
strategies. In doing so, a conceptual framework is developed that clarifies how profit-seeking
strategies generate profit from four basic sources: efficiency gains; willing and informed
contributions from social stakeholders; exploitation of social stakeholders; and exploitation of
nature. The fact that there are a bounded number of sources of benign profit (and that there are
limits to those sources) indicates that there are limits to profit. It also indicates that much of the
profit generated today comes from exploitation, which helps explain the global sustainability
crisis. This implies that profit should not be pursued as an end by businesses and reveals some
inherent perils of a profit-driven economy. Thus, the paper adds clarity to the social and
ecological sources and limits of profit, and gives guidance for how profit should be treated in
a sustainable economy.

Keywords: Profit, Sustainable economy, Sustainable business, Tradeoffs, Exploitation,

Value creation

1
1. Introduction
To what extent are there tradeoffs between profit and social-ecological sustainability?
Both neoclassical and ecological economics fail to adequately explain the generation of profit,
even though it is a dominant driving force in capitalist economies (Pirgmaier, 2018, pp. 109–
117). Conventional approaches to business often take for granted that profit is necessary and
desirable because it rewards owners for taking the risk of investment and so it keeps investment
flowing, which creates jobs and innovation and generally leads to higher levels of welfare
(Jones, 2018; e.g., Knight, 1921; Krugman & Wells, 2018; A. Smith, 2009). Likewise, it is
often claimed in sustainable business literature that the pursuit of profit can be balanced
alongside protecting people and the planet (the so-called ‘triple bottom line’ of people, planet,
and profit), with the assumption that tradeoffs between profit and sustainability are negligible
(Isil & Hernke, 2017). Yet there is little evidence that win-win-win situations are ubiquitous
(Lodsgård & Aagaard, 2017) and there is a plethora of evidence of businesses profiting from
harm to various stakeholders and ecosystems (Filgueiras Sauerbronn et al., 2018; Peet et al.,
2011; Satz, 2010; Trucost, 2013).
Yet, it is clear that not all financial surplus is exploitative. The case of a not-for-profit
charity shop is a good example of this. The charity shop might make a profit, but this comes
from the combination of their goods being donated and their customers’ willingness to pay a
premium because they know the profit will be used for the shop’s social benefit mission (e.g.,
to help people in need). Another example of non-exploitative profit is when better production
techniques increase the efficiency of production, generating some profit in the process.
Therefore, profit is not always exploitative, nor is it always sustainable, but the analytical tools
for understanding when and how profit is exploitative need to be sharpened. Eco-Marxian
approaches can shed some light on the potential tradeoffs between profit, on the one hand, and
social and ecological concerns, on the other hand. Eco-Marxian scholars posit that surplus
value comes from nature, workers’ labor, and the reproductive labor upon which workers
depend (e.g., Magdoff & Foster, 2011; Moore, 2014). These studies claim that if these forms
of labor and nature were fully paid for, then there would be no overall profit in the economy
(Pirgmaier, 2018, p. 115). The key for a better understanding of the tradeoffs between
sustainability and profit on the level of a business or a market, then, is to look for the sources
of profit.
This conceptual paper demystifies the links between profit and social-ecological
sustainability by examining the concrete processes through which profit is generated, with a
focus on how diverse types of business strategies derive profit from a finite number of sources.
I develop a conceptual framework of the technological, social, and ecological sources of profit
in three steps: 1) synthesizing insights from eco-Marxian value theory, life-cycle analysis
methods, and Satz’s theory of noxious markets to conceptualize how value, profit, and
exploitation relate to social-ecological sustainability; 2) examining widely used profit-seeking
strategies from this perspective; and 3) offering a conceptual framework for assessing whether
profit-seeking strategies are exploitative or not, according to the source of the profit they
generate.
This conceptualization of the social and ecological sources of profit exposes, clarifies,
and helps explain some of the root causes of global patterns exploitation and sustainability
crises. It also offers a clear and concrete way of identifying the sources of profit, by focusing
on widespread generic types of profit-seeking strategies. Lastly, it points towards the limits to
profit and how profit might be approached in a sustainable economy. As such, this paper
provides a better basis for more effective discussions, theorizing, analysis, and practice when
it comes to profit and social-ecological sustainability.

2
2. Conceptualizing Value, Profit, and Exploitation from Sustainability
Perspective
As a starting point, I define a state of social-ecological sustainability as one in which
every human’s needs are met within the limits of the planet’s biosphere, and without
compromising the ability of future generations to meet their needs (based on the Brundtland
Commission definition (World Commission on Environment and Development, 1987)). Thus,
social and ecological justice are central to sustainability. Before delving into the tensions
between sustainability and profit, it is important to clarify what profit is. Because profit is
surplus value, this requires an exploration of value.

2.1 What is value?

The notion of economic value is normative and, as such, represents a set of priorities,
social norms, beliefs, and an underlying logic (e.g., the logic of capitalism) (Pirgmaier, 2021).
Money is inherently a store of exchange-value, meaning that its value is derived from its ability
to be exchanged for something else (Magdoff & Foster, 2011, pp. 41–46). This is in contrast
to use-value, a type of value that is derived from the direct use of a good or service (Ibid) – for
instance food has high use-value because it provides the nutrition on which our bodies depend.
While use-value is transhistorical, the prioritization of money as an end (i.e., exchange-
value) is a historically-specific phenomenon (Pirgmaier, 2021, pp. 5–6). All societies
throughout time have derived value from using things, like eating food, but only some societies
have prioritized money as an end in their economies and are thus organized, at least in part,
according to an exchange-based notion of value. This means that different economic systems
can be organized according to different understandings of value and that economic institutions
will be organized in ways that prioritize use-value or exchange-value, or seek some sort of
balance of the two. This is important for the discussion of sustainability and profit, because
profit is a form of exchange-value.
Notions of value are very much connected to ideas about success – a successful person
or organization creates a lot of value. In a system in which money is used as a metric of success,
value is primarily viewed in terms of exchange-value and, as such, money is pursued as an end
(Magdoff & Foster, 2011). Capitalist economies define and measure value and success in
monetary terms; for example, a country with a high Gross Domestic Product is considered
‘developed’ and a ‘successful’ business is profitable (Ibid). Here, I define a capitalist economy
as a market economy in which businesses are operated for private profit (Oxford Dictionary,
2020a). When profit is a measure of success, as in capitalist economies, it tends to be pursued
as an end by businesses (Magdoff & Foster, 2011, pp. 41–46).

2.2 What is profit?

Money, exchange-value, and use-value are tightly woven together (Harvey, 2015). And
all three are tightly connected to labor and nature, through economic transactions (Magdoff &
Foster, 2011). As surplus money, this means that profit is also tightly connected to labor and
nature. At first, this seems like a complex and abstract issue, but it can be broken down into
more concrete pieces by thinking about how profit is generated.
There are several kinds of profit discussed in economics. For the purposes of this
exploration, I use accounting profit, which refers to the financial surplus that is the difference
between costs and revenue1. Therefore, the only ways to generate profit are to decrease costs

1
This can be further broken down into residual profit, which is the profit that remains after reinvestment, but such
a level of detail is not necessary for this analysis, as the reinvestment of profit also has social and ecological
impacts.

3
(while maintaining or increasing revenues) or to increase revenues (while maintaining or
decreasing expenses), or a combination of the two. Revenue comes from selling goods or
services on the market. The costs of production include business expenses such as wages,
machinery, retail or warehouse space, debt repayments, and taxes.
The equation of profit is simple. The profit a business makes from selling its goods and
services is the price of the item less the cost of producing that item2, multiplied by the total
number of items sold. Therefore, increasing the revenue per item will add to the profit, all other
things equal. The same goes for decreasing the cost of producing an item. If there is already a
profit per item sold, then the absolute amount of profit can also be increased by selling more
items.
This break-down of profit leads to a couple of key insights. First, there are three broad
categories of profit-seeking strategies: increasing revenue per item; decreasing cost per item;
and increasing the number of units sold. All profit-seeking strategies fit into at least one of
these categories. Second, there are specific opportunities for generating profit in the process of
making and selling products, which means this is where one should look when trying to
evaluate the social and ecological implications of profit-making.
When a business pays money (e.g., for wages, equipment, or taxes), it can be an
opportunity for that actor to generate profit by paying less and thus cutting costs (whether
through negotiation, deception, or coercion, as will be discussed in Section 2.3). When a
business receives a payment, it is generally an opportunity for them to generate profit by
increasing the price and/or increasing the number of items sold. There are also opportunities
for profit between the financial flows if prices are kept steady and the economic actors make
their processes more efficient, whether due to labor productivity (e.g., more efficient
techniques) or due to resource productivity (e.g., getting more use out of the same amount of
resources). This means that the sources of profit are limited to the factors and actors involved
in the production and exchange of items.
There are technological and ecological factors and a range of social actors involved in
the economic process. The social and ecological implications of economic activity can be
thought of in terms of both inputs and impacts. Inputs include materials, energy, and labor.
Impacts include the various consequences of the economic process on nature, workers,
consumers, specific local communities, society at large, and other actors in the value chain.
These stakeholder categories come from the Social Life Cycle Assessment methodology
(UNEP, 2020), which is used to identify the social impacts of a product throughout its life-
cycle, with my own addition of nature as a stakeholder. Here, it is important to note that
whenever the environment is harmed, it has negative impacts on local communities and society
(either in the short or long-term).
Most opportunities for profit are directly related to social and ecological inputs as well
as potentially harmful impacts on people and planet (Pirgmaier, 2018, p. 117). Certain tradeoffs
between profit and social and ecological concerns are clear– for instance, tradeoffs between
the income for employees and the income for owners. Companies only have a finite amount of
total revenue, so a decision must be made about how much of that revenue should go to paying
employees and how much profit remains to be reinvested or given to owners. The same sort of
decisions must be made about how much to invest in pollution prevention measures, such as
cleaner processing technology and disposal methods, and how much profit remains. Likewise,
community engagement, improving health and safety conditions for workers, and paying taxes
all involve costs for businesses. Higher costs mean less profit. These are the tradeoffs that are
not often taken into consideration in the sustainability or sustainable business literature,
perhaps because profit is often seen as necessary and desirable.

2
The terms ‘item’ and ’unit’ here are used to refer to both goods and services.

4
 When stakeholders are not compensated for their contributions to the economic process,
then they can be considered unpaid social and ecological inputs (Pirgmaier, 2018). As Moore
(2014, p. 300) points out, the more profit is composed of unpaid inputs versus paid inputs, the
higher the rate of profit. If the land-owner paid the local community for the negative impacts
of intensive logging, for instance, the profit would decrease and may even disappear, making
the logging unprofitable.

2.3 Exploitation
If there are often tradeoffs between profit, on the one hand, and social and ecological
concerns, on the other, exploitation is an important concept in understanding profit in relation
to sustainability. The Oxford dictionary defines exploitation as treating someone unfairly for
one’s own benefit (Oxford Dictionary, 2020b). For the purposes of this paper, exploitation
refers to a situation in which financial value for some specific stakeholders is produced at the
financial or non-financial expense of other stakeholders. In order for such exploitation to
happen, there is a power differential that favors the value-recipient. This parallels Satz’s (2010)
idea that noxious markets are characterized by producing harmful outcomes for individuals and
societies, and being based on asymmetries in knowledge, agency, and vulnerability. The harm,
benefits, and power asymmetries involved in exploitation relate to the standing of the relevant
parties before, during, and after an exchange, in terms of being better or worse off (Ibid).
Exploitation can happen via force, indoctrination, manipulation, or deception (Ibid). As
Parrique (2019, pp. 266–267) points out, social-ecological exploitation is structural and
institutionalized, meaning that actors in the supply-chain, from consumers to salespersons to
managers of factories, do not have to have the intention of being exploitative in order to
participate in exploitation.
If everyone in an economy is pursuing and competing for profit as an end and success
is defined in monetary terms, then everything (or everyone) that is not money or cannot
generate money is inherently less valuable. That is what allows for exploitation to happen in
the name of profit. From a capitalist economic lens, profit is more valuable than a social or
ecological stakeholder’s wellbeing, unless they can make more profit. Wild ecosystems and
people living subsistence lifestyles do not generate money, so they are not worth much,
according to a capitalist definition of value. Wild ecosystems can be put to better use by
monetizing and commoditizing them and subsistence lifestyles should be converted into
consumer lifestyles, in order to make money and ‘create value’. That is the logic of capitalism
and its prioritization of exchange-value.
In this way, profit-driven exploitation often generates exchange-value for relatively
powerful actors by negatively affecting the exploited stakeholder’s ability to meet their needs
via use-value. Think for instance of an underpaid employee who must sacrifice time with their
family in order to work overtime hours to earn a living wage. If the employee were making a
living wage, they would not have to work so much. It is because they are underpaid in order to
produce profit for the business owners, that they must sacrifice the use-value of family time for
the exchange-value of a wage for themselves and the exchange-value of profit for owners.
It is important to note that the type and amount of harm done by economic interactions
can vary widely, ranging from low to high levels of harm on a spectrum (Satz, 2010). Satz
(2010, pp. 94–96) defines harm as violating a person’s minimal levels of wellbeing and agency,
on the level of the individual, or undermining social frameworks that allow individuals to
interact as equals, on the level of society. A low level of harm can be thought of as a disturbance
that places social stakeholders in a slightly worse financial position than before the exchange,
or has minor impacts on the environment. In general, low levels of harm can be absorbed or
bounced back from without much effort – for instance, if I am overcharged for a piece of
furniture or if a few trees in a dense forest are cut down. A high level of harm involves

5
psychological or physical trauma done to consumers or workers; or permanent damage done to
value chain actors, local communities, society, or nature. Moderate levels of harm fall
somewhere in between.
The matter of distinguishing between necessary and unnecessary ecological
exploitation in order to support basic human wellbeing, is a bit more complex because fulfilling
human needs requires some level of ecological input and impact. However, making sure that
every human’s needs are met implies that we can draw the line of acceptable ecological
exploitation at the point where overproduction and overconsumption happen. The more
unnecessary an item is, the more ecologically exploitative it is. Furthermore, if the item has an
unnecessarily high environmental impact, it is more exploitative.

3. Common Profit-Seeking Strategies and Social and Ecological

Exploitation
When and how does profit come from social and ecological exploitation? In order to
answer this question, one must gain an understanding of the process of how profit is sought
and generated in different instances, in relation to social and ecological factors. This implies
following the money and the social and ecological inputs and impacts in economic transactions.
At first glance, it might seem that profit cannot be pinned down because the generation of profit
can be achieved by such a wide diversity and combination of strategies and is so context-
dependent. Yet, as noted above, there are only three basic ways of generating profit: increasing
revenue per item, increasing sales, and/or decreasing costs. The simplicity of the profit equation
offers a way to conceptually break profit down by looking at the kinds of strategies that
companies use to try to generate profit in those three ways. I use the term ‘profit-seeking
strategy’ to refer to businesses’ tactical use of methods and practices towards the goal of
generating profit.
An examination of common strategies can help us identify the sources of profit. Larger
patterns of social and ecological harm are driven by some typical and widespread profit-seeking
strategies that happen across industries, including advertising, planned obsolescence
(designing products to become obsolete), wage suppression, union busting, influencing policy,
and mergers and acquisitions (Hinton, 2020). Many of these same strategies are used across
industries throughout the global economy.
Below, I identify and examine types of business strategies that are commonly used to
generate profit, categorized by whether they derive surplus from increasing revenue per item,
cutting costs, or increasing total sales. I have focused on covering a broad range of common
types of profit-seeking strategies, regardless of whether they are legal, illegal, or in a legal grey
zone.
This exploration of business literature and practices is not comprehensive, but gives a
better understanding of the potential sustainability tradeoffs and limits to profit. I was looking
specifically for: strategies used across diverse sectors and geographies; strategies that might
derive profit in non-exploitative ways; and strategies that might derive profit in exploitative
ways. The brief description of each type of strategy highlights some of the most obvious social
and ecological impacts that have been associated with it, with a focus on whether the strategy
is likely to do direct harm to the stakeholders listed above. The purpose of the exploration is to
inform a way of thinking about the social and ecological implications of profit.
It is worth noting that companies do not use these types of strategies one at a time or in
isolation. A business will use several types of strategies simultaneously and so the profit of the
company cannot be said to come from any one strategy, but rather a dynamic combination of
strategies. In the case of a company that keeps wages low, marks up prices, and advertises to
sell more products, for instance, some portion of the profit comes from each of these strategies.

6
3.1 Increasing Revenue per Item
3.1.1 Marking up prices
As one study points out, pricing can be ‘one of the most powerful levers for driving
profitable growth’ (Deloitte, n.d.). Yet pricing is often a very complicated decision for business
managers to make (Indounas, 2006). There are many different pricing strategies, from at-cost
pricing to predatory pricing, from freemiums to pay-what-you-want. Many pricing strategies
involve marking up prices. The strategy of marking up prices adds a profit margin to the price
of an item, which generates surplus financial value by increasing the revenue per item.
Marking up prices to produce a profit comes at the expense of the consumer, but this is
not always exploitative. For instance, when there is price transparency (when the buyer knows
how much money it cost to make the item and how much the mark-up is and freely decides to
buy the item anyway), marking up prices does not exploit the consumer (as in the hypothetical
case of a charity shop). In such a situation, the consumer is willingly paying more to contribute
to the company’s profit (Jung et al., 2020). However, price mark-ups often come at the expense
of an uninformed consumer; as has been documented in fashion (Jung et al., 2020), taxi rides
(Balafoutas et al., 2017), health care (Brown, 2019), and a plethora of other products and
services3, precisely because it makes sense to keep information about costs and price mark-ups
from the consumer when seeking profit. In a context of high consumer uncertainty or ignorance
of costs and pricing, markups are exploitative to some extent because the company generates a
profit because uninformed (or underinformed) consumers unknowingly overpaid for the item
(i.e., Satz’s asymmetries of knowledge). This is often the case, but the level of exploitation is
relatively low as long as the product in question is not essential for basic wellbeing (e.g., food
or medicine), or all potential customers can at least afford the mark-up.
However, marking up prices might entail social harm by reducing the accessibility of
goods for low- and middle-income households, if it is a basic necessity and there is a high level
of inequality or average incomes are low (Satz, 2010). A well-documented case is medications
that have been priced artificially high in order to generate profits for pharmaceutical company
owners, reducing access to medicine for low-income households (Smith, 2016). Even if
customers in such a situation were to have full knowledge of the production costs (which is not
usually the case), they are not in a position to refrain from buying these products because they
are basic necessities. In such cases, there is an element of coercion of stakeholders (whether
the patients or the healthcare system) by a powerful business and the degree of exploitation is
high, which relates to Satz’s asymmetries of agency and vulnerability, as well as harm to
individuals’ wellbeing. There are also wider social impacts in terms of the risk of loss of trust
in basic social institutions, like businesses and markets. Figure 1 illustrates the potential
sources of profit for marking up prices. The dotted lines indicate that, depending on how the
strategy is implemented, the profit might be derived from the sources depicted in the ovals. As
will be shown, the links are clearer and more definite in some other types of profit-seeking
strategies.

3
This is more likely in credence goods – where customers have to believe what an expert tells the – as Balafoutas
et al. (2017) point out.

7
 Figure 1: Potential sources of profit generated by marking up prices

3.1.2 Price-fixing, collusion, and cartels

Marking up prices can generate higher profits, but there is a risk that market competition
might drive artificially high prices downwards. As such, profit-seeking firms also have an
incentive to collude if they can, because collusion is generally more profitable than competition
(Krugman & Wells, 2018, p. 420). In a market where a high percentage of market share is held
by a few large firms, there is the risk for an increased tendency to collude rather than compete
(Foster, 2014). This is because these few dominant players stand to generate more sales and
profit if they can fix the prices at an artificially high level (or limit the quantities to be produced)
and stay out of each other’s way (i.e., price-fixing cartels)4. One meta-analysis found over 800
documented observations of cartel overcharging (from 1770- 2004), which were overcharging
at a mean value of 29% more than the benchmark price, with international cartels overcharging
14% more than national cartels, harming buyers in both low- and high-income regions (Connor
& Bolotova, 2006).
Collusions and cartels are sometimes an illegal strategy, but this is often a legal grey
zone, as is market concentration (and monopolies), because it is difficult to define a cut-off
point and it is often informal (Krugman & Wells, 2018, p. 240). Price leadership can often be
a form of tacit collusion; a strategy in which supposed competitors go along with the profitable
prices defined by one firm rather than offering lower prices to compete in the market (Ibid).
As with mark ups, the use of patents to keep prices high can be especially destructive
in the pharmaceutical industry, in which patients, governments, and other value chain actors,
such as insurance companies, are forced to pay high prices for life-saving medicine (Fox, 2017;
Krugman & Wells, 2018). One of the ways branded pharmaceutical companies prevent
competition is through “pay for delay” agreements, in which a brand drug company pays a
generic company not to launch a version of their medicine (Federal Trade Commission, n.d.).
The Federal Trade Commission in the United States estimates that these agreements cost
American consumers and taxpayers $3.5 billion in higher medical expenses each year, resulting
in harm to consumers, communities, and society (Ibid). Like price-gouging, if high levels of
price-fixing via collusion, cartels, and patents are allowed, there is a risk of a widespread loss
of trust in social institutions like businesses, markets, and government. Figure 2 depicts the
sources of profit for this type of strategy, note that the lines from the strategy to the source are
solid rather than dotted lines, indicating more certainty about the source of profit.

4
This can be particularly insidious when it involves the use of state funds, as in the cases of bid-rigging (when
cartels fix prices for public tenders), which made up about 1/3 of the cartels studied in one meta-analysis (Connor
& Bolotova, 2006).

8
 Figure 2: Sources of profit for price-fixing, collusion, and cartels

3.2 Increasing Sales

There are a vast number of sales strategies, including increasing demand by advertising,
providing products that are designed to be frequently replaced or discarded after use (i.e.,
planned obsolescence), or that are short-lived because quality and durability are compromised
by cost-cutting.
Increasing sales can involve social harm when companies use manipulative or
misleading advertising5 or some form of planned obsolescence6. Research shows that people
around the world are increasingly subjected to advertising (Story, 2007) and that advertising
can be quite manipulative (Schor, 2004). There’s an entire field of study of consumer
psychology that focuses just on how to best tap into the consumer’s mind7. Some scholars argue
that the amount of advertising that the average person is exposed to everyday has changed
peoples’ primary identity from that of an active community member or citizen to that of a
passive consumer, which entails personal and societal harm (e.g., Dulsrud, 2017; Schuurman,
2007).
Planned obsolescence requires people to spend more of their money on products that
needlessly become outdated (Cooper, 2004, 2005). Both manipulative advertising and planned
obsolescence also put producing firms in a position of having much more direct power over
the consumers than vice versa and can break down trust in social institutions. The increases in
production, distribution, use, and disposal driven by advertising and planned obsolescence
entail environmental damage in the forms of extraction of natural resources and pollution.
Figure 3 depicts the sources of profit from planned obsolescence.

5
For the purposes of this paper, advertising refers to all paid-for publicity that makes people aware of a product
or service, with the intention of persuading them to do buy that product or service (based on a combination of new
and old definitions mentioned in ‘The Advertising Handbook’ (Brierley, 2005)). This type includes many specific
strategies such as re-branding, creating brand loyalty, and strategic product placement.
6
Planned obsolescence refers to consumer goods being designed to break down or seem outdated earlier than
necessary in order to persuade consumers to buy more products and services (Guiltinan, 2009).
7
See, for instance, the Journal of Consumer Psychology.

9
 Figure 3: Sources of profit for planned obsolescence

It should be noted that halting and reversing the current levels of social-ecological harm
requires an overall global decrease in the consumption of goods and services (Parrique et al.,
2019). Therefore, seeking to expand sales of products and services with all of their ecological
inputs and impacts does not align with sustainability, unless it is to expand access to deprived
communities – even in the case of extending access to such communities, it is only sustainable
if there is a decreased number of sales in overconsuming communities. Therefore, from a
sustainability perspective, the category of strategies aimed at increasing sales should always be
scrutinized critically.

3.3 Cutting Costs

3.3.1 Increasing productivity
Costs can be cut by increasing productivity of resources or different kinds of inputs,
often through more efficient technology. It can also be achieved by increasing labor
productivity, through more efficient techniques; for instance, changing the way that workers
pick strawberries in a field. Automation is increasingly used to perform tasks that employees
would otherwise perform, which increases both types of productivity. Labor productivity gains
from automation can result in fewer jobs and, thus, contribute to unemployment unless those
jobs are compensated for elsewhere in the economy (EOP, 2016). Likewise, more efficient
techniques may be harmful to employees, for instance if workers are required to perform quick,
repetitive motions for a whole work shift (Figure 4). However, in terms of direct inputs and
impacts, increasing productivity generally derives profit from efficiency gains (Figure 4).

Figure 4: Sources of profit derived by more efficient techniques

3.3.2 Decreasing material resource costs

Another strategy that firms employ to cut costs is to decrease material resource costs.
This includes using cheaper inputs, buying in bulk, and decreasing inventory. These strategies
are often socially and environmentally benign and the profit is derived from efficiency gains.
Buying in bulk can have environmental impacts, depending on the type of product
(Figure 5). If it is food, buying in bulk can sometimes lead to food waste, for instance in the

10
hospitality industries. But the direct risk for environmental harm from buying in bulk is
minimal.

Figure 5: Sources of profit from buying in bulk

Likewise, the strategy of using cheaper inputs can be benign or exploitative, depending
on why the inputs are cheaper. Profit from cheaper inputs might come at the expense of the
consumer receiving a dangerous product or a product that breaks more easily, because cheaper
inputs often mean lower-quality inputs. If products break more easily, this also has negative
environmental impacts due to the disposal of broken products. Cheap inputs can become a
problem for society at large when public works, bridges, roads, and buildings for example,
contain cheaper materials made of a poor quality (knowingly or unknowingly) (Midler, 2011).

3.3.3 Keeping labor costs low

A similar strategy for generating profit is to keep labor costs low (Magdoff & Foster,
2011). This includes lowering wages, outsourcing or offshoring jobs to geographies where
wages are lower, hiring disadvantaged people (e.g., undocumented immigrants) who are
willing to accept lower wages due to their vulnerable situation, and maintaining wages at a
steady rate despite a rise in the cost of living. The International Labor Organization has stated
the world economy is characterized by wage stagnation, which attests to how widespread this
type of cost-cutting strategy is (ILO, 2016, p. 85). Labor’s share of GDP has been decreasing
since 1990 (in terms of: high-income G20 countries, low- and middle- income G20 countries,
non-G20 countries, and the world at large) (Fuentes-Nieva & Galasso, 2014, p. 73). This kind
of strategy clearly derives profit at the expense of workers and their families8, but it also affects
local communities and society at large, due to a loss of jobs in domestic market and exploitation
of low wage labor and low working standards abroad.
Cutting labor costs can include hiring workers into zero-hour contracts or contracting
short-term workers in order to avoid paying for benefits that come with a long-term
employment contract, as is common in the so-called ‘gig economy’ (De Stefano, 2015;
Friedman, 2014). Staff of the transnational corporation, Google, staged a walk-out at the
London headquarters in 2019, in order to protest this practice and to stand in solidarity with
the exploited contract workers hired by Google (Wong, 2019).

Figure 6: Sources of profit from suppressing wages and benefits

8
It is important to note that any time workers are directly impacted, there are also indirect impacts on the people
in their families and communities who do the unpaid work that supports them and makes it possible for them to
engage in wage labor (i.e., so called ‘women’s work’) (Gibson-Graham et al., 2013).

11
 Even when workers are on long-term contracts with benefits, employers often have the
upper hand. Unions are typically seen as a way for workers to use collective bargaining to
balance the power dynamics between employers and employees. However, union-busting is
another effective profit-seeking strategy (Logan, 2004). Large companies, such as Amazon,
Walmart, and Verizon have all been documented in their use of union-busting to keep their
labor costs low and maintain (or increase) their profitability (Feingold, 2013; Menegus, 2018;
Sainato, 2019).
Of course, the most vulnerable workers are affected the worst. For instance, labor
contractors around the world are known to charge recruitment fees and then retain migrant
workers’ passports (LeBaron & Howard, 2015, p. 55), in effect indenturing them. In fact,
forced labor, human trafficking, and slavery have become a widespread, endemic feature of the
global economy, in everything from shrimp to cheese, clothing, care, domestic, and sex work
(Ibid). As mentioned earlier, this also harms the families and local communities from which
these migrant workers come. And the inequality caused by wage suppression and stagnation,
especially in a context in which profit is privately distributed to owners, is bad for society as a
whole. As Wilkinson & Pickett (2010) point out, inequality has wide-ranging and long-lasting
negative effects on society.

3.3.4 Influencing policy for profit

Another important and prominent way that businesses seek profit is by influencing
policy-making in ways that will directly cut their costs, give them additional income, or allow
them to use other profit-seeking strategies more easily (Chen et al., 2010). This includes
lobbying for business-friendly tax breaks, subsidies, and regulations; lobbying against costly
taxes and regulations; and revolving doors. Revolving doors refers to the situation in which
companies are able to get one of their associates into a policy-making position, and the door
revolves when that associate comes back to an employed position in the company after their
short political stint (Blanes i Vidal et al., 2012).
These strategies have many socially and ecologically damaging effects. For instance,
the political process is manipulated and public resources are sacrificed (forgone tax income
and public money that goes to private companies, further contributing to inequality) (Esteban
& Ray, 2006; Fuentes-Nieva & Galasso, 2014; Rowland, 2013). Companies can avoid illegal
behavior by changing policies to ensure that exploitative practices are legal or that fines for
exploitative behavior are small enough that they can be more than compensated for by profits
reaped from that behavior. This may result in exploitation of workers, especially in cases where
labor regulations are fought by lobbyists or workers’ rights to collective bargaining are
undermined or where lobbying is done to keep the minimum wage low. This overlaps with
collusion, as lobbying with a coalition of companies often reaps higher returns (Alexander et
al., 2009, p. 428).
Influencing policy for profit may also damage the biosphere, for instance, through
allowing more environmentally harmful economic activities (such as the de-regulation of
mining, fracking, and drilling for fossil fuels), or the relaxing of environmental protection laws.
More resources give a company more lobbying power, which can in turn yield more access to
resources (e.g., subsidies, tax cuts, lack of regulation) (Esteban & Ray, 2006; Fuentes-Nieva &
Galasso, 2014). This is a vicious cycle that affects society at large. This type of strategy has
global effects, because cities, states, and nations have become engaged in a ‘race to the bottom’,
competing to offer better tax holidays, tax exemptions, and special economic zones to attract

12
companies9. In this way, influencing policy for profit can lead to a state of political capture
(Fuentes-Nieva & Galasso, 2014) and over time it can decrease the level of trust citizens have
in their political institutions, leading to political unrest.
Although all actors should have a voice in a democratic political process, for the reasons
above, it is questionable whether profit-seeking businesses should be able to lobby for or
against policies that enable them to more easily generate profit at the expense of the
environment, workers, consumers, local communities, other value chain actors, or society at
large.

3.3.5 Disregarding taxes and policies

The last and most clearly harmful type of strategy in this brief overview is that of
engaging in illegal, illicit, or legally questionable behavior, by disregarding laws, regulations,
and taxes in order to generate profit. Breaking the law can be very profitable. In fact, in some
cases, companies prefer to break the law and pay fines, because they can make more profit in
that way than by obeying the laws (e.g., Dong, 2007). This points to a contradiction (and
tradeoffs) between profit-seeking and social and ecological sustainability, which will be
discussed in Section 5.3. The social and ecological harm done by this type of strategy can be
extreme.
The use of tax havens is a profit-seeking strategy that has gained much attention in
sustainability literature (e.g., Galaz et al., 2018). Corporate dividends as a percentage of
corporate profits have been on the rise in the last 4- 5 decades (around the world) - up to 50%
or more in many places (Bapuji et al., 2018, p. 992). The use of tax havens and the share of
profits reported through shell companies in tax havens has continued to rise since the 1980s;
an estimated amount equivalent to 10% of world GDP is held in global tax havens (Alstadsæter
et al., 2018). As a result, the loss of taxes to governments is estimated to be at least US$190
billion (Binder, 2016). As tax avoidance rises, inequality increases, which in turn makes tax
evasion acceptable and rampant (Christie & Holzner, 2006; Jong-sung & Khagram, 2005). In
other words, tax avoidance and inequality form a vicious cycle. This lack of tax revenue for
states then affects the amount of protection the government can provide to its people and nature.
If companies are able to disregard taxes and regulations without any major consequences, this
can have detrimental effects on social trust.

9
Fuentes-Nieva & Galasso (2014, p. 84) report: ‘In 1990, only a small minority of developing countries offered
tax incentives for foreign investment; by 2001 most of them did. The number of free trade zones offering
preferential tax arrangements to investors has soared in the world’s poorest countries. In 1980, only one out of 48
sub-Saharan African countries had a free trade zone; by 2005, this had grown to 17 countries; and the race
continues. In 2012, Sierra Leone’s tax incentives for just six firms were equivalent to 59 percent of the country’s
entire budget, and more than eight times its spending on health and seven times its spending on education. In
2008/09, the Rwandan government authorized tax exemptions that could have been used to double health and
education spending.’.

13
 Figure 7: Sources of profit from disregarding taxes and regulations

4. Framework for Understanding the Social and Ecological Sources of

Profit
The conceptual framework that emerges from this exploration can be used to guide the
collection of empirical data about businesses and markets, but it is also meant to ground the
discussion of how profit relates to social and ecological sustainability in everyday practice and
empirical evidence.
The generation of profit does not simply have social and ecological side effects, as the
matter is often framed. Rather, when it is not derived from efficiency, profit is derived from
nature, workers, consumers, other value chain actors, local communities, and society at large10.
This can happen in an exploitative or a non-exploitative way. For social stakeholders, this
depends on the extent to which they are aware that they are contributing to profit and are willing
to make that contribution without manipulation and coercion. For nature as a stakeholder, this
depends on the extent to which the impacts erode resilience and prevent ecological
regeneration.
For instance, a strategy does not harm consumers when they are willing and able to pay
extra, or workers when they are willing and able to work for less, and they are informed that
they are making this contribution to profit, as well as to what extent. ‘Willing and able’ is the
operative phrase here, which implies that these stakeholders have a choice (or agency as Satz
frames it). When stakeholders do not have a choice, it cannot be said that they are willing and
able.
The (intended) use of the profit also matters. Profit that is used for private financial gain
inherently has more exploitative potential than profit that is used for social benefit or ecological
conservation, but the latter can also be exploitative. These factors also overlap. For instance,
informed consumers or workers might be more willing to contribute to profit when they know
it will be used for social benefit rather than enriching business owners.

10
This includes the unpaid care work provides the underlying basis for all paid work, production, sales, and
accumulation of wealth.

14
 Figure 8: Potential sources of profit

Figure 8 illustrates how this way of thinking about profit-seeking strategies translates
into a conceptual framework that clarifies the potential sources of profit: efficiency gains;
willing and informed contributions from social stakeholders; exploitation of stakeholders; and
exploitation of nature. This framework is intended to provide the basis for deeper and more
concrete explorations of the relationship between profit and sustainability, by looking at how
different strategies derive profit from a finite set of different sources. As such, it can be used
to qualitatively assess the (un)sustainability of particular strategies, businesses, and markets.
There might be sources that I have not found in my study, which can be added in future
research.

5. Discussion
5.1 Strategies often derive profit from exploitation
Something that became immediately apparent in the process of developing this
framework is that there are only two benign sources of profit: efficiency and willing and
informed contributions. Most of the common strategies that I examined entail exploitation or a
risk thereof. Furthermore, the most clearly benign strategies, like buying in bulk or decreasing
inventory, are quite limited. If these were the only strategies used to generate profit, the
economy might be quite sustainable. However, it would also not be a very profitable economy
because here are clear limits to the gains that can be achieved by those strategies. A business
can only decrease its inventory, buy in bulk, or improve workers’ techniques so much. Whether
or not there are clear limits to resource productivity is a topic of a lively ongoing debate
between sustainability scholars, but the second law of thermodynamics (Georgescu-Roegen,
1971) and the lack of evidence of decoupling economic activity from environmental impact on
the aggregate scale (Parrique et al., 2019) imply limits to resource productivity, as well.
These strategies also have definite limits in terms of how much profit they can deliver
and for how long. In most cases, these strategies would only provide a temporary boost in
profits and/or cannot be done frequently (e.g., changing out old equipment for more energy-
efficient equipment, or decreasing the inventory to allow for a smaller warehouse). In the end,
companies seeking to sustain or grow profits will use other types of strategies11.
More questionable strategies, like lobbying for tax breaks and acquiring competitors,
can deliver great gains in profits for a long time if successful. In fact, one study found that

11
There is an important difference between a company decreasing the amount of resources per unit of production
and decreasing its total environmental impact. Addressing the global environmental crises requires a large
decrease in total environmental impact. So far there is no evidence that this can happen without an overall decrease
in production and consumption (Parrique et al., 2019).

15
investments in lobbying for a certain tax policy in the US reaped a 22,000% return on
investment, a return of 220USD for every 1USD invested (Alexander et al., 2009, p. 404).
This is not a coincidence. It is because profit is often derived from the exploitation. In
many cases, the higher the level of harm a strategy entails, the more profitable it is. For
instance, it can be much more profitable for a company to coerce slaves to peel shrimp than to
pay them a fair wage, ensure safe working conditions, and offer them employment benefits.
Free labor can be very profitable (ILO, 2014). Aside from just sub-standard wages, the
International Labour Organisation estimates that 150 billion dollars of profit are made from the
forced labor of 21 million men, women and children, each year (ILO, 2014). Likewise, it can
be more profitable to influence policy away from a regulation that requires major investments
in environmental and human safety equipment than to actually have to make those investments
and maintain that equipment. It is often more profitable to invest in lobbying to change tax
policies12 or to hide profit in complicated layers of shell companies than to pay the taxes.

5.2 Market dynamics increase the pressure for exploitative strategies

In seeking financial gain, highly profit-motivated actors tend to gravitate to exploitative
practices as a way of cutting costs and/or increasing revenue. In a market of actors competing
for financial gain, there is a race to the bottom, as those that use the most profitable (and most
exploitative) strategies become the largest, most powerful actors (Foster, 2014). This puts
pressure on other actors to also use dubious strategies, in order to stay in the market. LeBaron
& Howard (2015, p. 37) give an overview of how this race to the bottom plays out:
‘In order to meet their obligations, stay afloat financially, and weather the efforts of retailers
and processors to lower costs, producers and suppliers often subcontract labour and other low
value-adding business activities… (f)or example, farmers, who rarely have the labour capacity
to harvest time-sensitive crops, may hire large numbers of workers through agencies for short
periods of time.’
The companies that can cut costs the most (albeit through exploitation) can also offer
their products at the lowest price. This is exacerbated by the inequality inherent in a profit-
driven economy, as a growing number of consumers cannot afford to buy the more expensive,
less exploitative products, even if they want to, due to the stagnation of wages and the
increasing cost of living. Therefore, in an economy driven by cutting costs and maximizing
income (for both producers and consumers), companies that can offer the cheapest products
and services by cutting costs (albeit in exploitative ways) are able to gain a larger share of the
market, as consumers favor low prices13. This then feeds into market concentration dynamics,
wherein profit-seeking investors tend to invest in the most profitable companies with the largest
market share (Penrose, 2009). Furthermore, investment in certain strategies can create lock-ins
and path dependencies – as supply chains, trade routes, and policies are shaped by these
strategies.

12
For example, corporations that invested 282.7 million USD in lobbying for a tax benefit received 62.5 billion
USD in tax benefits, a return of 220USD for every 1USD invested or 22,000% (Alexander et al., 2009, p. 404).
Alberta, Canada, gave oil and gas companies 2 billion dollars in subsidies in 2018 (Buck, 2019). Facebook has
been lobbying against data privacy laws, because selling data is how they make a profit (Cadwalladr & Campbell,
2019).
13
With the exception of status and luxury goods. Those types of goods and services often entail different kinds
of profit-seeking strategies, some of which might be exploitative. One can think of the forced labor in conflict
zones for the extraction of diamonds, for instance (Reddy et al., 2005). Here, customers expect diamonds to be
expensive and are willing to pay high prices, but some companies can generate even more surplus from highly-
exploitative strategies.

16
5.3 Implications for the profit-driven economy
This conundrum reveals a deeper issue than the lack of proper regulation of market
activities. It is a systemic peril of the profit-driven economy that exploitation is usually more
profitable than non-exploitation. It is not via flukes, mishaps, or evil intentions that businesses
are driving sustainability problems, but rather businesses are acting rationally in a system that
defines profit-seeking as rational behavior and profitability as success.
This is a key inherent contradiction of the idea of sustainable capitalism: the need for
the relentless generation and pursuit of profit and, at the same time, the need to constrain the
generation and pursuit of profit to protect social and ecological wellbeing. Government
regulations and policies are meant to deter or prevent companies from using unsustainable
strategies (Dong, 2007). However, the drive for profit which is the centerpiece of the capitalist
economy motivates companies to innovate around those policies in order to generate profit,
either by going beyond one’s own legal jurisdiction or by influencing policy-making itself.
Some simply opt to pay the fees for breaking the law because they will still make a profit even
after the fees are paid (Ibid). In other words, the regulatory approach is not working because
constraining the profitability of a profit-driven system is riddled with contradictions.
Companies in such a system can always argue that they are just doing what they are meant to:
pursuing profit (Gladwin, 2011). They are supposed to make as much money as possible
because the capitalist way of organizing the economy is based on the assumption from
neoclassical economics that the stability of the system (i.e., jobs, income, consumption) relies
on profit-driven business owners making a return on their investments (Jones, 2018; Krugman
& Wells, 2018; Smith, 2009). Using this logic, they can legitimately argue that the benefits
outweigh the costs. In other words, the social norms, beliefs, goals, notion of value, and legal
structures of a profit-driven economic system, like capitalism, do not align with the aims of
sustainability.
This is why these strategies (and the exploitation they entail) are so ubiquitous. It is not
just a few market failures here or there, but rather exploitative strategies characterize much of
the economy, and drive the global sustainability crises of the 21st century. Currently, much of
the sustainability literature dealing with business and profit tends to focus on impacts.
However, focusing on profit-seeking strategies and the sources from which they derive profit
better allows for identifying and preventing exploitation rather than mitigating its impacts.

6. Conclusion
The analysis and framework presented in this paper is intended to contribute to a deeper
discussion about the relationship between profit and sustainability. Most sustainable business
approaches do not deal with the tradeoffs between profit, people, and planet (Isil & Hernke,
2017), so it is important that the field of ecological economics engages with these tradeoffs in
a more concrete and coherent way. By taking the discussion beyond either assuming that all
profit is exploitative or taking for granted that tradeoffs are negligible, this paper provides the
basis for discussions in the ecological economics community about the limits and tradeoffs of
profit, in relation to social-ecological sustainability.
The main insight gained from developing this framework is that there are only so many
ways of generating profit and that strategies derive profit from a limited number of sources,
including the exploitation of various stakeholders. In seeking financial gain, profit-driven
actors tend to gravitate to exploitative practices in order to cut costs and increase revenue as
much as possible. And in a profit-driven system, they can justify doing so, because they are
expected to employ strategies that generate profit. This reveals some inherent contradictions
and perils of a profit-driven economy when it comes to the role of regulation.
With a clearer understanding of how sustainability problems arise, there is a better
chance of resolving or transforming them. Understanding how profit is generated from a finite

17
set of sources via common types of business strategies can help researchers, policy-makers,
and practitioners more clearly identify and anticipate challenges to, and opportunities for,
different sustainability interventions.
This analysis clarifies the role of profit in sustainable economies. The fact that there are
so few benign sources of profit indicates that there are limits to profit and, as such, a sustainable
economy is not profit-driven; nor does it measure and define business success and value
creation in terms of profit. In essence, money should be seen as a means rather than an end.
This understanding of the limits to the pursuit and generation of profit should be
complemented by clarity around the purpose, distribution, and use of profit. There are also
systemic consequences in terms of whether profit is invested in social benefit or accumulated
by private owners (Hinton, 2020). When thinking about profit, we must ask what kind of value
it creates, for whom, and from which sources.

Acknowledgements: Timothée Parrique; Anselm Schneider; Sarah Cornell; Kristin Svärd;

Arnaud Diemer; Wijnand Boonstra; Michele-Lee Moore; and Theoharis Tziovaris.

References
Alexander, R., Mazza, S. W., & Scholz, S. (2009). Measuring Rates of Return on Lobbying

Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations.

Journal of Law and Politics, 25(4), 401–458.

Alstadsæter, A., Johannesen, N., & Zucman, G. (2018). Who owns the wealth in tax havens?

Macro evidence and implications for global inequality. Journal of Public Economics,

162, 89–100. https://doi.org/10.1016/j.jpubeco.2018.01.008

Balafoutas, L., Kerschbamer, R., & Sutter, M. (2017). Second-Degree Moral Hazard in a Real-

World Credence Goods Market. The Economic Journal, 127(599), 1–18.

https://doi.org/10.1111/ecoj.12260

Bapuji, H., Husted, B. W., Lu, J., & Mir, R. (2018). Value Creation, Appropriation, and

Distribution: How Firms Contribute to Societal Economic Inequality. Business &

Society, 57(6), 983–1009. https://doi.org/10.1177/0007650318758390

Binder, A. (2016). The hidden wealth of nations: The scourge of tax havens (book review).

Cambridge Review of International Affairs, 29(3), 1186–1205.

18
Blanes i Vidal, J., Draca, M., & Fons-Rosen, C. (2012). Revolving Door Lobbyists. American

Economic Review, 102(7), 3731–3748. https://doi.org/10.1257/aer.102.7.3731

Brierley, S. (2005). The advertising handbook. Routledge : Taylor & Francis.

http://public.eblib.com/choice/publicfullrecord.aspx?p=242126

Brown, Z. Y. (2019). An Empirical Model of Price Transparency and Markups in Health Care.

New Hampshire Department of Health and Human Services. http://www-

personal.umich.edu/~zachb/zbrown_empirical_model_price_transparency.pdf

Buck, J. (2019, February 21). They make billions in profits and yet corporate subsidies

continue. Environmental Defence.

https://environmentaldefence.ca/2019/02/21/make-billions-profits-yet-corporate-

subsidies-continue/

Cadwalladr, C., & Campbell, D. (2019, March 2). Revealed: Facebook’s global lobbying

against data privacy laws. The Guardian.

https://www.theguardian.com/technology/2019/mar/02/facebook-global-lobbying-

campaign-against-data-privacy-laws-investment

Chen, H., Parsley, D., & Yang, Y.-W. (2010). Corporate Lobbying and Financial Performance

(MPRA Paper No. 21114). Munich University Library.

Christie, E., & Holzner, M. (2006). What Explains Tax Evasion? An Empirical Assessment

based on European Data (Wiiw Working Papers). The Vienna Institute for

International Economic Studies. https://EconPapers.repec.org/RePEc:wii:wpaper:40

Connor, J. M., & Bolotova, Y. (2006). Cartel overcharges: Survey and meta-analysis.

International Journal of Industrial Organization, 24(6), 1109–1137.

https://doi.org/10.1016/j.ijindorg.2006.04.003

19
Cooper, T. (2004). Inadequate life? Evidence of consumer attitudes to product

obsolescence. Journal of Consumer Policy, 27(4), 421-449.

Cooper, T. (2005). Slower consumption reflections on product life spans and the ’throwaway

society. Journal of Industrial Ecology, 9(12), 51–67.

De Stefano, V. (2015). The Rise of the “Just-in-Time Workforce”: On-Demand Work, Crowd

Work and Labour Protection in the “Gig-Economy.” SSRN Electronic Journal.

https://doi.org/10.2139/ssrn.2682602

Deloitte. (n.d.). The Revenue Management Paradigm: Driving profitable growth through

strategic revenue management.

https://www2.deloitte.com/us/en/pages/strategy/solutions/pricing-and-

profitability-management-services.html#

Dong, H. (2007). Why does environmental compliance cost more than penalty?: —A legal

analysis on environmental acts of enterprises in China. Frontiers of Environmental

Science & Engineering in China, 1(4), 434–442. https://doi.org/10.1007/s11783-007-

0069-2

Dulsrud, A. (2017). Citizen-consumers: Consumer protection and empowerment. In M.

Keller, B. Halkier, T.-A. Wilska, & M. Truninger (Eds.), Routledge handbook on

consumption (online). Routledge, Taylor & Francis Group.

EOP. (2016). Artificial Intelligence, Automation, and the Economy. Executive Office of the

President of the United States of America.

https://obamawhitehouse.archives.gov/sites/whitehouse.gov/files/documents/Artifi

cial-Intelligence-Automation-Economy.PDF

Esteban, J., & Ray, D. (2006). Inequality, Lobbying, and Resource Allocation. American

Economic Review, 96(1), 257–279. https://doi.org/10.1257/000282806776157533

20
Federal Trade Commission. (n.d.). Pay for Delay. https://www.ftc.gov/news-events/media-

resources/mergers-competition/pay-delay

Feingold, D. (2013, August 5). Walmart’s War Against Unions—And the U.S. Laws That Make

It Possible. HuffPost. https://www.huffpost.com/entry/walmart-labor-

laws_b_3390994

Filgueiras Sauerbronn, F., Fatien Diochon, P., Mills, A. J., Raufflet, E. B., Academy of

Management, & Management Education and Development Division. (2018). The

dark side 3: Critical cases on the downside of business.

http://www.myilibrary.com?id=1023937

Foster, J. B. (2014). The theory of monopoly capitalism: An elaboration of Marxian political

economy (New Edition). Monthly Review Press.

Fox, A. W. (2017). The Pharmaceutical Year That Was, 2017. Pharmaceutical Medicine,

31(6), 379–382. https://doi.org/10.1007/s40290-017-0214-6

Friedman, G. (2014). Workers without employers: Shadow corporations and the rise of the

gig economy. Review of Keynesian Economics, 2(2), 171–188.

Fuentes-Nieva, R., & Galasso, N. (2014). Working for the few: Political capture and economic

inequality. Oxfam GB.

Galaz, V., Crona, B., Dauriach, A., Jouffray, J.-B., Österblom, H., & Fichtner, J. (2018). Tax

havens and global environmental degradation. Nature Ecology and Evolution, 2,

1352–1357. https://doi.org/10.1038/s41559-018-0497-3

Georgescu-Roegen, N. (1971). The entropy law and the economic process.

https://doi.org/10.4159/harvard.9780674281653

Gibson-Graham, J. K., Cameron, J., & Healy, S. (2013). Take back the Economy: An Ethical

Guide for Transforming Our Communities. University of Minnesota Press.

21
Gladwin, T. N. (2011). Capitalism Critique: Systemic Limits on Business Harmony with Nature.

Oxford University Press.

https://doi.org/10.1093/oxfordhb/9780199584451.003.0038

Guiltinan, J. (2009). Creative Destruction and Destructive Creations: Environmental Ethics

and Planned Obsolescence. Journal of Business Ethics, 89(S1), 19–28.

https://doi.org/10.1007/s10551-008-9907-9

Harvey, D. (2015). Seventeen contradictions and the end of capitalism (Paperback ed).

Profile Books.

Hinton, J. B. (2020). Fit for purpose? Clarifying the critical role of profit for sustainability.

Journal of Political Ecology, 27(1), 236–262. https://doi.org/10.2458/v27i1.23502

ILO. (2014). Profits and poverty: The economics of forced labour. International Labour Office.

ILO. (2016). Global Wage Report 2016/17: Wage inequality in the workplace. International

Labour Office.

Indounas, K. (2006). Making effective pricing decisions. Business Horizons, 49(5), 415–424.

https://doi.org/10.1016/j.bushor.2006.02.003

Isil, O., & Hernke, M. T. (2017). The Triple Bottom Line: A Critical Review from a

Transdisciplinary Perspective: TBL: A Critical Review from a Transdisciplinary

Perspective. Business Strategy and the Environment, 26(8), 1235–1251.

https://doi.org/10.1002/bse.1982

Jones, C. I. (2018). Macroeconomics (Fourth Edition, International Student Edition). W.W.

Norton & Company.

Jong-sung, Y., & Khagram, S. (2005). A Comparative Study of Inequality and Corruption.

American Sociological Review, 70(1), 136–157.

https://doi.org/10.1177/000312240507000107

22
Jung, S., Cho, H. J., & Jin, B. E. (2020). Does effective cost transparency increase price

fairness? An analysis of apparel brand strategies. Journal of Brand Management,

27(5), 495–507. https://doi.org/10.1057/s41262-020-00191-w

Knight, F. H. (1921). Risk, Uncertainty, and Profit. Houghton Mifflin Company.

Krugman, P. R., & Wells, R. (2018). Microeconomics (Fifth edition). Worth Publishers,

Macmillan Learning.

LeBaron, G., & Howard, N. P. (Eds.). (2015). Forced labour in the global economy: Beyond

trafficking and slavery short course. Volume 2. Open Democracy.

Lodsgård, L., & Aagaard, A. (2017). Creating value through CSR across company functions

and NGO collaborations. Scandinavian Journal of Management, 33(3), 162–174.

https://doi.org/10.1016/j.scaman.2017.05.002

Logan, J. (2004). The Fine Art of Union Busting. New Labor Forum, 13(2).

Magdoff, F., & Foster, J. B. (2011). What every environmentalist needs to know about

capitalism: A citizen’s guide to capitalism and the environment. Monthly Review

Press.

Menegus, B. (2018, September 26). Amazon’s Aggressive Anti-Union Tactics Revealed in

Leaked 45-Minute Video. Gizmodo. https://gizmodo.com/amazons-aggressive-anti-

union-tactics-revealed-in-leake-1829305201

Midler, P. (2011). Poorly made in China: An insider’s account of the tactics behind China’s

production game (Revised and updated). Wiley.

Moore, J. W. (2014). The End of Cheap Nature. Or How I Learned to Stop Worrying about

“the” Environment and Love the Crisis of Capitalism. In C. Suter & C. Chase-Dunn

(Eds.), Structures of the World Political Economy and the Future of Global Conflict

and Cooperation (pp. 285–314). LIT Verlag.

23
Oxford Dictionary. (2020a). “Capitalism.” In Oxford Dictionary. Oxford University Press.

https://www.lexico.com/definition/capitalism

Oxford Dictionary. (2020b). “Exploitation.” Oxford University Press.

Parrique, T. (2019). The political economy of degrowth. Université Clermont Auvergne.

Parrique, T., Barth, J., Briens, F., Kerschner, C., Kraus-Polk, A., Kuokkanen, A., &

Spangenberg, J. H. (2019). Decoupling Debunked: Evidence and arguments against

green growth as a sole strategy for sustainability. European Environmental Bureau.

Peet, R., Robbins, P., & Watts, M. (Eds.). (2011). Global political ecology. Routledge.

Penrose, E. T. (2009). The theory of the growth of the firm (4th ed., Rev. ed). Oxford

University Press.

Pirgmaier, E. (2018). Value, Capital and Nature: Rethinking the foundations of ecological

economics [Doctoral dissertation, University of Leeds].

https://etheses.whiterose.ac.uk/22895/1/0_Phd_final.pdf

Pirgmaier, E. (2021). The value of value theory for ecological economics. Ecological

Economics, 179, 106790. https://doi.org/10.1016/j.ecolecon.2020.106790

Reddy, S. G., Henry, D., & Oppong, J. R. (2005). Conflict, Diamonds and the Political Economy

of Instability in Africa. African Geographical Review, 24(1), 51–70.

https://doi.org/10.1080/19376812.2005.9756186

Rowland, C. (2013, March 17). Tax lobbyists help business reap windfalls. Boston Globe.

https://www3.bostonglobe.com/news/politics/2013/03/16/corporations-record-

huge-returns-from-tax-lobbying-gridlock-congress-stalls-

reform/omgZvDPa37DNlSqi0G95YK/story.html?arc404=true

24
Sainato, M. (2019, January 16). “It’s union busting 101”: Documents reveal Verizon’s attacks

on organized labor. The Guardian.

https://www.theguardian.com/business/2019/jan/16/verizon-union-busting-cwa

Satz, D. (2010). Why some things should not be for sale: The moral limits of markets. Oxford

University Press.

Schor, J. (2004). Born to buy: The commercialized child and the new consumer culture.

Scribner.

Schuurman, A. J. (2007). From citizen to consumer to citizen-consumer? The development of

the welfare state and the consumer society. In H. Moerbeek, A. Niehof, & J. van

Ophem (Eds.), Changing families and their lifestyles (pp. 213–231). Wageningen

Academic Publishers.

Smith, A. (2009). The wealth of nations. Thrifty Books.

Smith, A. G. (2016, July 6). Price-gouging and the dangerous new breed of pharma

companies. Harvard Business Review. https://hbr.org/2016/07/price-gouging-and-

the-dangerous-new-breed-of-pharma-companies

Story, L. (2007, January 15). Anywhere the Eye Can See, It’s Likely to See an Ad. New York

Times. https://www.nytimes.com/2007/01/15/business/media/15everywhere.html

Trucost, P. (2013). Natural Capital at Risk: The Top 100 Externalities of Business. Trucost PLC.

https://naturalcapitalcoalition.org/wp-content/uploads/2016/07/Trucost-Nat-Cap-

at-Risk-Final-Report-web.pdf

UNEP. (2020). Guidelines for Social Life Cycle Assessment of Products and Organizations

2020 (C. Benoît Norris, M. Traverso, S. Neugebauer, E. Ekener, T. Schaubroeck, S.

Russo Garrido, M. Berger, S. Valdivia, A. Lehmann, M. Finkbeiner, & G. Arcese, Eds.).

United Nations Environment Programme.

25
Wilkinson, R. G., & Pickett, K. (2010). The spirit level: Why greater equality makes societies

stronger (1. American ed., rev.updated). Bloomsbury Press.

Wong, J. C. (2019, April 2). Google staff condemn treatment of temp workers in “historic”

show of solidarity. The Guardian.

https://www.theguardian.com/technology/2019/apr/02/google-workers-sign-letter-

temp-contractors-protest

World Commission on Environment and Development. (1987). Our common future. Oxford

University Press. s

26
Paper 2: Means and Ends
 Profit as a Means or an End?
An analysis of diverse approaches to sustainable business*

Jennifer B. Hinton1,2,a, Sarah E. Cornell1

1 Stockholm Resilience Centre, Stockholm University, Kräftriket 2B, 10691,

Stockholm, Sweden
2 Centre for Studies and Research in International Development, Université Clermont-

Auvergne, 26 avenue Léon Blum, 63000, Clermont-Ferrand, France

a Corresponding author, email: jennifer.hinton@su.se
* Under review at Journal of Cleaner Production
Funding is acknowledged from the Marie Sklodowska Curie Fellowship Action in
Excellent Research (grant agreement no. 675153).

Abstract
This paper discusses tradeoffs between sustainability objectives and profit, examining
the implications of the argument that sustainable businesses should see profit as a
means, not an end. It highlights that there are two main ways in which a business can
see profit as an end: first, through voluntary objectives; and secondly, through private
financial rights. These two criteria are applied to examine a range of theoretical
approaches, incorporation structures, and third-party certifications that have been
developed with the aim of making business sustainable. The discussion highlights
inconsistencies, ambiguities, and shortfalls of these approaches in their treatment of
profit, and outlines ways to advance the theory and practice of sustainable business.

Keywords: Sustainable business; Social enterprise; Sustainable economy; Ecological

economics; Degrowth

1
1. Introduction
The role of profit is a surprisingly elusive topic in current approaches to
sustainable business. Oftentimes profit is implicitly taken for granted to be desirable
and necessary (e.g., Freeman, 1984, Stubbs & Cocklin, 2008; Schaltegger et al., 2016).
Other times it is regarded as necessary for businesses, but with questionable social and
environmental implications (e.g., Khmara & Kronenberg, 2018; Upward & Jones,
2016). Many analyses point to the systemic importance of economic actors’ relationship
to profit for social and ecological sustainability. For instance, Schnaiberg et al. (2002)
and Magdoff & Foster (2011) describe how profit-seeking drives the growth of
production and consumption, resulting in environmental damage. Bapuji et al. (2018)
explain how the creation, appropriation, and distribution of value by firms drive
economic inequality. Foster (2014) describes how the pursuit and private distribution
of profit drive the processes of inequality, consumerism, and ecological destruction.
And Schneider (2019) explores how capitalist accumulation keeps economic actors
trapped in unsustainable pathways, despite corporate social responsibility efforts and
environmental policies that set some boundaries on what businesses do.
In a context where norms for sustainability are not well-defined, theorists and
practitioners have suggested various ways to define and evaluate sustainable business.
A few approaches now advocate seeing profit as a means to achieving social and
ecological objectives rather than an end in itself (e.g., Schaeffer et al., 2015). This aligns
with Daly’s (1977) suggestion to view economic activity as a means to achieving
deeper societal goals and to re-orient society’s metrics for success and progress
accordingly.
This paper seeks to shed light on the tensions and inconsistencies in discourses
on profit in a variety of theoretical and practical approaches to sustainable business,
asking the overarching question:
Do these different approaches position profit as a means for business to fulfill social
and ecological needs or as an end in itself?

2. Theory
From an ecological economics standpoint, a sustainable economy is one in
which every person’s needs are met within the ecological limits of the planet (e.g.,
Jackson 2017, Daly 1996). Social and ecological constraints on economic activity are
acknowledged, unlike in mainstream understandings where the economy, society, and
the environment are seen as separate or overlapping (the so-called ‘three pillars of
sustainability’).
Daly’s Ends-Means Continuum (Figure 1) illustrates that the economy is best
thought of as helping societies to achieve the ends they desire, using the limited means
that nature provides (Daly, 1977). It is important to note that the continuum is not
suggesting a hierarchy of values (O’Neill, 2012). Rather, it simply indicates that the
biosphere provides the absolutely essential foundation for the existence of human
societies; the Ultimate Means is that which humans cannot themselves make. Ultimate
Ends are social goals which are desired only for themselves, and serve no other
instrumental purpose. O’Neill (2012) proposes the Ultimate End of most societies is
human wellbeing, which suffices for the purpose of the present discussion about the
role of profit.

2
 The goals that are desired
Ultimate ends only for themselves and are not • Human wellbeing
the means to achieve any other end

• Profit for owners

• Products and services for customers
The goals that the economy
Intermediate ends is expected to deliver
• Social benefit for community
• Meaningful work for employees
• Ecological protection and regeneration

• Profit
• Investment
All economic transactions
Intermediate means and stocks of artefacts
• Wages / labor
• Machinery / production processes
• Retail space

• Material inputs
All of Earth’s ecosystems and
Ultimate means their life-sustaining functioning
• Material outputs
• Energy inputs

Figure 1: The Ends-Means Continuum.

(Figure adapted from the national economy framings of Daly (1977) and O’Neill (2012) to show
the perspective of sustainable business.)

In this continuum, the economy can be seen as a set of intermediate means and
ends that uses nature to achieve human wellbeing. Therefore, the Ultimate Means, such
as forests, rivers, and soil, provide the basis for economic activity to make things that
are useful to humans. Daly’s continuum suggests that these Intermediate Ends of
economic activity, such as food, shelter and clothing, are in service of the Ultimate End:
human wellbeing.
But where does profit-making fit in this continuum? This concerns whether
money (as income, profit, gross domestic product, etcetera) can directly deliver human
wellbeing or if it contributes to meeting needs through Intermediate Ends, such as
healthcare, education, food, and housing. Social ecological economic approaches favor
positioning money as an Intermediate Means, rather than an end (Spash, 2017)1.
A political divide arises around the question of whether economic growth is
needed to alleviate poverty, reduce socially detrimental inequality, and halt
environmental damage – or whether it is the driver of unsustainability (Magdoff &
Foster, 2011). However, the many debates about the place of economic growth in a
transition to sustainability rarely turn their gaze to profit and its place in the service of
a sustainable future. Yet seen from a macro perspective, profit is an essential (if not
defining) factor in economic growth.
A few sustainable business scholars have begun to consider whether profit
should be treated as a means or an end in itself (e.g., Johanisova et al., 2013; Schaeffer
et al., 2015), but the emerging discourse is often inconsistent and ambiguous. For the
purposes of the analysis below, I use the simple accounting definition of profit as the
financial surplus that remains from revenues after business expenses are covered

1
Marxian scholars frame this debate in terms of a distinction between exchange value where money is
pursued as an end in itself, to be accumulated, and use value where money is merely the means to obtain
the use of a product or service, like food or transportation (Magdoff & Foster, 2011).

3
(Boyte-White, 2018)2. Sustainable business is often generically described in terms of
shifting from a situation focused on profit as a single economic bottom line detached
from its externalized social and environmental aspects, to the triple bottom line
approach in which profit is notionally balanced with other social and environmental
ends. However, expanding the scope of business responsibility to cover environmental
and social costs often requires the loss or foregoing of profit (Schnaiberg et al., 2002).
Whether profit is seen as a means or an end has to do with how profit is
perceived, prioritized, and pursued in practice. What does the business use its resources
to deliver? A business can generate revenue and profit in order to reinvest it into
business activities, distribute it to owners, and/or do something beneficial for society.
Traditionally, businesses seek to deliver products to their customers and dividends of
the profit to their owners (Micklethwaite & Wooldridge, 2003; Walker, 2017).
Community benefit and ecological restoration have also become more common
business aims with the emergence of social enterprises.
When profit is generated in order to provide financial gain for owners, it is an
end in itself. Thus, the profit of a business generating monetary wealth as an outcome
belongs in the intermediate ends category. When surplus revenues are generated in
order for the organization to do something beneficial or useful for society, profit is an
intermediate means to achieving non-monetary ends (Figure 1, right-hand column).
Seeing profit as an end it itself has to do with the articulation of profitability as
a stated business objective. Businesses can have the legal purpose of financial gain,
social benefit, or both (Reiser & Dean, 2017; Orsi, 2014), but if a business does not
specify that all of its profit serves a social or ecological purpose, then that business is
pursuing profit as an end to some extent. Businesses can, of course, see profit as both a
means and an end.
Seeing profit as an end it itself also has to do with the distribution of profit to
owners (or the intention to do so). This can only happen via private financial rights: the
legal right of private owners to receive profit and assets from the business3, whether or
not they see financial gain as their personal end. As Libecap (1986) pointed out,
property rights shape decision-making and behavior, because they define incentives
(p. 229). Private financial rights thus relate directly to a financial gain purpose of
business (Hull & Lio, 2006; Hinton, 2020). Of course, private financial rights do not
necessarily mean that profit will be privately distributed, but just that the company has
the right (and sometimes the responsibility) to see the distribution of profit as an end.
This suggests that efforts to assess and categorize approaches to sustainable
business can identify the acceptance or rejection of voluntary profit-oriented objectives
and of private financial rights as a heuristic tool to shed light on whether a company
pursues profit as an end or a means.

3. Methods and materials

For this paper, a sample of approaches to sustainable business from both theory
and real-world practice were collated (Table 1) that are prominent in contemporary

2 This article focuses on accounting profit rather than only residual profit (i.e., the surplus leftover after
business expenses have been covered and reinvestments have been made) because reinvested profit can
also be directed toward the aim of private financial gain or social benefit, which is a key aspect of this
analysis.
3
Also known as financial control (Orts, 2013), appropriation rights (Palmiter, 2003), residual control
rights (Grossman & Hart, 1986), and income rights (Foss & Foss, 2001).

4
academic and policy discussions, supported with an indicative literature review and
discourse analysis. The aim was to find approaches that take a bird’s eye view of what
sustainable business is, rather than isolated case studies or specific aspects of
management, in order to test the usefulness of this heuristic tool for determining how
different approaches position profit.
The examination of these approaches to sustainable business to determine
whether they treat profit as an end or as a means was guided by two questions:
• Does the approach set any bounds on whether profit is a business objective or
not?
• Does the approach set any bounds on private financial rights (i.e., the
distribution of profit to private owners)?
Twelve theoretical approaches were selected, using the search terms
‘sustainable business’, ‘sustainability theory of the firm’, ‘sustainability-oriented
theory of the firm’, ‘business and strong sustainability’, ‘post-growth business’, and
similar variants. Some authors have published more than one relevant piece of literature
(e.g. Johanisova, Bocken, and Lüdeke-Freund). Table 1 only includes the most recent
or most cited overview-oriented work of these authors, which tend to be meta-analyses,
literature reviews, and theoretical syntheses. The analysis includes theories and
conceptual frameworks that come from diverse perspectives, including mainstream and
critical perspectives, in order to explore how the treatment of profit might vary.
The selection of alternative incorporation structures and third-party
certifications is based on discussions encountered in the sustainable business literature,
and also at a variety of sustainable economy events. The selected approaches are
commonly referenced both in academic and grey literature (in the English-speaking
world). They are influential and enduring concepts that can traced through ‘new
economy’ and other sustainability-oriented events, including:
• 4th Annual Degrowth Conference, Leipzig, Germany, September 2014;
• Generation of the New Economy Festival, Schumacher College, UK, April
2015;
• 5th Annual Degrowth Conference, Budapest, Hungary, August 2016;
• Sustainable Brands Conference, Copenhagen, Denmark, September 2016;
• What the Fund?! event, Brussels, Belgium, February 2017;
• New Economy and Social Innovation global forum, Malága, Spain, April 2017;
• Transformations Conference, Dundee, Scotland, September 2017;
• 6th Annual Degrowth Conference, Malmö, Sweden, August 2018
If an approach does not specify that profit should be seen as a means to end,
then it has been assumed that the approach accepts the dominant assumption in
economics that firms pursue profit as an end in itself (Jones, 2018; Málovics et al.,
2007). In particular, approaches that espouse the triple bottom line concept are
considered as allowing for profit to be pursued as an objective (as explained below).

5
4. Results
Table 1 summarizes the assessment of approaches and whether they allow businesses
to pursue profit as an objective and have private financial rights.
Table 1 – How sustainable business approaches relate to profit

Approach to sustainable business Constraints on Constraints on

profit as private financial
an objective rights
Theoretical
Stakeholder theory (Freeman, 1984) No No
Sustainability business model (Stubbs & Cocklin, 2008) No No
Ontology for strongly sustainable business models No No
(Upward & Jones, 2016)
Principles for degrowth business (Khmara & Kronenberg, No No
2018)
Business models for sustainability innovation (BMfSI) No No
framework (Lüdeke-Freund, 2019)
Sustainability-oriented theory of the firm (Lozano et al., Unclear No
2015)
Sustainability-as-flourishing entrepreneurship (Schaeffer Unclear No
et al., 2015)
Sufficiency-driven business model (Bocken & Short, Unclear No
2016)
Typology from Business-as-Usual to True Business Unclear No
Sustainability (Dyllick & Muff, 2016)
Business models for sustainability (Schaltegger et al., Unclear No
2016)
Structured diversity of post-growth organisations (Schmid, Unclear No
2018)
Eco-social enterprises (Johanisova & Fraňková, 2017) Unclear No, but limits on
distribution
Incorporation Structures
Public benefit corporation (US) No No
Social purpose corporation (US) No No
Worker cooperative No No
Producer cooperative No Usually –
depends on type
of members
Consumer cooperative Yes No, but dividends
are a refund on
purchases made
Social cooperative (Italy and Greece) No Yes – limited
Community interest company limited by shares (UK) No Yes – limited
Community interest company limited by guarantee (UK) Yes Yes
Community benefit society (UK) Yes Yes
Company limited by guarantee (UK) Yes Yes
Commercial nonprofits: nonprofit corporation, association, Yes Yes
foundation

6
 Approach to sustainable business Constraints on Constraints on
profit as private financial
an objective rights
Third-Party Certifications
B Corporation No No
Future-Fit Business No No
Common Good Balance Sheet No No, but suggests
voluntary limits

4.1 Theoretical approaches

The majority of sustainability-oriented theoretical approaches to the firm adhere
to the triple bottom line concept (Isil & Hernke, 2017). Many approaches not only
assume that win-win-wins between people, planet, and profit are always possible, but
that they are necessary for sustainable business. Most take for granted that actors in the
economy are financially self-interested, firms are privately-owned, and profit is both a
main aim and a measure of success of business. Yet, some literature does explicitly
question and even critique the triple bottom line paradigm. Below, I give a brief
description of different approaches, starting with the least critical.
The stakeholder theory of the firm is often used to explain and guide corporate
social responsibility. In this theory, other stakeholders in addition to shareholders, such
as clients, employees, local communities, pressure groups, and environmental
concerns, should be taken into account in decision-making (Freeman, 1984; Freeman
et al., 2010). In the early 1980s, this was a quite radical shift from the single bottom
line approach, where the point of departure was that the only interest of business is to
deliver profit to the shareholders. Freeman acknowledges tensions, conflicts, and even
tradeoffs between the interests of various stakeholders, however does not denounce the
notion that a goal of business is to deliver financial returns to owners.
The ecological modernization approach to sustainable business more explicitly
relies on decoupling profit from environmental impact. Stubbs and Cocklin (2008) say
that organizations that subscribe to this perspective of sustainability ‘focus on being
profitable as well as on improving the welfare of their stakeholders and minimizing
environmental impact (reducing the ecological footprint).' (p. 106) and that,
'Shareholders invest for social & environmental impact reasons as well as for financial
reasons.' (p. 121). They also promote the notion that 'profits are an outcome, and a
facilitator, of environmentally and socially sustainable activities' (p. 113), alluding to
the absence of tradeoffs between profit and sustainability concerns.
The triple bottom line approach is the same as the ecological modernization
approach, but may not be as explicit about the role of decoupling. The triple bottom
line seeks to balance people, planet, and profit, as business objectives (Elkington,
1994). In other words, it positions profit as an end in itself, albeit one of three ends.
This conceptualization does not allow for many tradeoffs between profit on one hand,
and people and planet on the other. An example of this approach is Lozano et al. (2015),
which develops a ‘sustainability-oriented theory of the firm’ by synthesizing nine
different theories of the firm. They use a three pillars definition of sustainability (which
conceptualizes the economy, environment, and society as separate but overlapping),
with the added pillar of time. The ‘focus on profitability’ is related to the economic
dimension of sustainability in their final integrated figure (Figure 4, p. 441). The first
of their ten principles for sustainability-oriented firms is ‘the firm has to generate
profits’ (Lozano et al., 2015, p. 440). On the same page, they write about employees

7
being responsible for ‘balancing the profit generation objective of the company with its
responsibilities to all stakeholders’ (p. 440).
Comparable to the triple bottom line approach, some theories focus on the
generation of social, environmental, and economic value for various stakeholders. The
‘tri-profit’ concept proposed by Upward and Jones (2016) is presented as a critique to
the triple bottom line, but it is difficult to see what the difference really is. They say
that firms with the tri-profit mandate must create ‘sufficient financial rewards, social
benefits and environmental regeneration' (p. 106). Despite their stated strong
sustainability orientation, their approach does not resolve how the aim of generating
profit (i.e., financial rewards) can avoid entailing ever-increasing levels of consumption
and production. Lüdeke-Freund (2019) mentions tradeoffs between profitability and
social and ecological performance (p. 668), but goes on to say that ‘deliberately
designed business models can create and extend business case opportunities’ and
‘could also support the creation of ecological, social, and economic value’ (p. 669). He
reiterates at the end of the article that the objective of sustainable business is to create
economic, social, and environmental value (p. 676). Likewise, Schaltegger et al. (2016)
mention ecological and social value creation beyond profit (p. 267), but seem to assume
that profit is a natural objective when they write about the challenge that smaller firms
face in terms of ensuring sufficient profitability (p. 278). They also mention that the
‘mass market business model’ of large companies has the ability to generate profits
through selling large numbers of sustainable products (p. 280). They do not mention
profit for whom or for what, but they emphasize the importance of large market shares
for sustainability.
Some theoretical approaches contradict themselves about whether businesses
should see profit as an end in itself. In describing their concept of a sufficiency-driven
business, Bocken & Short (2016) discuss the need for businesses to move beyond eco-
efficiency and to stop pushing consumerism, because absolute demand must be
reduced. However, they also say that companies can do this profitably. They refer to
organic growth – implying that it is better for sustainability, but with no explanation of
why that would be the case. Dyllick & Muff (2016) advocate that businesses should go
from the triple bottom line approach to ‘Creating value for the common good’, but
then they write in very ambiguous ways about ‘including all three dimensions of the
triple bottom line’ (p. 168), making ‘business sense’ out of sustainability (p. 166), and
‘broadening business concerns’ (p. 168). Therefore, they seem to allow for profit to be
seen as an end, but it is not very clear.
A few approaches explicitly question whether sustainable businesses should see
profit as a goal. Schaeffer et al. (2015) introduce eight requisites for sustainability-as-
flourishing in entrepreneurship, one of which is ‘Profit as means, not an end’ (p. 403).
However, one of their key references for that section is an interview with Michael
Porter (Driver & Porter, 2012), who advocates for ‘shared value’, which he describes
as generating profits by creating social benefit (i.e., social benefit is a means to achieve
the end of profit). This approach still positions profit as a goal and marker of business
success, so it seems Schaeffer et al. themselves might be of two minds about whether
profit should be treated as an end or not.
The degrowth discourse is an approach that seeks to deliver human and
ecological wellbeing by moving away from the pursuit of economic growth. Khmara
& Kronenberg (2018) put forward seven criteria for assessing whether a business is
compatible with degrowth, none of which refer to financial surplus. Near the end of
their article, they say that the company should be ‘established to solve environmental
and social problems, rather than simply to make profits’ (p. 725). The use of the word

8
‘simply’ does not refute the goal of profit-making. It instead implies adding social and
environmental concerns to the profit goal. Similarly, Schmid (2018) says that, from a
degrowth perspective, sustainable organizations pursuing commercial activities are
‘primarily motivated by financial stability and independence, in order to further social
and environmental objectives’ (p. 20). Using ‘primarily’ rather than ‘only’ leaves some
room for businesses to see profit as an end, and it is unclear what Schmid thinks about
that. Schmid (2018) mentions the for-profit/not-for-profit distinction several times, but
does not see private financial rights as a hindrance to sustainable post-growth
organizations (p. 15). Johanisova & Fraňková (2017) write about ‘other-than-profit
goals’ in their description of eco-social enterprises, stating that ‘the founding documents
of many eco-social enterprises contain explicit social, cultural and/or environmental
aims’ and for eco-social enterprises that do not have such explicit aims, ‘the primary
goals are sustainable and equitable livelihoods for the community, rather than profit
for individual members or growth of their production’ (p. 512). Again, this wording
leaves open the possibility of businesses to see profit as an end, but only to a small
extent. Theirs was the only theoretical approach in this review that specified that
sustainable businesses should have limits on the private distribution of financial surplus
(i.e., limits on private financial rights).

4.2 Alternative incorporation structures

Advocating that firms should see profit as a means presupposes that any
business can shift its focus along the ends-means continuum, and that social and
ecological objectives can be the ends to which a business directs its operations. Yet, the
ownership and investment structures tied to financial rights are some structural factors
that can keep businesses focused on profit as an end.
Alternative incorporation structures are explicit about the purpose, aims, and
financial rights of firms, because they outline some of the legally-enforceable rights
and responsibilities of business. As such, incorporation structures of business determine
whether a triple bottom line strategy is even permissible. The incorporation structures
below require that a business have certain social and/or environmental concerns written
into its incorporation documents, but differ with regards to financial rights.
New incorporation structures for sustainable business started emerging in the
early 1980s (Borzaga & Tortia, 2007). However, cooperatives and nonprofit
commercial enterprises have a long history in many countries (ICA, 2018; Hall, 2006).
These older forms of business emerged long before knowledge of today’s sustainability
crises. They are generally more oriented around social benefit and less oriented towards
ecological stewardship. However, many cooperatives and nonprofit firms today choose
to incorporate ecological and wider sustainability concerns, as seen in community
supported agriculture initiatives, for example (Cameron, 2015).
Traditionally dependent on philanthropy and grants, not-for-profit (NFP)
corporations are increasingly moving into the business sphere, earning their own
revenue through the sale of goods and services (Dees et al., 2001; Maier et al., 2016;
Salamon et al., 2013). The names and types of not-for-profit incorporation structures
vary by place. In the UK, it is common for NFP businesses to incorporate as a charity
or a company limited by guarantee (NI Business Info, n.d.). In other places, NFP
businesses might be incorporated as associations or foundations (Hinton & Maclurcan,
2016). The key point is that all of these frameworks have a social mission mandate and
no private financial rights. Such nonprofits are often identified as ‘enterprising
nonprofits’, ‘not-for-profit businesses’, ‘nonprofit commercial enterprises’ or
‘nonprofit companies’ to distinguish them from charity-dependent nonprofits (Ibid).

9
Due to conventional economic distinctions between ‘the market’ and ‘civil society’,
this type of business is fairly overlooked and misunderstood. Schaeffer et al. (2015),
for instance, explicitly excluded articles about NFP business from their literature review
of social and sustainable enterprise, perhaps based on the common misunderstanding
that nonprofits cannot also be commercial enterprises. This misunderstanding might be
shaping a lot of the thinking about sustainable business (Thompson et al., 2011).
As the title of this legal structure indicates, not-for-profit organizations have a
legal mandate to see profit only as a means, and not as an end. This is enshrined in the
non-distribution constraint that prevents all nonprofit organizations, including those
that conduct commercial activities, from distributing profit to private persons (ICNL,
2013). Instead, they are legally required to put all financial surplus into their stated
social benefit mission, which is written into their incorporation documents (Ibid).
Cooperatives are another example of an old structure experiencing a bit of a
revival in sustainability circles. Developed in 1844, the cooperative principles (also
known as the Rochdale Principles) are: voluntary and open membership; democratic
member control; member economic participation; autonomy and independence;
education, training and information; cooperation among cooperatives; and concern for
community (ICA, 2018). None of these principles give guidance as to how cooperatives
should see profit. Some types of cooperatives tend to focus on profit more than others
(Chaddad & Cook, 2004). This can be seen when comparing cooperatives whose
members are consumers, workers, or producers:
• Consumer cooperatives have no focus on profit as a goal in itself. Instead, profit is
used to give consumer members better prices on the products they consume, and
perhaps an annual rebate. The only way members can capture the value of the
cooperative’s activities is via buying its goods and services, so the dividends are
always far less money than what a member has spent on buying the cooperative’s
products throughout the year. Thus, the ‘dividend’ in this case is more accurately
described as a rebate or refund on money already spent into the business. (Ruiz-
Mier & van Ginneken, 2006)
• Worker cooperatives can focus on profit as an end. The workers can receive the
profit as a bonus, on top of their wages, which is a way of financially enriching
owners (Pencavel & Craig, 1994). Unlike members of consumer cooperatives,
workers do not spend more into the co-op than they can take out.
• Producer cooperatives often have a clear focus on profit as a goal. These
cooperatives are made up of members that are sole traders or businesses themselves
and one of the key purposes of such cooperatives is to get better market prices (both
for buying and selling) and to generate better profits for producer-members (Gall &
Schroder, 2006). Agricultural and dairy cooperatives are a fairly common example
of this.
New alternative legal frameworks have also been developed. For instance, the
community interest company is an incorporation structure that the UK government
began offering in 2005 (Office of the Regulator of Community Interest Companies,
2013). There are two different types of community interest company (CIC): those that
are limited by guarantee cannot operate for profit and cannot distribute profit, whereas
those limited by shares can seek profit and are allowed to distribute up to 35% of the
profit as dividends to owners (Ibid). Therefore, the CIC limited by guarantee positions
profit only as a means to achieving social benefit, while the CIC limited by shares takes
a triple-bottom-line approach. Both types of CIC’s have an asset-lock, which means
there are no private financial rights to assets (Ibid).

10
 The social cooperative incorporation structure available in some European
countries is a worker cooperative with caps on the distribution, in order to maintain a
focus on social benefit (Nasioulas, 2012; Borzaga et al., 2017). The Community Benefit
Society in the UK, requires the pursuit of a social benefit mission and does not allow
for private financial rights to profit or assets (NI Business Info, n.d.). Social purpose
corporations and benefit corporations, available in some US states, are relatively new
incorporation structures designed to ensure that businesses hold a public benefit
purpose alongside their purpose of providing financial gain for owners. The benefit
corporation framework is more stringent than the social purpose corporation, as it
requires businesses to consider a number of stakeholders (including the environment),
as well as to have a social purpose, whereas there is not a stakeholder consideration
requirement for social purpose corporations (Berger, 2015).

4.3 Third-party certification

In the realm of sustainable business practice, third-party certification schemes
have gained popularity in recent years, as mentioned in some of the scholarly work
cited above. These schemes involve a self-written report of social and ecological
impacts as well as external audits by the third-party organization, to ensure that certain
sustainability standards are met.
Perhaps the most well-known is the B Corporation (also known as B Corp)
certification (mentioned in Khmara & Kronenberg (2018) and Upward & Jones (2016)).
The B Corp scheme was developed in the US, but is now offered internationally. It is
only available to for-profit firms (B Corps, 2018a), although they can be subsidiaries
of nonprofits (e.g., Greyston Bakery, 2017). The ‘B’ stands for benefit, which means
that this certification scheme is often confused with the benefit corporation
incorporation structure in the United States (e.g., Upward & Jones, 2016). The B Corp
certification has tried to bridge this gap between strategy and incorporation structure
by requiring that all B Corps have a social mission written into their governing
documents (B Corps, 2018b).
The Future-Fit Business Benchmark is another well-known certification
scheme. It was developed by an international group of scientists (Future-Fit Business,
2018a). Future-Fit takes sustainable business a step further away from the focus on
profit, by trying to make sure that companies are both helping, and in no way hindering,
progress towards social and ecological sustainability. The organization offers a
framework of ‘break-even goals’, which it says demarcate the line in the sand of which
company impacts are acceptable (or not), as well as ‘positive pursuits’, which are
guidelines for actions that companies can and should take in order to actively build a
more sustainable society. All of the ‘positive pursuits’ are focused on social and
ecological sustainability – there are no prescriptions for financial performance. This is
different from most triple bottom line approaches. The Future-Fit Business website
represents its work graphically as moving from a focus on profit, to the three pillars of
sustainability, to a nested concept of sustainability. However, its methodology guide
repeatedly refers to the triple bottom line and states ‘The so-called Triple Bottom Line
of People, Planet and Profit has never been more relevant’ (Future Fit Foundation,
2018, p. 8). This makes it clear that there are no constraints on profit being a business
objective in this framework.
The Common Good Balance Sheet is another third-party certification that is
gaining popularity, particularly in Europe and Latin America. It is based on a matrix
that consists of a horizontal axis of ‘values’ and a vertical axis of ‘stakeholders’. The
values include: human dignity; solidarity and social justice; environmental

11
sustainability; and transparency and co-determination. The stakeholders consist of:
suppliers; owners, equity- and financial-service providers; employees; customers and
business partners; and the social environment. (ECG, 2018a). They put forth a vision
of voluntary caps on dividends and their workbook has an entire section on what is fair
distribution of profits to shareholders, but this approach still allows for businesses to
see profit as an objective and to distribute it to shareholders (ECG, 2018b, p. 37).

5. Discussion: Inconsistencies, contradictions, and ambiguity

The literature and approaches reviewed above show that the discourse around
sustainable business is riddled with contradictions, inconsistencies, and ambiguity
when it comes to seeing profit as a means or an end. This lack of clarity about business
goals and private financial rights could keep economies from becoming more
sustainable. Opportunists can co-opt or highjack concepts of sustainable business,
making it harder for companies that are sincerely committed to sustainability to
distinguish themselves from greenwashing competitors.
The main point of inconsistency lies in the triple bottom line concept itself. Most
theoretical approaches to sustainable business simply bolt environmental and social
concerns onto profit-seeking aims. These approaches advocate for transforming
business purpose, or redefining business success, but end up simply adding social and
environmental concerns to the status quo purpose of profit-making (e.g., Schaltegger et
al., 2016; Stubbs and Cocklin, 2008; Dyllick & Muff, 2016). Stubbs and Cocklin (2008)
state that sustainability cannot just be an add-on, but their section called ‘Redefining
the Purpose of Business’ could more accurately be called ‘Expanding the Purpose of
Business’, as the case studies it describes are both profit-seeking firms. These authors
say that organizations should pursue sustainability for ethical and economic reasons,
saying that it is both the right thing and the smart thing to do. This is the rhetoric of
win-win-wins. Schaefer et al. (2015) state that ‘profit as a means, not an end’ is a
requisite for sustainability, but the article remains vague about the role of profit, with
phrases like ‘creating value beyond profit’ and ‘beyond private economic wealth’. This
language can be interpreted as meaning a focus on creating ecological and social value
in addition to financial value, rather than instead of financial value, or not focusing on
financial value at all. Some even explicitly call for stopping the simple expansion of a
company’s mission by adding people and planet on to profit as a goal, but then their
own approach ends up doing exactly that (e.g. Stubbs & Cocklin, 2008; Upward &
Jones, 2016). Even those that take a critical view of the triple bottom line explicitly
allow or even promote profit as a goal (e.g., Upward and Jones, 2016; Dyllick & Muff,
2016; Future-Fit Business, 2018b).
This carries through into praxis. All three of the certification schemes examined
had this inconsistency as well. The B Corps website says that the certification’s main
goal is to ‘redefine business success’ (B Corps, 2018a), but it is only available to profit-
seeking firms. The main developer of the Common Good Balance Sheet is quoted on
the website as saying, ‘Our current economic system is on its head. Money has become
an end in itself rather than a means for what really counts: a good life for all’ (ECG,
2018c). And their Theoretical Basis webpage says that the real purpose of business is
meeting human needs and that money is only a means of economic activity to measure
whether this purpose is being fulfilled. (ECG, 2018c). Yet, the Common Good Balance
Sheet also allows for profit to remain as a goal (ECG, 2018d).
Some authors do not advocate or align with an approach that promotes profit as
an end but also do not clearly describe it as a means (e.g., Khmara & Kronenberg,

12
2018). Likewise, Schmid (2018) describes sustainable firms as those that focus on using
profit as a means to achieving social and ecological aims, but in allowing for private
financial rights, his description still allows for profit to be seen as an end. Johanisova
& Fraňková (2017) offer more concrete guidance, by advocating for limitations on the
distribution of profit, yet still allow for private financial rights, which seemingly does
not align with their description of eco-social enterprises as pursuing ‘other-than-profit’
goals.
Ambiguous language about things like profitability, benefit, prosperity,
viability, value creation, blended value, and social enterprise should raise red flags for
sustainability researchers. These terms are often used in ways that generate vagueness
and confusion around whether businesses should pursue profit as an objective or not.

6. Conclusion: Underwhelming solutions for overwhelming

problems
In the context of transformations to a sustainable economy, it is important to
discuss and clarify the place of private financial rights and the pursuit of profit. Good
scholarship on the topic of sustainable business requires logical coherence and
consistency on these critical issues. This review found that theoretical approaches and
third-party certifications for sustainable business are often unclear or self-contradictory
about whether business should see profit as a means or an end. It also finds that several
existing incorporation structures can actually contribute clarity in the concrete terms of
legal rights and responsibilities.
The principles offered in prominent approaches to sustainable business are too
vague to transform the actual purpose of business in the direction of sustainability, as
most of them allow for the business-as-usual objective of private financial gain. One
can argue that adding sustainability concerns to expand a company’s mission beyond
short-term financial gains is better than not doing so, and indeed this is often the
response to critiques of the triple bottom line. But given the rapidly worsening severity
of the global sustainability crises in the 21st century, is that enough? With evidence
mounting that there is neither the time nor the biophysical capacity to waste on being
less bad (Brondizio et al., 2019; UN Environment 2019), the difference between doing
less bad and actually behaving in a socially-ecologically sustainable way must be
acknowledged and brought to the fore. Most of the sustainable business approaches
presented here reveal a lack of understanding of the severity of sustainability issues and
industry’s role in contributing to the problems and solutions. Many imply that, as far as
business is concerned, the sustainability problem is simply a problem of having
unsustainable products and services (e.g., Schaltegger et al., 2016), so the solution is
for companies to focus on selling larger quantities of more sustainable products and
services. As long as such mixed messages lead the way in defining sustainable business,
there is little basis for expecting real progress to be made.
This points to another issue inherent in many of the approaches – looking to the
business world itself to problematize sustainability and to identify solutions. Current
goals, strategies, and definitions of sustainability by mainstream businesses are a poor
basis for creating guidelines and models for sustainable business. As Málovics et al.
(2007) point out, if mainstream businesses are left to choose a definition of ‘sustainable
business’, they will choose one that fits best with their existing goals and strategies. Isil
and Hernke (2017) also highlight that incumbent businesses might much prefer a vague
definition of sustainability that they can just bend to their needs, rather than having to
bend themselves to the needs of sustainability.

13
 Sustainable business is not about making a smorgasbord of principles from
which managers can pick and choose. It is about defining clear, actionable principles
that steer all business behavior to help deliver social wellbeing within ecological limits,
whether or not that entails sacrificing financial surplus (Thompson et al., 2011).
Approaches that synthesize, expand, and add on to business-as-usual goals ignore the
manifold tradeoffs between profit-seeking and sustainability concerns.
If we are to take sustainability seriously, then we cannot afford to settle for
businesses running sustainability practices alongside their current very destructive
practices. Rethinking the role of business in either worsening sustainability crises or
helping to resolve them, points to the likelihood that only a small portion of existing
businesses are actually sustainable. However, with clear principles and institutional
support, businesses might be able to transition in a sustainable direction – and if they
are not able to do so, then they are not compatible with a sustainable future. A business
might be regarded as sustainable if it sees profit only as a means to achieving social
benefit and it meets all of the social and ecological criteria outlined by the third-party
certifications examined in this article. If all companies in the world were to meet those
conditions, then we might have an economy that delivers wellbeing for all people within
the Earth’s ecological limits.

Acknowledgements: We would like to thank Timothée Parrique, Arnaud Diemer, and

Wijnand Boonstra for feedback on earlier drafts of this article.

References
B Corps, 2018a. What are B Corps? https://www.bcorporation.net/what-are-b-corps
(accessed June 26, 2018).
B Corps, 2018b. Protect Your Mission. https://www.bcorporation.net/become-a-b-
corp/why-become-a-b-corp/protect-your-mission (accessed July 5, 2018).
Bapuji, H., Husted, B., Lu, J., Mir, R., 2018. Value Creation, Appropriation and
Distribution: How Firms Contribute to Societal Economic Inequality. Business
and Society 57(6), 983-1009.
Berger, M., 2015. California Social Purpose Corporation: An Overview, Nonprofit Law
Blog, November 10. http://www.nonprofitlawblog.com/california-social-
purpose-corporation-an-overview/ (accessed July 5, 2018).
Bocken, N.M.P, Short, S.W., 2016. Towards a sufficiency-driven model.
Environmental Innovation and Societal Transitions 18: 41- 61.
Borzaga, C., Poledrini, S., Galera, G., 2017. Social Enterprise in Italy: Typology,
Diffusion and Characteristics. Euricse, Working Papers, 96 /17.
Borzaga, C., Tortia, E., 2007. Social Economy Organisations in the Theory of the Firm.
In: Noya, A., Clarence, E., (Eds.), Social Economy: Building Inclusive
Economies. Local Economic and Employment Development (LEED), OECD
Publishing, Paris, pp. 23-60. https://doi.org/10.1787/9789264039889-en
Boyte-White, C., 2018. What is the difference between revenue and profit?
Investopedia. https://www.investopedia.com/ask/answers/122214/what-
difference-between-revenue-and-profit.asp (accessed July 2, 2018).

14
Brondizio, E.S., Settele, J., Díaz, S., Ngo, H.T., 2019. Global assessment report on
biodiversity and ecosystem services of the Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem Services. IPBES secretariat, Bonn,
Germany.

Cameron, J., 2015. Enterprise Innovation and Economic Diversity in Community

Supported Agriculture: Sustaining the Agricultural Commons. In: Roelvink, G.,
St. Martin, K., Gibson-Graham, J.K., (Eds.), Making Other Worlds Possible:
Performing Diverse Economies. University of Minnesota Press, Minneapolis,
pp. 53-71.
Chaddad, F.R., Cook, M.L., 2004. Understanding New Cooperative Models: An
Ownership-Control Rights Typology. Review of Agricultural Econonomics 26
(3): 348- 360.
Daly, H.E., 1977. Steady-state Economics: The Economics of Biophysical Equilibrium
and Moral Growth. W.H. Freeman, San Francisco.
Daly H.E. 1996. Beyond Growth: The economics of sustainable development. Beacon
Press, Boston.

Dees, J. G., Emerson, J., Economy, P., 2001. Enterprising nonprofits: A toolkit for
social entrepreneurs. John Wiley & Sons, New York.

Driver, M., Porter, M. E., 2012. An interview with Michael Porter: Social
entrepreneurship and the transformation of capitalism. Academy of
Management, Learning and Education 11, 421-431.
Dyllick, T., Muff, K., 2016. Clarifying the Meaning of Sustainable Business:
Introducing a Typology from Business-as-Usual to True Business
Sustainability. Organization and Environment 29 (2): 156- 174.
ECG (Economy for the Common Good), 2018a. Common Good Matrix.
https://www.ecogood.org/en/common-good-balance-sheet/common-good-
matrix/ (accessed June 26, 2018).
ECG (Economy for the Common Good), 2018b. Full Balance Sheet Workbook.
https://www.ecogood.org/media/filer_public/56/e8/56e8c64e-c940-431b-8e7f-
dce680bb8737/ecg_full_balance_sheet_workbook.pdf (accessed June 26,
2018).
ECG (Economy for the Common Good), 2018c. Vision.
https://www.ecogood.org/en/vision/ (accessed June 26, 2018).
ECG (Economy for the Common Good), 2018d. Theoretical basis.
https://www.ecogood.org/en/vision/theoretical-basis/ (accessed June 29, 2018).
Elkington, J., 1994. Towards the sustainable corporation: Win-win-win business
strategies for sustainable development. Calif. Manage. Rev. 36, 90-100.
Foss, K., Foss, N.J., 2001. Assets, Attributes and Ownership. International Journal of
the Economics of Business 8(1), 19–37.
Foster, J.B., 2014. Theory of Monopoly Capitalism: An Elaboration of Marxian
Political Economy, new ed. Monthly Review Press, New York, USA.
Freeman, R.E., 1984. Strategic Management: A stakeholder approach. Cambridge

15
 University Press, Cambridge, UK.
Freeman, R.E., Harrison, J.S., Wicks, A.C., Parmar, B., de Colle, S., 2010. Stakeholder
Theory: The State of the Art. Cambridge University Press, Cambridge, UK.
Future-Fit Business, 2018a. What is Future-Fitness? http://futurefitbusiness.org/what-
is-future-fitness/ (accessed June 26, 2018)
Future-Fit Business, 2018b. Future-Fitness and the Sustainable Development Goals.
http://futurefitbusiness.org/resources/sustainable-development-goals/
(accessed June 26, 2018).
Future Fit Foundation, 2018. Future-Fit Business Benchmark Methodology Guide
Release 2.0.4. https://futurefitbusiness.org/benchmark-documents/
(downloaded June 26, 2018).
Gall, R.G., Schroder, B., 2006. Agricultural Producer Cooperatives as Strategic
Alliances. International Food and Agribusiness Management Review 9 (4), 26-
44.
Greyston Bakery, 2017. Looking Ahead Report. http://greyston.org/wp-
content/uploads/2017/12/Looking-Ahead-FINAL.pdf (downloaded June 26,
2018).
Grossman, S.J., Hart, O.D., 1986. The Costs and Benefits of Ownership: A Theory of
Vertical and Lateral Integration. Journal of Political Economy 94 (4), 691–719.
Hall, P.D., 2006. A Historical Overview of Philanthropy, Voluntary Associations, and
Nonprofit Organizations in the United States, 1600- 2000. In: Powell, W.W.,
Steinberg, R. (Eds.), The Nonprofit Sector: A Research Handbook, second
ed. Yale University Press, New Haven, USA.
Hinton, J., Maclurcan, D., 2016. How on Earth: Flourishing in a Not-for-Profit World
by 2050 (working draft). Post Growth Publishing, Ashland, OR.
https://arxiv.org/pdf/1902.01398.pdf
Hinton, J., 2020. Fit for Purpose? Clarifying the critical role of profit for sustainability.
Journal of Political Ecology 27 (1), 236- 262.
Hull, C.E., Lio, B.H., 2006. Innovation in Non-profit and For-profit Organizations:
Visionary, Strategic, and Financial Considerations. Journal of Change
Management 6 (1), 53- 65.
ICA (International Cooperative Alliance), 2018. Cooperative Identity.
https://www.ica.coop/en/whats-co-op/co-operative-identity-values-principles
(accessed July 6, 2018).
ICNL (International Center for Not-for-Profit Law), 2013. Frequently Asked
Questions. http://www.icnl.org/contact/faq/index.html (accessed June 10,
2019).
Isil, O., Hernke, M.T., 2017. The Triple Bottom Line: A Critical Review from a
Transdisciplinary Perspective. Business Strategy and the Environment 26,
1235- 1251.
Jackson, T., 2017. Prosperity without Growth: Foundations for the economy of
tomorrow. Routledge, Oxon, UK.

16
Johanisova N., Crabtree T., Fraňková E., 2013. Social enterprises and non-market
capitals: A path to degrowth? Journal of Cleaner Production 38, 7-16.

Johanisova, N., Fraňková, E., 2017. Eco-Social Enterprises. In: Spash, C. (ed.),
Routledge Handbook of Ecological Economics: Nature and Society. Routledge,
Oxon, UK, pp. 507- 516.
Jones, C.I., 2018. Macroeconomics, International Student Edition – fourth ed. W.W.
Norton and Company, New York, USA.
Khmara, Y., Kronenberg, J., 2018. Degrowth in business: An oxymoron or a viable
business model for sustainability? Journal of Cleaner Production 177, 721- 731.
Libecap, G.D., 1986. Property Rights in Economic History: Implications for Research.
Explorations in Economic History 23, 227 – 252.
Lozano, R., Carpenter, A., Huisingh, D., 2015. A review of 'theories of the firm' and
their contributions to Corporate Sustainability. Journal of Cleaner Production
106, 430 - 442.
Lüdeke-Freund, F., 2019. Sustainable entrepreneurship, innovation, and business
models: Integrative framework and propositions for future research. Business
Strategy and the Environment 29, 665- 681.
Magdoff, F., Foster, J., 2011. What Every Environmentalist Needs to Know About
Capitalism. NYU Press, USA.
Maier, F., Meyer, M., Steinbereithner, M., 2016. Nonprofit Organizations Becoming
Business-Like: A Systematic Review. Nonprofit and Voluntary Sector
Quarterly 45 (19), 64- 86.
Málovics, G., Csigéné, N.N., Kraus, S., 2007. The role of corporate social responsibility
in strong sustainability. The Journal of Socio-Economics 37, 907- 918.
Micklethwait, J., Wooldridge, A., 2003. The Company: A Short History of a
Revolutionary Idea. Modern Library, New York, USA.
Mont, O., 2004. Product-Service Systems: Panacea or Myth? (Doctoral Dissertation).
International Institute for Industrial Environmental Economics, Lund
University, Sweden.
Nasioulas, I., 2012. Social Cooperatives in Greece Introducing New Forms of Social
Economy and Entrepreneurship. International Review of Social Research 2 (2),
151- 171.
NI Business Info, n.d. Choose the right structure for your social enterprise.
https://www.nibusinessinfo.co.uk/content/limited-companies-social-purpose
(accessed May 15, 2020).
O'Neill, D.W., 2012. Measuring progress in the degrowth transition to a steady state
economy. Ecol. Econ. 84, 221-23. doi:10.1016/j.ecolecon.2011.05.020
Office of the Regulator of Community Interest Companies, 2013. Community interest
companies: guidance chapters.
https://www.gov.uk/government/publications/community-interest-companies-
how-to-form-a-cic (accessed July 5, 2018).

17
Orsi, J., 2014. Practicing Law in the Sharing Economy. American Bar Association,
Chicago, USA.
Orts, Eric., 2013. Business Persons: A Legal Theory of the Firm. Oxford University
Press, Oxford, UK.
Palmiter, A.R., 2003. Ownership Interests – Bundle of Rights, in Law and Valuation:
Financial Valuation in Legal Contexts. Wake Forest University School of Law
website. https://users.wfu.edu/palmitar/LawandValuation/chapter%205/5-4-
1.htm (accessed June 26, 2018).
Pencavel, J., Craig, B., 1994. The Empirical Performance of Orthodox Models of the
Firm: Conventional Firms and Worker Cooperatives. Journal of Political
Economy 102 (4), 718- 744.
Reiser, D.B., Dean, S.A., 2017. Social Enterprise Law: Trust, Public Benefit and
Capital Markets. Oxford University Press, Oxford, UK.
Ruiz-Mier, F., van Ginneken, M., 2006. Consumer Cooperatives: An Alternative
Institutional Model for Delivery of Urban Water Supply and Sanitation
Services. Water Supply & Sanitation Working Note No. 5, World Bank,
Washington, D.C., USA.
Salamon, L., Sokolowski, S.W., Haddock, M.A., Tice, H.S., 2013. The State of Global
Civil Society and Volunteering: Latest findings from the implementation of the
UN Nonprofit Handbook, Working paper no. 49. Johns Hopkins Center for
Civil Society Studies, Baltimore, USA.
Schaefer, K., Corner, P.D., Kearins, K., 2015. Social, Environmental and Sustainable
Entrepreneurship Research: What is needed for sustainability-as-flourishing?
Organization & Environment 28 (4), 394- 413.
Schaltegger, S., Lüdeke-Freund, F., Hansen, E.G., 2016. Business Models for
Sustainability: A Co-Evolutionary Analysis of Sustainable Entrepreneurship,
Innovation, and Transformation. Organization and Environment 29 (3), 264-
289.
Schmid, B., 2018. Structured Diversity: A Practice Theory Approach to Post-Growth
Organisations. management revue 29 (3), 281-310.
https://doi.org/10.5771/0935-9915-2018-3-281
Schnaiberg, A., Pellow, D., Weinberg, A., 2002. The treadmill of production and the
environmental state. In: Mol, A., Buttel, F., (Eds.), The Environmental State
Under Pressure (Research in Social Problems and Public Policy, Vol. 10).
Emerald Group Publishing Limited, Bingley, UK, pp. 15-32.
Schneider, A., 2019. Bound to Fail? Exploring the Systemic Pathologies of CSR and
Their Implications for CSR Research. Business & Society 59 (7), 1303-1338.
Spash, C., 2017. Social Ecological Economics. In: Spash, C. (Ed.), Routledge
Handbook of Ecological Economics: Nature and Society. Routledge Taylor and
Francis Group, Abingdon-on-Thames, UK.
Stubbs, W., Cocklin, C., 2008. Conceptualizing a 'Sustainability Business Model'.
Organization and Environment 21 (2), 103- 127.
Thompson, N., Kiefer, K., York, J.G., 2011. Distinctions not Dichotomies: Exploring
Social, Sustainable, and Environmental Entrepreneurship. In: Lumpkin,

18
 G.T., Katz, J.A. (Eds.), Social and Sustainable Entrepreneurship (Advances in
Entrepreneurship, Firm Emergence and Growth, Vol. 13). Emerald Group
Publishing Limited, Bingley, UK, pp. 201-229. https://doi.org/10.1108/S1074-
7540(2011)0000013012
Upward, A., Jones, P., 2016. An Ontology for Strongly Sustainable Business Models:
Defining an Enterprise Framework Compatible with Natural and Social
Science. Organization and Environment 29 (1), 97-123.
UN Environment, 2019. Global Environment Outlook – GEO-6: Summary for
Policymakers. UN Environment, Nairobi, Kenya. DOI
10.1017/9781108639217.
Walker, P., 2017. The Theory of the Firm: An overview of the economic mainstream.
Routledge Taylor and Francis Group, Abingdon-on-Thames, UK.

19
Paper 3: Fit for Purpose
 Fit for purpose? Clarifying the critical role of profit for sustainability

Jennifer B. Hinton 1

Stockholm University, Sweden

Université Clermont-Auvergne, France

Abstract
This conceptual article contributes to the post-growth strand of political ecology literature, which seeks to find
sustainable ways of organizing the economy that do not require economic growth. It explores the idea that
transitioning to post-growth societies requires a transition in the relationship-to-profit of business. I first
conceptualize relationship-to-profit as the intersection of purpose, investment, and ownership of firms.
Specifically, for-profit business structures entail a financial gain purpose, private ownership, and unlimited
returns on investment; whereas not-for-profit business structures have a social benefit purpose, collective
ownership, and limited returns on investment. I then outline ideal types of for-profit and not-for-profit
economies, based on the differences between these two kinds of relationship-to-profit. The first ideal type shows
how the for-profit business structure drives consumerism, economic growth, and ecological harm, as well as
inequality and political capture, preventing post-growth transitions. These dynamics might be slowed down by
businesses that seek to balance private financial gain with social benefit (known as dual-purpose businesses).
The second ideal type describes the dynamics that might be expected in an economy consisting of not-for-profit
businesses, which have a legal mandate to pursue only social benefit. This analysis explains how transitioning
from for-profit to not-for-profit forms of business might change some of the most problematic dynamics of the
economy, allowing for post-growth transformations. A brief discussion of the possible shortcomings of a not-
for-profit economy is also offered.
Keywords: Not-for-profit business, nonprofit enterprise, for-profit business, relationship-to-profit, post-
growth, degrowth, economic growth, sustainability, sustainable economy

Résumé
Cet article conceptuel contribue au volet post-croissance de la littérature en écologie politique, qui cherche à
trouver des moyens durables d'organiser l'économie qui ne nécessitent pas de croissance économique. Il explore
l'idée que la transition vers des sociétés post-croissance nécessite une transition dans la relation au profit des
entreprises. J'ai d'abord conceptualisé la relation au profit comme l'intersection du «sens du but», de
l'investissement et de la propriété des entreprises. Plus précisément, les structures commerciales à but lucratif
impliquent un objectif de gain financier, la propriété privée et un retour sur investissement illimité; tandis que
les structures commerciales à but non lucratif ont un objectif d'avantages sociaux, de propriété collective et de
retours sur investissement limités. J'expose ensuite les types idéaux d'économies à but lucratif et sans but
lucratif, en fonction des différences entre ces deux types de relation au profit. Le premier type idéal montre
comment la structure commerciale à but lucratif stimule le consumérisme, la croissance économique et les
dommages à l'environnement. En outre, il crée des inégalités et la capture par les intérêts politiques, empêchant
les transitions post-croissance. Cette dynamique pourrait être ralentie par les entreprises qui cherchent à
équilibrer les gains financiers privés et les avantages sociaux (appelés «entreprises à double usage»). Le
deuxième type idéal décrit la dynamique qui peut être attendue dans une économie composée d'entreprises à
but non lucratif, qui ont un mandat légal de rechercher uniquement des avantages sociaux. Cette analyse

1
Jennifer B. Hinton, Stockholm Resilience Centre, Stockholm University, Sweden and Centre for Studies and Research in
International Development, Université Clermont-Auvergne, France; Email: Jennifer.hinton "at" su.se. Acknowledgements:
Thanks to my supervisors Sarah Cornell, Arnaud Diemer, and Wijnand Boonstra, as well as colleagues who gave me
feedback on drafts (especially Timothée Parrique, María Mancilla García, and David Collste). Thanks to the three reviewers
for giving very constructive feedback. Funding is acknowledged from the Marie Sklodowska Curie Fellowship Action in
Excellent Research (grant agreement no. 675153).
Hinton Fit for purpose? Clarifying the role of profit for sustainability

explique comment le passage de formes commerciales à but lucratif à des organisations à but non lucratif
pourrait changer certaines des dynamiques les plus problématiques de l'économie, permettant des
transformations post-croissance. Une brève discussion des lacunes possibles d'une économie à but non lucratif
est également proposée.
Mots-clés: entreprise sans but lucratif, entreprise à but non lucratif, entreprise à but lucratif, relation avec le
profit, post-croissance, décroissance, croissance économique, durabilité, économie durable

Resumen
Este artículo conceptual contribuye al debate sobre post-crecimiento en ecología política, un debate que trata
de hallar modos sostenibles para la organización de la economía que no necesiten crecimiento económico. El
artículo explora la idea según la cual la efectiva transición hacia una sociedad post-crecimiento requiere una
transición en la relación-al-lucro de las compañías de negocios. Primero, conceptualizo la relación-al-lucro
como la intersección de la razón de ser u objetivo de la compañía, el modelo de inversión que sigue y su
estructura de propiedad. Concretamente, las estructuras con ánimo de lucro conllevan una razón de ser ligada
al beneficio financiero, una estructura de propiedad privada, y retornos de inversión ilimitados; mientras tanto,
las compañías sin ánimo de lucro tienen una razón de ser ligada al beneficio social, la propiedad colectiva, y
limitados retornos de inversión. Después, propongo ideales tipo de economías con y sin ánimo de lucro, basados
en las diferencias entre esos dos tipos de relación-al-lucro. El primer ideal tipo muestra como una economía
basada en compañías con ánimo de lucro conlleva consumismo, crecimiento económico y daño ambiental, así
como desigualdad y captura del proceso político, lo que impide una transición hacia economías post-
crecimiento. Estas dinámicas podrían verse ralentizadas por la existencia de negocios que traten de equilibrar
el beneficio financiero con el social (los llamados negocios de doble-objetivo). El segundo ideal tipo describe
las dinámicas que pueden esperarse de una economía constituida por compañías de negocios sin ánimo de lucro,
es decir compañías que tengan por mandato legal buscar únicamente el beneficio social. Este análisis explica
cómo, al pasar de una razón de ser ligada al lucro, a una sin ánimo de lucro, las compañías podrían cambiar
algunas de las dinámicas más problemáticas de la economía, permitiendo una transformación hacia el post-
crecimiento. Finalmente, propongo una breve discusión sobre las limitaciones posibles de una economía sin
ánimo de lucro.
Palabras clave: compañías sin ánimo de lucro; empresas sin ánimo de lucro; compañías con ánimo de lucro;
relación al lucro; post-crecimiento; decrecimiento; crecimiento económico; sostenibilidad; economía sostenible

1. Introduction: the overlooked possibility of a not-for-profit market economy

Given the magnitude of the global ecological crisis, it has become clear that aggregate economic activity
must decrease in order to minimize environmental pressures (Parrique et al. 2019). Yet, this downsizing of the
global economy must happen alongside the fulfillment of human needs. How can the economy be organized in
ways that allow for the fulfillment of every person's needs while also fitting within the ecological limits of the
planet? Political ecology research has an essential role to play in analyzing the power relations that maintain
and drive the dominant growth-based economic system, as well as developing alternative pathways that promote
social and environmental justice (e.g. Hornborg 2017; Paulson 2017; Trainer 2019).
Growth-critical scholars have identified profits, competition, and capital accumulation as important
drivers of economic growth and inequality (Magdoff and Foster 2011; Richters and Siemoneit 2017). When
companies seek to maximize profit, they tend to expand production and prompt more consumption through
advertising and, in this way, profit-seeking drives economic growth and environmental damage (Jackson 2017:
109, 140; Kallis 2018; Varey 2010). Global market concentration and competition among transnational
corporations exacerbates this destructive growth dynamic (Foster 2014; Korten 2001). As such, these scholars
point to the need for businesses to move away from profit-maximization. However, there is not a clear
articulation of the structures that might be keeping these dynamics in place. Paech (2014) mentions private
equity-based investment driving the need for businesses to generate profit, which in turn drives economic
growth. Paech also mentions that alternative corporate forms like cooperatives, foundations, and non-profit
organizations can diminish structurally-driven expectations for profit, and thus also assuage the growth
imperative (Ibid). However, he leaves his audience wondering how and why this might be the case.

Journal of Political Ecology Vol. 27, 2020 237

Hinton Fit for purpose? Clarifying the role of profit for sustainability

If the profit-driven nature of firms is an important driver of economic growth, environmental damage,
and inequality, then post-growth 2 research should dedicate some analysis to how non-profit-driven types of
business might change the dynamics of the market. 3 Upon searching for literature that gives a more in-depth
analysis of business from a post-growth perspective, I found Bocken and Short (2016), Gebauer (2018),
Johanisova et al. (2013), Khmara and Kronenberg (2018), Schaeffer et al. (2015) and Upward and Jones (2016).
Yet, all of these approaches take for granted the orthodox economic assumptions that:

• firms are financially self-interested actors;

• firms are (or must be) privately owned; and
• making money is the main aim of business.

The underlying assumption is that the market is necessarily driven by profit.

There is, however, a body of literature that explores not-for-profit forms of business. 4 These types of
business exist only to deliver social benefit, have no private owners, and must use all financial surplus for social
benefit (Roeger et al. 2012; Salamon and Anheier 1997; Salamon et al. 2013). 5 They have another kind of
relationship to profit, which entails a different approach to purpose, investment, and ownership. Bridging the
scholarship on not-for-profit business and post-growth transformations, Maclurcan and I (Hinton and
Maclurcan 2016; Hinton and Maclurcan 2017) have argued that a market of not-for-profit businesses might
better allow for a post-growth economy because there would be a better circulation of wealth and no systemic
pressure to produce and consume more in order to deliver profit to owners.
This article explores whether transitions to post-growth societies require a parallel transition to not-for-
profit forms of business. In the analysis below, I will offer a conceptualization of the distinction between for-
profit and not-for-profit forms of business as 'relationship-to-profit.' I will then describe and compare two ideal
types of economies based on the difference in the relationship-to-profit of business. 6 In doing so, I use a systems
analysis approach to identify and describe key feedback loops that drive the behavior of the economy. The first
ideal type is that of a for-profit economy, composed of for-profit businesses. Driven by financial gain, they
strive to deliver unlimited returns on equity-based investment to private owners who have financial rights to
profit. The second ideal type is a not-for-profit economy in which all businesses aim to achieve social benefit,
have no private owners, and must direct all profit to their social benefit mission. I will be discussing the
implications of relationship-to-profit for economic growth, economic equality, and environmental integrity, and
give evidence to support why these claims are plausible. In doing so, this article builds bridges between
different, but synergistic, fields of study including: political ecology, post-growth economics, Eco-Marxian
scholarship, organizational theory, sustainable business literature, and nonprofit studies.

2
I use the term 'post-growth' rather than 'degrowth' because I see the latter as a subset of a larger post-growth perspective,
which includes growth-critical scholarship that is not necessarily associated with the degrowth movement, such as Tim
Jackson's Prosperity without growth (2009); Kate Raworth's Doughnut economics (2017); and Peter Victor's Managing
without growth (2008), as well as much eco-Marxian literature.
3 I define 'market' as the meeting of people for the purpose of selling and buying goods and services (Oxford Dictionary

online, market entry).

4 I define 'business' as an entity that sells goods or services, in line with the Oxford Dictionary's definition as "a commercial

operation or company" with commerce being defined as "the activity of buying and selling" (Oxford Dictionary online,
business entry and commerce entry).
5 Johanisova et al. (2013) refer to Salamon et al.'s work, but choose not to focus on the legal distinction between for-profit

and not-for-profit – instead favoring 'not-for-profit' and 'not-only-for-profit' business (the latter is still for-profit in legal
terms). In grouping not-for-profit and not-only-for-profit companies together, they ignore the legal differences between
these organizational forms, which either allow for or do not allow for the pursuit and distribution of profit for the enrichment
of private owners - a distinction which I argue in this article has critical ramifications for the aggregate economy.
6 The terms 'organizational form', 'legal type', 'profit-orientation', 'regulatory form', 'legal category', 'organizational type',

and 'organization orientation' have also been used by authors in various fields to refer to the distinction between for-profit
and not-for-profit firms.

Journal of Political Ecology Vol. 27, 2020 238

Hinton Fit for purpose? Clarifying the role of profit for sustainability

2. Conceptualizing 'relationship-to-profit'
To better understand how the 'relationship-to-profit' of companies might impact sustainability issues, we
first need a broader conceptualization of the firm that allows for the inclusion of not-for-profit types of business.
It is commonly assumed that all businesses are for-profit, but there is a growing body of research about the role
of enterprising nonprofits and social enterprises as a relatively new kind of actor in the market. This research
has shown that not-for-profit businesses exist and can be found in diverse geographies and sectors of the
economy (e.g. Borzaga and Tortia 2007; James and Rose-Ackerman 1986; Roeger et al. 2012 and Salamon et
al. 2013).
Not-for-profit (hereafter NFP) businesses differ from their for-profit (FP) counterparts in that they have
a social benefit purpose (which can include environmental missions) and all of their profit 7 must be used to
achieve their mission. This means that there can be no private distribution of profit – known as the 'non-
distribution constraint' (ICNL 2013).
Maclurcan and I (Hinton and Maclurcan 2016; Hinton and Maclurcan 2017. distinguish between not-
for-profit businesses and traditional not-for-profit organizations in that NFP businesses generate more than half
of their revenue through the sale of goods and services and seek to be financially self-sufficient through trade;
while traditional not-for-profit organizations rely mostly or wholly on philanthropy, grants, and donations.
Some examples of NFP businesses mentioned in Hinton and Maclurcan (2017) include: Wikispeed (a car
manufacturing company in the U.S); Zenman Energy (a solar power plant designer in the U.S); Glas Cymru (a
water works company in Wales); and BRAC (a large organization that operates banks, food processing plants,
renewable energy infrastructure, professional print and copy shops, and department stores in order to fund
educational programs and provide healthcare services to rural populations in Bangladesh). 8 Based on this
definition, the term 'NFP business' can include a wide variety of firms, such as mutual insurance companies,
commercial foundations, state-owned companies, commercial associations, credit unions, many social
enterprises, and nonprofits that do business (Borzaga and Tortia 2007; Hinton and Maclurcan 2016). 9
Thus, relationship-to-profit refers to the difference between not-for-profit and for-profit firms, and can
be conceptualized as the nexus between three key elements of any business: purpose, investment, and ownership
(Figure 1).

Purpose
In legal terms, the purpose of a business can be: financial gain for owners, social benefit, or both financial
gain for owners and social benefit 10 (Reiser and Dean 2017). Because NFP businesses are such a new actor in

7
Profit here refers to the financial surplus that remains from total revenues after business expenses have been paid. This is
what accountants and micro-economists call 'total profit', 'accounting profit', 'operating profit' or 'net income', which is the
surplus revenue left over after variable costs and fixed costs (including product inputs, payroll, debts, rent, and utility
payments. have been covered (Boyte-White 2018). This is the surplus from which dividends to owners are distributed. It
only refers to explicit costs and excludes opportunity costs. There is a common misunderstanding that employees are paid
from profits. This is only true in the case of bonuses and dividends, but wages and salaries are considered business expenses
and are thus accounted for before profit is calculated.
8 For more examples, see Hinton and Maclurcan (2016: 34-68).

9 Consumer cooperatives can also be considered NFP businesses. Their social benefit purpose is to provide accessible, high-

quality products to their customers and any profit they make goes back into their mission. If they distribute some of the
profit to their customers at the end of the year, it is better characterized as a refund on some of the purchases the customers
have made, rather than a dividend. Members of a consumer cooperative will not take more money out of their cooperative
than they pay in. Worker cooperatives, however, would fit better into the for-profit category, because they are allowed to
privately distribute profit to the worker-owners and, unlike consumers, the workers are expected to take more money out of
the business than they put in, which can lead to private inurement. Producer cooperatives might be FP or NFP, depending
on whether their producer-members are FP or NFP firms themselves. A dairy producer cooperative, for instance, might be
made up of for-profit dairy businesses or NFP dairy businesses.
10 There can be a lot of diversity in the way a business articulates its purpose, but all purposes would fit into one of these

two categories. The purpose of providing livelihoods or earning a living is inherent in all businesses, whether for-profit or
not-for-profit. The NFP framework allows for a living wage for employees but not passive income for owners, whereas the
FP framework allows for both.

Journal of Political Ecology Vol. 27, 2020 239

Hinton Fit for purpose? Clarifying the role of profit for sustainability

the economy, it is only recently that scholars even began thinking about the legal purpose of business.
Traditionally, it has been assumed that all firms exist to deliver returns to investors (e.g. Walker 2017). Any
business that delivers profit to owners or intends to do so, whether in the short- or long-term, is legally
considered as having a financial gain purpose and is, thus, for-profit 11 (Salamon 2010). For-profit legal
frameworks allow for the purpose of private financial gain. This is not to say that all for-profit firms see profit
as their main aim, but they all have the right to. As such, a number of for-profit companies do see financial gain
as their main purpose – their bottom line.

Figure 1: Relationship-to-profit of business.

In contrast, NFPs can only have a social benefit purpose and must direct any profit into achieving social
benefit (ICNL 2013; Salamon 2010). This constraint is in place to ensure that the social mission is not disrupted
by the pursuit of private wealth. In legal terms, NFP businesses can only use profit as a means to achieving
social benefit, while for-profit businesses can pursue profit as an end in itself. When it comes to legal
frameworks, social benefit is defined by local laws or policies, but around the world these definitions tend to
include a wide variety of goals (Salamon et al. 2013), such as providing: healthcare, rehabilitative support,
professional training, childcare, education, a place for community gatherings, healthy or sustainable products,
as well as protecting animals and wilderness.

Investment
Investment is another important aspect of relationship-to-profit. There are three broad categories of
investment in business: equity-based (e.g. shares) 12, debt-based (e.g. loans and bonds), and donation-based

11 Some FP businesses act in a more profit-hungry way than their peers, but this study seeks to better understand the effects

of relationship-to-profit on the sustainability of the economy, so these differences in strategy are ignored.
12 The term 'equity' here refers to the monetary value of ownership shares in a firm. This can refer to any kind of shares of

ownership, including in a publicly traded company, a worker cooperative, a partnership, or family-owned business. A not-
for-profit entity can hold equity in a business.

Journal of Political Ecology Vol. 27, 2020 240

Hinton Fit for purpose? Clarifying the role of profit for sustainability

investment (e.g. subsidies, grants and philanthropy) (Ojong 2015). 13 For-profit frameworks allow for all three
kinds of investment. Not-for-profit businesses can only take debt- and donation-based investments, but due to
the non-distribution constraint, they cannot accept equity-based investment (Reiser and Dean 2017).
This has important consequences for how a business uses its resources, in terms of whether financial
returns on investment are unlimited, limited, or non-existent. Donation-based investment has no returns. Debt-
based investment involves returns limited to the percentage of interest on the debt and there are no further
returns after the principal and interest have been repaid. Equity-based investment, on the other hand, has no
limits. In theory, a for-profit business could pay dividends as a return on investment to its owners at as high a
sum as its managers deem viable, for as long as it operates.
The different kinds of investment are tied to the purpose of the business. Equity-based investment in for-
profit companies is in service of the purpose of delivering financial gain to owners – that is why it is unlimited.
Debt-based investment can be in service of the purpose of financial gain for lenders or in service of the purpose
of social benefit, depending on how it is done. Donation-based investment is typically done in service of a social
benefit purpose – that is why there is no expectation of a return. In fact, it is exactly because investment is tied
to purpose that NFPs cannot take equity-based investment. If they could offer unlimited returns to private
owners, then they would, at least in part, be serving the purpose of private financial gain.

Ownership
When it comes to ownership, for-profit frameworks involve private ownership by individuals or by other
companies, in which equity gives owners the right to take money and assets out of the business, known as
'financial rights' (Palmiter 2003). 14 This is clearly in service of the financial gain purpose. Not-for-profit
frameworks are more accurately described as having a form of collective ownership, wherein individuals (such
as managers. can have control rights, but no financial rights. 15 Here I use Stein's definition that collective
ownership is the situation in which "all rights are vested in an undivided collectivity", whereas private
ownership is a situation in which "divided rights are vested in individuals'"(1976: 299). 16 Collective ownership
then means that managers have control rights (the right to make decisions on behalf of the organization) but not
financial rights. In private ownership, however, there are private financial rights, and so the control rights and
financial rights often overlap (e.g. a manager owning shares or an owner making management decisions). This
lack of private financial rights in NFP business relates to the fact that no profit can be privately distributed
because the firm exists to deliver social benefit, not financial gain (James and Rose-Ackerman 1986). Table 1
shows the key differences between for-profit and not-for-profit.
Let us articulate the three aspects together (Figure 2). Every business starts with a legal purpose, which
can be financial gain and/or social benefit. The entrepreneurs decide whether to use a for-profit or not-for-profit
framework 17, which determines the form of ownership. The relationship-to-profit of the legal framework
determines the kinds of investment the business can take and the ways in which it can use its financial surplus
after operating expenses are paid. If it is FP, it can distribute the profit to owners, reinvest it in the business, or
use it for social benefit; whereas if it is NFP, it can only reinvest the profit or use it for social benefit. Of course,

13 Ojong (2015. also refers to membership fees as its own category. Many companies pre-sell their goods and services in
order to raise capital, but this is just another form of debt-based investment because the business has an obligation to pay
the investor back in the form of products or services in the future (such as a year-long membership).
14 These rights have also been called rights to surplus/profit (e.g. Grossman and Hart 1986). Such rights usually include the

rights to transfer and liquidate the equity (Palmiter 2003).

15 Not-for-profits can own other NFPs, but a FP can never own an NFP. On the other hand, an NFP can own an FP subsidiary

that delivers all of its profit to the NFP owner(s), which then must use those resources for their social benefit mission.
16 Although some scholars conceptualize NFPs as having no ownership (e.g. Young 1982). I chose to use the concept of

collective ownership. This definition includes both financial rights and control rights, the latter of which are important for
envisioning alternative economic systems. If I were to choose the concept of no ownership, then I would be restricting the
definition of ownership to financial rights.
17 Important to note here is that entrepreneurs are not always aware of their legal framework options and sometimes choose

the most familiar or convenient framework, regardless of whether it best aligns with their intentions for the business
(Hillman et al. 2018).

Journal of Political Ecology Vol. 27, 2020 241

Hinton Fit for purpose? Clarifying the role of profit for sustainability

decision-making, leadership, and strategies vary from firm to firm, but the differences in relationship-to-profit
guide and constrain business strategies and behavior.

Relationship-to-profit For-profit Not-for-profit

Purpose Financial gain for owners and Social benefit
possibly social benefit
Investment Equity-, debt-, or donation- based Debt- or donation-based with no
with private financial rights private financial rights
Ownership Private Collective

Table 1: The three key differences in relationship-to-profit.

The guiding and constraining principles of the NFP framework (i.e. having a core social benefit mission,
no private financial rights, paying limited or no returns on investment, and having to use all surplus for social
benefit. means there is good reason to explore how these features might create different system dynamics than
the for-profit economy, especially with regards to political ecology issues like economic growth, inequality,
and environmental impact.

Figure 2: Purpose, investment, and profit in business.

3. The sustainability implications of a for-profit economy

This section analyzes three problematic reinforcing feedback loops that could be expected in a for-
profit economy: consumerism, inequality, and political capture. 18 I limit this analysis to the minimal number
of variables needed to explain the most direct links between the relationship-to-profit of business and the
sustainability issues listed above.

Consumerism and growth

It is often assumed that profit-seeking leads to economic growth through investment in production and
innovation (e.g. Jones 2018; Krugman and Wells 2018). In such an economy, entrepreneurs strive to generate
profit (propelled by the so-called profit motive. so as to reinvest it in production and innovation. 19 Profit can be
increased in three main ways, by: increasing revenue per item, decreasing costs per item, or increasing the
number of items sold. High levels of growth, profitability, cashflow, revenue, and market share are considered
signs of a successful for-profit business, and that is what managers and owners seek (Penrose and Pitelis 2009).

18 These issues were outlined to some extent in Hinton and Maclurcan (2016: 78-99; 109-114). This article offers a deeper
analysis, with a clearer conceptualization of relationship-to-profit and the way in which purpose, ownership, and investment
interact to shape the economy's dynamics.
19 This analysis is meant to stay at a generalizable level, so 'production' refers to any variety of goods and services.

Journal of Political Ecology Vol. 27, 2020 242

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Profit is also seen as the financial reward for taking the risks of investment (Knight 1921). The more sales that
are made, the more profit will be generated, and a greater return on investment will be delivered to owners (in
the short-, medium-, or long-term). 20
The more money the owners receive, the more money they are willing and able to invest in firms, with
the expectation of a return on investment (Krugman and Wells 2018). One report of a survey of over 2,000
American millionaires found that the current net worth of individuals (at the time of the survey) corresponded
with the amount of wealth they aspired to have amassed in the future - higher net-worth individuals aspired to
have more total wealth than lower net-worth individuals (UBS 2015). The study also describes this constant
seeking of more wealth as a treadmill that rich individuals feel they cannot dismount, due to costly lifestyles,
feelings of financial insecurity, and social pressure (Ibid). Another effect of more profit, aside from increased
dividends going to owners, is that managers will reinvest more money in firms' production in order to generate
even more sales and profit (Penrose and Pitelis 2009). Figure 3 illustrates this feedback loop of the profit-motive
leading to more investment, production (and innovation, sales, profit and dividends, which in turn increases the
profit motive. 21,22
If there were no demand for products, however, then investment and innovation would not necessarily
boost sales. So, businesses use advertising in order to attract customers (Brierley 2005; Varey 2010). It follows
that one can expect that more advertising will lead to more sales, which translates into rising GDP (i.e. economic
growth, Jackson 2017).
All production, use, and disposal of goods and services entails some degree of environmental impact, as
researchers in the fields of ecological economics (Daly 1996), ecological Marxism (Magdoff and Foster 2011),
bioeconomics (Georgescu-Roegen 1971) and degrowth (Hickel and Kallis 2019) have described. 23 Therefore,
more production and sales entail increased environmental impact. Figure 4 illustrates advertising's effect on
demand and the impacts of production and sales on environmental damage.
Planned obsolescence is another prominent profit-seeking strategy that many companies use to sell more
items, which has an important impact on economic growth and the environment (Guiltinan 2009; Jackson 2017).
Planned obsolescence refers to consumer goods being designed to break down or seem outdated earlier than
necessary in order to prompt consumers to buy new products and services (Guiltinan 2009).
Examples of products that are commonly designed to become obsolete include so-called 'fast fashion',
textbooks, lightbulbs, many single-use or disposable products, and electronic products like printers, laptops and
mobile phones. 24 The more planned obsolescence there is in the economy, the more people buy products and
services to replace those that have become obsolete (Cooper 2004, 2005; Guiltinan 2009; Kuppelwieser et al.
2019). The further sales there are due to short product-life and perceived obsolescence, the more harm is done
to the biosphere, through production and disposal (Pope 2010; Rivera and Lallmahomed 2016). Also, increased
sales reap greater amounts of profit, which leads to larger dividends going to owners. Managers will also tend
to invest in more advertising and planned obsolescence to deliver profits if they have proven to be successful

20
'Owners' include anyone holding equity in the business, such as partners and shareholders.
21
If you are unfamiliar with causal loop diagrams, it is important to note that + refers to a positive causation between two
variables (i.e. more of X causes more of Y, or less of X causes less of Y than what would have otherwise been the case),
and – indicates a negative causation (i.e. more of X causes less of Y, or less of X causes more of Y). 'R' indicates a reinforcing
feedback loop, wherein the variables continue to grow or to decline, typically at an increasingly rapid rate. 'B' indicates a
balancing feedback loop, which creates goal-seeking behavior in an effort to maintain a desired level of a certain variable.
I will use orange to designate new variables and causal connections as I build up to a more complex diagram of the system.
22 In this article's diagrams, 'Production' refers to production of existing goods and services, but also the innovation and

offer of new ones. 'Sales' can also be interpreted as consumption.

23 Firmly grounded in a post-growth perspective and using the precautionary principle of ecological economics, this analysis

takes the assumption that absolute, long-term decoupling of economic activity from environmental pressures on the global
scale can only happen to a limited extent, so an increase in the sale of goods and services will always have more
environmental impact (Daly 1996; Jackson 2017; Parrique et al. 2019).
24 The fact that planned obsolescence is an increasing problem in the global economy is evidenced by the growth of

consumer movements, like the international 'Right to Repair' movement, and even national laws to counter planned
obsolescence, as in France (Khaleeli 2015).

Journal of Political Ecology Vol. 27, 2020 243

Hinton Fit for purpose? Clarifying the role of profit for sustainability

strategies. On the aggregate level of the economy, there will be an increase of all of these variables as long as
they successfully satisfy the purpose of the market: to deliver returns on investment.

Figure 3: Feedback of financial gain purpose, investment, and production

In summary, economic growth and profitability depend to a large degree on maintaining and spreading
the culture of consumerism 25 (Schor 2004). If the above chain of logic is correct, then profit-motivated
investment drives three main reinforcing feedback loops that contribute to consumerism; the loops of
production, advertising, and planned obsolescence (depicted in Figure 5). In these ways, profit-seeking
companies drive growth in sales and economic output (measured as profit and GDP) which in turn drives
environmental damage. Without significant balancing factors, reinforcing feedback dynamics like these result
in patterns of exponential growth over time. These system dynamics can be seen empirically in the exponential
growth of economic activity, consumption of resources, and ecological damage over the last century or so. This
is what Steffen et al. (2015) call the 'Great Acceleration.' 26

Figure 4: Advertising fuels demand and environmental damage.

25 Consumerism is defined as "the preoccupation of society with the acquisition of consumer goods" (based on Merriam-
Webster's entry for 'consumerism', 2019).
26Aside from the environmental impacts of consumerism, there are also high social costs, such as the weakening of social

ties, low self-esteem, and a general decline of wellbeing (Dittmar et al. 2014; Kasser and Kanner 2004).

Journal of Political Ecology Vol. 27, 2020 244

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Figure 5: Feedback loop of consumerism.

Inequality
Although economic inequality and environmental problems are often treated as separate issues, eco-
Marxian literature is quick to point out that both issues are a result of the way in which the global economy is
currently organized (e.g. Magdoff and Foster 2011). The following section shows how, in addition to driving
economic growth and ecological deterioration, the for-profit economy also exacerbates inequality (Hinton and
Maclurcan 2016). Three different reinforcing loops contribute to growing levels of inequality in this for-profit
ideal type of economy. The first is the loop of private accumulation of profit; the second is market concentration;
and the third is the stagnation of wages.
In orthodox economic theory, the long-term stability of for-profit markets relies on owners reinvesting
most or all of their returns back into production, which should create more jobs and income for workers. This
would still be bad for the biosphere, but it would at least not systematically create inequality. However, this is
not what happens in reality. Owners' desire for financial gain drives them to reinvest enough profit to make
more money, but it also compels them to save and accumulate a large portion of their income. For instance, one
study found that high net-worth individuals save 27% of their wealth as cash and bank deposits and about 17%
of their income is invested in real estate (often seen as a form of saving) (Capgemini 2018). Of the amount
invested in equities (31%) and fixed income (16%) (Ibid), only a relatively small amount goes to investment in
businesses via initial public offerings or further stock issuance, whereas most of it goes into financial
speculation rather than production (Lazonick, 2018: 119). Over time, these owners are able to accumulate
wealth, which enables them to buy even more shares in the same or other businesses and, thus, accumulate even
more money 27 (Hinton and Maclurcan 2016). Furthermore, the richer a person is, the higher the rates of return
on capital they will receive, because the super-rich can afford sophisticated wealth management services
(Picketty 2014).
These dynamics of accumulation and concentration are evidenced by the fact that, in the past three
decades in the US, dividends have increased as a proportion of corporate profits (Lazonick 2018: 117). It is also
clear in income tax data. For those in the richest tax brackets in the US in 2012 (those with annual incomes of

27 In the year 2012 in the US, for the 99% of tax filers with incomes of less than US$500,000, more than about 75% of their

income came from salaries and wages, whereas salaries and wages only made up 38% of total income for taxpayers with
incomes between US$1 and US$5 million, and only 18% of income for taxpayers with incomes above US$10 million
(Austin and Williams 2015).

Journal of Political Ecology Vol. 27, 2020 245

Hinton Fit for purpose? Clarifying the role of profit for sustainability

US$5 million or more) capital gains 28 were the largest source of income, closely followed by business income 29,
interest, and dividends (Austin and Williams 2015). This trend is also reflected in the UN's International Labor
Organization (ILO) and OECD statistics, showing that larger profit shares in high-income economies have often
not led to more investment (ILO 2016).
In short, owners invest to get more out than they put in. Over time, successful investors do not have to
invest more, because the shares they already own naturally increase their wealth by a certain amount every year,
so they can accumulate money whether they reinvest or not. This strengthens the power of the reinforcing
feedback loop of wealth accumulation (as shown in Figure 6). The economist Thomas Hungerford found this
process operating in the US., where capital gains and dividends through business ownership have been the
greatest contributing factor to inequality (Hungerford 2011). There is no reason to think this would not be one
of the most significant contributors to inequality in other countries as well (for instance, the burgeoning
billionaires in Europe, Australia, China, Brazil, and India).

Figure 6: Feedback loops of accumulation and concentration of wealth. Two dashed lines across
an arrow indicates a delayed causation; a causal relationship that takes more time to play out
than the other relationships in the diagram.

Although competition is often thought to be one of the best ways to keep businesses from growing out
of proportion, there is an incentive for for-profit firms to grow big enough to not have to worry so much about
competition. Becoming large ensures survival and ongoing financial gain for owners. This growth-imperative
can easily lead to the concentration of market share in the hands of a relatively small number of firms 30 (Foster
2014). Larger firms also have significant advantages in the market. They are better able to profit from economies
of scale 31 and mergers and acquisitions of other companies, have high visibility to both consumers and
investors, and more investment due to greater levels of (perceived) profitability (Penrose and Pitelis 2009).
Big companies have more resources to improve the reach and quality of their marketing. Brand visibility
and familiarity can be enhanced via advertising, the shopping environment, product packaging, product
placement (including shelf-visibility, which has been linked to increasing impulsive shopping – Flamand et al.
2016), and on-the-spot promotion. All of these tactics make the brand more salient in consumers' minds (so-

28
'Capital gains' refers to profit made from the sell or trade of assets, such as stocks, bonds, and property.
29
'Business income' refers to income gained from owning a business or being a sole proprietor.
30 Penrose and Pentelis (2009). point out that there are two different ways to measure industrial or market concentration:

inequality of size distribution (that is, how many firms are small compared to large in the market - a relative measure) or
absolute concentration (how much of the total production, employment or assets is concentrated in just a few firms). I prefer
absolute concentration as measured by total production and assets, as the number of small firms can be misleading when it
comes to the concentration of wealth and power among a few giant firms.
31 Economies of scale refers to how large firms are often able to save costs due to efficiency gains.

Journal of Political Ecology Vol. 27, 2020 246

Hinton Fit for purpose? Clarifying the role of profit for sustainability

called "brand awareness" (Aaker 1996), increasing brand loyalty and influencing consumer decision-making
during the shopping experience (Huang and Sarigöllü 2012). Because consumers often buy products that they
already know (Huang and Sarigöllü 2012; Penrose and Pitelis 2009), it means that large companies will have a
significant competitive advantage in capturing market share. Increased market share can also have a positive
effect on further investment, because companies that have captured a large share of the market are perceived as
more steadily profitable by investors.
Not only are large firms typically more cost-efficient, powerful, and visible, but they can also create
barriers to entry for smaller firms. These barriers include the power of large firms over technology, raw
materials, special relationships with distributors, and the ability to threaten price wars (Penrose and Pitelis
2009). In this climate, it becomes ever-more difficult for smaller firms to compete and it is often in their interest
to sell out to big firms (Ibid).
Over time, without significant balancing factors, such a market will become increasingly concentrated
(as shown in Figure 7 32). The higher the concentration of the market, the more severe the effects of these
feedback loops are. These dynamics might explain the empirical evidence of the consolidation of the market in
the hands of fewer and fewer transnational firms, in most sectors of the global economy (e.g. Bajgar 2019;
Brancaccio et al. 2018; Folke et al. 2019). The OECD Employment Outlook 2018 describes it as "winner-takes-
most" dynamics: "the process through which the most productive firms capture an overwhelming share of the
market" (OECD 2018: 60). Especially notable is the trend in transnational mega-mergers and acquisitions, in
which two extremely large multinational companies merge (such as Bayer's acquisition of Monsanto and
Nestlé's partial acquisition of L'Oréal in recent years). In a profit-seeking system, these mega-corporations are
perceived as successful, despite the unsustainable dynamics that led them to that 'success' and allow them to
maintain it. Therefore, rather than being a key cause of economic growth, market concentration (along with
growth) is an outcome of the for-profit economy.
The high levels of market concentration are accompanied by the concentration of ownership, as seen in
the global data provided by Brancaccio et al. (2018) and Vitali et al. (2011); as well as the concentration of
wealth among a relatively small number of owners, as seen in the global data presented by Fuentes-Nieva and
Galasso (2014) and Alejo Vázquez Pimental et al. (2018). In other words, the richest owners own the biggest
companies, which are taking an ever-larger share of the market, making the richest owners even richer. 33 This
is what Karl Marx called the attraction of capital to capital (Foster 2014). If the above chain of logic is correct,
then it is no coincidence that the majority owners of the largest and oldest companies in the world are also
among the richest people in the world, as Kroll and Dolan show (2019).
As owners accumulate more wealth, inequality will rise unless workers' wages increase enough to let
them save at least at the same rate as the owners. However, because labor is a key factor of production for most
companies, it is also a key cost. That is why keeping wages low is seen as a cost-cutting strategy for companies
pursuing profit (Schnaiberg et al. 2002). When their goal is to generate returns on investment, it is rational for
companies to keep the wages of their employees as low as they can. This can be seen in the fact that wages in
middle- and low-income brackets have been declining or stagnating over the last few decades in many OECD
countries (OECD 2018. and the International Labour Organization says that 'wage stagnation characterizes the
global economy as a whole' (ILO 2016: 85).
Of course, wage suppression might be limited in places with strong trade unions or with strongly-
enforced minimum wage policies. Yet, it is also in the interest of profit-seeking owners to discourage union
membership (known as union busting. (Logan 2006; Royle 2008; Schnaiberg et al. 2002). And high-skilled
workers often have more success in negotiating better wages than low- and medium-skilled workers, who are
more easily seen by companies as replaceable. Globally, the high-skilled labor share of total global income

32
Note that this causal loop diagram is different from the diagram of the for-profit ideal type that has been developed in
preceding figures and that will be further developed in the following figures.
33Perhaps these mechanisms of concentration would not happen if everyone started on an even playing field. However, the
only way that could happen is if everyone were an owner and even then, some investments would be more profitable than
others, which would result in inequalities that lead to these dynamics over time (assuming investment is guided by
profitability).

Journal of Political Ecology Vol. 27, 2020 247

Hinton Fit for purpose? Clarifying the role of profit for sustainability

increased from 1995 - 2009, while that of middle- and low-skilled labor decreased during that same period (Dao
et al. 2017). Low- and middle-skilled labor composed the vast majority of hours worked in both emerging and
advanced economies, during that time (Ibid).

Figure 7: For-profit market concentration dynamics.

This situation, of increasing profits going to owners in parallel with stagnating wages, is common to
most countries (ILO 2016). Globally, labor's share of income has declined in seven of the ten major industries
tracked by the IMF: manufacturing, transportation, mining, health services, trade, financial services,
construction, and utilities (Dao et al. 2017). It has only increased in real estate, agriculture, and accommodation
(Ibid). According to mainstream economic thinking, competition between firms in the market is supposed to
keep wages high and prices low enough to maintain a fairly stable economy, but due to the market concentration
dynamics of the for-profit economy, this is not happening. As inequality rises, those in higher income brackets
have reason to be even more profit-motivated, in order to avoid the risk of falling into lower income brackets,
in which people are struggling much more to make ends meet (Wilkinson and Picket 2009; UBS 2015). Figure
8 illustrates the dual feedback loops of wage suppression and wealth accumulation that drive inequality.
Economic growth is often seen as the solution to poverty and inequality because it will provide more
jobs (e.g. World Bank 2016). However, the growth rate of the economy needs to be exceptionally high in order
to create enough jobs to counterbalance the inequality dynamics of the system (Magdoff and Foster 2011: 57-
58). And that kind of economic growth comes at a very high environmental cost.
Furthermore, economic growth does not always result in more jobs, because automation can often
increase profits by boosting efficiency and saving money on labor costs. Data collected by the OECD reflects
that this is indeed what is happening in much of the global economy (OECD 2018). Wages are growing at a
slower rate than production, because a growing amount of that production is being done by automation rather

Journal of Political Ecology Vol. 27, 2020 248

Hinton Fit for purpose? Clarifying the role of profit for sustainability

than workers (Ibid: 49). This can lead to a situation in which there are fewer jobs in the labor market for working
class households, even in a growing economy (Rotman 2013). 34

Figure 8: Inequality feedback loops.

Political capture
The above analysis implies a need for redistributive policies to balance out these negative consequences.
However, the redistribution of wealth (via taxes, for example) is at odds with the purpose of for-profit business
to achieve financial gain. Therefore, the wealthiest firms and individuals have an incentive to use their power
and influence to push for subsidies, lower taxes, and against environmental and labor-related regulations that
would cost their firms money (Schnaiberg et al. 2002). And in an increasingly globalized economy with high
levels of market concentration, they do just that, which in turn results in greater inequality, and another vicious
feedback loop (Phillips 2017).
In their 2014 report Working for the few: political capture and economic inequality, Fuentes-Nieva and
Galasso refer to this kind of illegitimate influence on policy-making as "political capture" and describe how
inequality has been leading to more political capture on the international stage (Fuentes-Nieva and Galasso
2014). The billions of dollars-worth of lobbying that is done on behalf of corporations can alter the agenda,
priorities, and problem-solving capacities of a government (Cave et al. 2015; Drutman 2015), and more
profitable firms lobby more (Sadrieh and Annavarjula 2005). Firms involved in lobbying and other forms of
political influence have annual revenue nearly four times higher, employee sizes over three times larger, and
annual assets worth nearly twice as much as non-politically active firms in the US (Kerr et al. 2014). These are
a small proportion of firms (between 6 and 10 percent, Ibid) with a large influence, which in turn gives them
added advantages in the market. Companies and industries can also have disproportionate influence on policy-
making via campaign contributions. For instance, the richest voters have a higher degree of influence on policy-
making than middle- and low-income voters (Bartels 2008; Gilens 2012; Gilens and Page 2014). Some firms
even participate in 'revolving doors', which refers to the act of placing industry associates in policy-making (or
policy-advising) positions (Vidal et al. 2012). This, in effect, allows an industry to regulate itself. 35

34
Increasing levels of household debt among low- and middle-income earners exacerbate these dynamics and might
undermine the economy in the long-term by inhibiting the levels of consumption needed to keep the economy growing
(Berisha and Meszaros 2018).
35 An extreme example of political capture happens in the form of Investor-State Dispute Settlements, which are written

into trade agreements, like the TransPacific Partnership and the North American Free Trade Agreement, in which businesses
can sue governments in private arbitration courts if they feel that a policy is having a negative impact on their profits (BEUC

Journal of Political Ecology Vol. 27, 2020 249

Hinton Fit for purpose? Clarifying the role of profit for sustainability

High net-worth companies and individuals can also use threats to move elsewhere in order to influence
policy in their favor. Examples of this include a large hedge fund threatening to leave Connecticut in response
to a planned surcharge on investment services (Fitch 2017) and wealthy French residents threatening to move
their money in response to the proposal for a 75% wealth tax (Alderman 2012). Powerful companies and owners
increasingly keep their money in tax havens to avoid paying taxes (Fuentes-Nieva and Galasso 2014). In
maintaining the wealth of the richest and keeping money from going to support the safety nets that governments
provide for their most vulnerable residents, tax havens further increase inequality. 36
In these ways, profit-motivated political capture counteracts policies that might otherwise have a
balancing effect on the unsustainable feedback loops of inequality and consumerism described above (Figure
9).

Figure 9: Feedback loops of political capture.

As this ideal type of the for-profit economy demonstrates, the purpose, investment, and ownership
structures of business have system-wide consequences. I claim that the for-profit economy generates the
following five patterns 37:

1) Profit-seeking both requires and drives growing levels of production and consumption (i.e.
economic expansion) in order to deliver increasing returns on investment to private owners. 38
2) More consumption and production undermines the planet's biosphere.
3) Inequality results, as owners accumulate returns and wages are suppressed in order to cut
business costs.

2014). These settlements have proven to be a very potent tool for industries and their leading firms to make sure that policies
are not detrimental to their profits (Sinclair 2015).
36 Work done by Galaz et al. (2018) also investigates the ecological damage that is indirectly related to tax havens.

37 Schnaiberg et al. (2002) refer to some of these dynamics in their article, The treadmill of production and the environmental

state.
38 For-profit economies experiencing little or no growth are considered to be in recession. In such a situation, returns to

owners decrease, wages are further suppressed to compensate for lost profits, tax income for the state decreases, and if this
goes on long enough, jobs also disappear, which exacerbates inequality.

Journal of Political Ecology Vol. 27, 2020 250

Hinton Fit for purpose? Clarifying the role of profit for sustainability

4) The goal of accumulating wealth encourages aggressive growth strategies among firms in
order to reduce competition, which leads to increasing market concentration over time.
5) Owners' desire for financial gain in a context of inequality leads to political capture, which
inhibits regulations and taxes that might otherwise reduce inequality and ecological damage.

If these points hold, then consumerism, economic growth, inequality, and the tendency to destroy the
natural environment are inherent features of a for-profit economy. Therefore, poor social and ecological
outcomes are not anomalies, market failures, or externalities that just need to be internalized in the for-profit
economy. Rather, they are logical outcomes of profit-seeking strategies in a profit-driven economy. It is
therefore difficult to imagine a socially and ecologically sustainable for-profit economy, because the very
policies that could be used to make it sustainable are at odds with a key institution of the system: the desire for
financial gain. Figure 10 highlights the problematic dynamics of this ideal type of economy.

Figure 10: The three vicious cycles of the for-profit economy.

4. What about a dual-purpose economy?

In a growing response to inequality and ecological crises, many businesses are broadening their scope,
by adding social and environmental goals to their profit-seeking purpose. Businesses can work toward social
benefit goals either by using their resources to undertake socially beneficial activities themselves, or they can
fund other organizations that focus on social benefit. This funding can come from the investment streams or
profits of a business. The business can form a partnership with an NGO or charity that does socially beneficial
work (Lodsgård and Aagaard 2017). Or they can undertake corporate social responsibility (CSR) schemes and
corporate philanthropy (Kotler and Lee 2004). Some businesses add social and environmental accounting to
their financial accounting, using tools such as those developed by Economy for the Common Good (2018) and
B Corps (2018).

Journal of Political Ecology Vol. 27, 2020 251

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Others go so far as to use a dual-purpose legal framework, such as the Benefit Corporation in the US or
the Community Interest Company limited by shares in the UK (Mair et al. 2006; Reiser and Dean 2017). 39 In
these dual-purpose businesses (sometimes called 'hybrid businesses'), there are two main sources of motivation
for investment: financial gain and social benefit (sometimes called the 'double dividend'). These firms are still
for-profit, in terms of their legal framework, but have decided to operate with a dual purpose. As such, private
owners have financial rights and can receive dividends from the firm's profit, but it is expected that some profit
also goes to social benefit, or that some profit is foregone in order to achieve social benefit (Reiser and Dean
2017).
The businesses described above can be described as 'triple bottom line' companies that seek to balance
"people, planet, and profit" (Elkington 1994). The scant literature that does address business from a post-growth
perspective tends to take this triple bottom line approach (e.g. Bocken and Short 2016; Khmara and Kronenberg
2018; Schaeffer et al. 2015). The economic model of these businesses uses the same dynamics seen in the for-
profit ideal type of economy, but slowed down by the socially- and environmentally-beneficial work being
done, as well as the flow of that portion of profit into social benefit instead of into owners' hands. To the extent
that social benefit is being pursued and achieved by hybrid businesses, we can expect to see balancing feedback
loops that slow down the destructive dynamics of the for-profit economy, as shown in Figure 11. 40

Figure 11: Key dynamics of the hybrid economy.

A large percentage of investment would have to be put into social benefit efforts in order to counteract
the vicious cycles of consumerism, wage stagnation, and the concentration of wealth among owners that are

39 Some such legal frameworks have a distribution cap, which means that only some stated percentage of the profit can be
distributed to owners and the rest must be reinvested in the social purpose or back into the business.
40 The dynamics of the for-profit economy have been simplified in this diagram in order to more clearly show the changes

that come with the addition of social purpose.

Journal of Political Ecology Vol. 27, 2020 252

Hinton Fit for purpose? Clarifying the role of profit for sustainability

features of a profit-seeking economy, much less to reverse inequality and regenerate ecosystems on a global
scale (which is what is currently needed). For the same reasons that we see political capture in a for-profit
economy, it is unlikely that most profit-motivated companies and their owners would want to make that kind
of investment. This would explain why, despite a large-scale mobilization of businesses taking on social benefit
missions over the past few decades, we continue to see worsening inequality in most of the world, in terms of
interpersonal, inter-country, and intra-country inequality 41 (Hickel 2017) and increasing rates of global
environmental damage (Ekins et al. 2019).
Tradeoffs between social benefit and financial gain for owners are a constant part of decision-making
in these firms. There is only so much revenue and profit that is generated each financial year for any given firm
or market. It follows that transferring a higher percentage of the profit to owners means that a smaller percentage
is available for social benefit, and vice-versa. 42 Therefore, such companies want to invest enough in social
benefit to pursue a dual purpose, but not enough to negatively impact their profits. Of course, some profit might
be made up for by passing the social investment costs onto the consumer, by raising prices, or to workers, by
reducing wages (Reinhardt et al. 2008). However, this means that consumers or workers are paying for social
benefit, rather than reducing the accumulation of profit by owners. In such cases, the social benefit activities
lack much of a counterbalancing effect, if any, on the inequality dynamics of the economy.

5. Not-for-profit business as a key element of post-growth transformations?

What might the dynamics of a not-for-profit economy, composed of businesses that exist only to deliver
social benefit, look like?
Let us start with inequality. As mentioned earlier, private financial rights and equity-based investment
are not permitted in the NFP legal framework. This would eliminate the loop of owners getting richer from
unlimited returns on investment that drives many destructive system dynamics in the for-profit economy
discussed above (Hinton and Maclurcan 2016). Additionally, there is no reason to think that the purpose,
investment, and ownership structures of NFP orientation would incentivize businesses to suppress wages.
Instead, the NFP framework encourages businesses to maintain fair wages. Empirical evidence shows that NFPs
have better pay equity than FP counterparts (Ben-Ner et al. 2011; Leete 2000). There is better equality in an
economy in which a large portion of businesses exist to help disadvantaged people, in which there is no
incentive to suppress wages, and in which there are no private owners to take profits.
One potential source of inequality in such an economy is debt-based investment. However, the limited
nature of returns on debt-based investment would lead to less inequality than the unlimited returns on the equity-
based investment of the FP economy. Furthermore, all banks and lending institutions in this ideal type are not-
for-profit, so most debts and interest are repaid to NFPs, which then put profit into social benefit. Therefore,
debt-based investment in the NFP economy does not contribute to inequality as in the FP context, in which
some portion of bank profits is paid to private owners and, propelled by the profit motive, some lenders charge
exploitative interest rates. Yet, there is still a risk for debt-based investment from private individuals to create
inequality in the NFP economy. Another potential source of inequality is wage suppression. Although there is
not the same incentive to suppress wages as in FP forms of business, NFP frameworks do not necessarily ensure
fair pay for labor.
There might also still be a tendency towards market concentration, as it could be natural to invest in
larger, more visible NFP companies. However, market concentration in the NFP economy would likely not be
the result of aggressive growth strategies in order to dominate the market. Indeed, there is some evidence of a
tendency to cooperate among NFPs (Hinton and Maclurcan 2016: 156-158).
In terms of political capture, NFP firms might have a drive to grow larger or to lobby for subsidies or
favorable policies in order to better achieve their missions, but there is no direct and obvious reason that they
would want to stifle the effectiveness of redistributive taxes or labor and environmental regulations.
Furthermore, not-for-profit businesses have three layers of accountability to ensure that they use their resources

41
With the exception of China and some of East Asia (Hickel 2017).
42
This has been referred to as "sacrificing profits in the social interest" (Elhauge 2005).

Journal of Political Ecology Vol. 27, 2020 253

Hinton Fit for purpose? Clarifying the role of profit for sustainability

for generating social good: legal authorities, the tax agency, their board, their customers and beneficiaries, and
the wider community (James and Rose-Ackerman 1986; Reiser and Dean 2017; Salamon 2010). Thus, they can
be held accountable through social pressure, consumer preferences, and legal institutions (including the tax
agency and justice system). Whereas many FP firms are explicitly started for a financial gain purpose, so it is
difficult to hold them accountable for contributing to social and environmental wellbeing. This is particularly
difficult to do when it comes to hybrid firms. How much social benefit versus private financial gain should be
expected by the various stakeholders? What happens if different stakeholders' expectations do not match up
(e.g. those of owners and beneficiaries)?
The NFP economy could potentially have the reinforcing feedback loop of consumerism, identified
above. There is no reason to think that the NFP economy would necessarily lead to less consumerism. Yet, it
does not have the same built-in pressure to sell more items in order to deliver profit to owners. For this reason,
it is questionable whether planned obsolescence would be a trend in an NFP economy.
Another key difference is that there are balancing effects in the NFP economy due to the social benefit
nature of these businesses (as shown in Figure 12). The greater the magnitude of social and ecological problems,
the more a desire for social benefit motivates community members to invest in resolving these issues. For
instance, if there is a high level of drug abuse, resources are invested into rehabilitation programs. If there is
wild species' habitat destruction, resources are invested into protecting and rehabilitating ecosystems. As
habitats recover and as drug abuse wanes, fewer resources are directed into these areas, because there is less of
a need. In this way, money goes to where it is most needed in order to provide for social and ecological health,
because there is no underlying goal to accumulate private wealth. Large parts of the market can become a social
safety net for disadvantaged segments of the population (Hinton and Maclurcan 2016).

Figure 12: Key dynamics of the not-for-profit economy.

In this section of the analysis, I have argued that a not-for-profit 'ideal type' economy might include
consumerism, but lacks the inequality and political capture feedback loops of the FP economy. It also generates
the following four patterns:

Journal of Political Ecology Vol. 27, 2020 254

Hinton Fit for purpose? Clarifying the role of profit for sustainability

1) The desire for social benefit promotes investment in businesses and organizations that use
their activities and all of their profit for social and/or environmental missions.
2) There are relatively high levels of economic equality, due to the lack of private financial
rights; more equal pay differentials; a large part of the economy doing social work that helps
disadvantaged people; and the absence of political capture for private gain.
3) Redistributive taxes, environmental regulations, and labor-friendly regulations can be more
effective in the absence of systemic political capture.
4) Investment is responsive to social and environmental problems and when there are fewer
problems, there is less investment.

6. Discussion
What insights can be gained from comparing the ideal types presented above? One that emerges is that
the NFP economy contrasts so starkly to the FP economy largely in terms of what it does not do. This has very
important implications for post-growth transitions, when it comes to dealing with factors that keep the economy
locked into growth-based pathways. The absence of destructive feedback loops in the NFP economy better
allows for most policies and actions advocated by post-growth theorists, such as work time reduction, re-
localization, alternative measures of wellbeing, redistributive policies, and resource and pollution caps. Let us
take the example of a core post-growth intervention: the shift to less materially-intensive lifestyles, also called
voluntary simplicity or down-shifting (Alexander 2015).
Despite environmentalists' call for more minimalist lifestyles for several decades (e.g. reduce, reuse,
recycle), most businesses in the FP economy have continued to contribute to a culture of consumerism. One
can imagine that if businesses in an NFP economy get the signal that consumerism is bad for people and planet,
then they would not continue to push people to consume goods and services, just for the sake of increasing sales
and profit. This would allow for a post-consumerist society to emerge. If needed, environmental regulations
and taxes could also put pressure on firms to adjust their strategies, and on people to live more minimalist
lifestyles, with a lot less resistance than in an FP economy. Figure 13 shows how the minimalist lifestyle
intervention could fit within the NFP economy, generating yet another balancing effect on the system.
Likewise, the NFP ideal type allows for a non-growing or degrowing economy, whereas it is difficult to
imagine a non-growing FP economy. Without the vicious cycle of consumerism driven by the profit motive,
there could be space for people to meet more of their needs in non-monetary ways; for instance, through greater
connection with their communities and nature, and having more time to themselves. 43
Higher levels of economic equality would mean there is greater ability to ensure that only socially-
beneficial and ecologically-sustainable products and services are on the market. In an economy without a high
level of pressure to consume for consumption's sake, people would likely not buy as many things (Kasser and
Kanner 2004; Schor 2004) and in a context of more economic equality, individuals do not need to work as much
to make ends meet. 44 This means that they can better afford to pay prices that cover socially-and
environmentally-responsible production (which further ensures higher levels of equality, in a virtuous feedback
loop).
In positioning investment, strategy, and profit in service of social benefit, rather than in service of private
financial gain, NFP business transforms the mandate of business, as opposed to broadening it (as hybrid
businesses do). When businesses are motivated to generate financial gain for owners, they can very easily run
into situations in which their strategies sacrifice social and ecological wellbeing for profit. Broadening the aims
of business does not address such tradeoffs, whereas transforming the aims of business to focus solely on social
benefit can.

43 When referring to meeting needs, I suggest Max-Neef et al.'s (1991) framework of needs and satisfiers, which

conceptualizes satisfiers of needs as infinite and contextual, but identify nine universal needs that every person has,
regardless of context: subsistence, affection, protection, understanding, participation, leisure, identity, freedom, and
creativity. Money and consumption can help meet these needs only to a limited extent.
44 These dynamics are outlined in more detail in Hinton and Maclurcan (2016: 170-181).

Journal of Political Ecology Vol. 27, 2020 255

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Figure 13: A not-for-profit economy with minimalist lifestyle interventions.

That said, the NFP economy is not perfect. It has the potential for consumerism, economic growth,
market concentration, socially-focused activities that do environmental damage, and some level of inequality
due to debt-based investment and the potential for high salaries (albeit much less than the inequality produced
by the unlimited returns on investment and bonuses from profits that owners and managers can receive in the
FP economy).
In this light, the NFP economy is best seen as necessary, but not sufficient, for a healthy post-growth
economy. Many post-growth theorists advocate that businesses must be environmentally friendly, democratic,
local, and small (e.g. Khmara and Kronenberg 2018; Latouche 2006; Liesen et al. 2015). Not-for-profit
businesses tend to be smaller and more local than their FP counterparts (James and Rose-Ackerman 1986) but
aren't necessarily local and small. Nor are they necessarily environmentally conscious and democratic.
Therefore, a sustainable NFP economy would need strong institutions that push for environmental justice, re-
localization, and democratic management of business. The ethos of NFP frameworks aligns with such
initiatives.

7. Conclusions
The current economic system is quickly eroding the resilience of ecosystems, as well as the resilience
of local biosphere stewardship, around the world. Common explanations for these global trends, such as market
failures, externalities, weak regulation, and a lack of information, do not match the scale of the phenomena. If
market failures and weak regulation are so widespread and leading to so much damage, there must be an
underlying systemic problem. The main contribution of this article to the field of political ecology is a more
clear, robust, and coherent explanation of the core economic structures and dynamics that give rise to global
patterns of social and ecological exploitation. In this way, it responds to the need articulated in the book, Global
political ecology, to "sort through the causes of environmental crises and clearly evaluate the kinds of political-
economic transformations necessary for reaching ecological sanity" (Peet et al. 2011: xiii).

Journal of Political Ecology Vol. 27, 2020 256

Hinton Fit for purpose? Clarifying the role of profit for sustainability

The above analysis shows that a number of unsustainable dynamics including consumerism, economic
growth, ecological damage, economic inequality, and political capture, are driven by the for-profit nature of
firms. Hybrid types of business might be able to slow down the destructive tendencies of the for-profit system,
but do not stop them. However, a not-for-profit economy lacks such systemic tendencies toward consumerism,
economic growth, inequality, and political capture. The latter type of economy would also likely be more
compatible with sustainability interventions.
This article also clarifies that in post-growth economics, the microeconomics of business and the
macroeconomics of economic growth cannot be treated separately. The macro-level phenomena of ecological
degradation, economic growth, and economic inequality are heavily impacted by businesses' relationship-to-
profit and business behavior is very much shaped by these macro trends, as political ecologists recognize. This
is a major shift from the traditional ways of thinking about economies – even in heterodox schools of thought,
such as ecological economics.
In conceptualizing relationship-to-profit and analyzing how this aspect of business plays out at a larger
scale, this article clarifies the role of profit in post-growth transformations. Relationship-to-profit implies
different sets of rights and obligations that guide and constrain business in legally enforceable ways. For-profit
business structures do not require that managers and owners pursue profit as a main aim, however because they
can, many actors do, and they are able to concentrate wealth and power in doing so. This can more easily result
in a 'race to the bottom' in terms of ecological devastation and inequality. In such a system, the actors that do
not aggressively pursue profit are at risk of being either outcompeted, or bought out. As such, it is the legal
openness of for-profit frameworks to pursuing profit for unlimited private financial gain that is a key driver of
problematic dynamics, and a key barrier to post-growth transformations.
In order to test some of the claims made in this analysis, there is a need to gather more knowledge about
not-for-profit business, as an economic entity distinct from both for-profit business and donation-dependent
nonprofit organizations. It is my hope that the conceptual models in this article inspire the formation of new
research questions and data collection, as well as sparking discussion about the role of relationship-to-profit in
generating and transforming current sustainability crises. There can be no departure from the growth-based
economy without a change to this fundamental aspect of business.

References
Aaker, D. 1996. Measuring brand equity across products and markets. California Management Review 38(3):
102-120.
Alderman, L. 2012. Indigestion for 'les Riches' in a plan for higher taxes. The New York Times, August 7.
Accessed online on May 15, 2019: https://www.nytimes.com/2012/08/08/business/global/frances-les-
riches-vow-to-leave-if-75-tax-rate-is-passed.html
Alejo Vázquez Pimental, D., I. Macías Aymar and M. Lawson. 2018. Reward work, not wealth: to end the
inequality crisis, we must build an economy for ordinary working people, not the rich and powerful.
Oxford, UK: Oxfam GB.
Alexander, S. 2015. Sufficiency economy: enough for everyone, forever. Melbourne: Simplicity Institute.
Austin, L. and R. Williams. 2015. Composition of income reported on tax returns in 2012. Tax Notes, Tax
Policy Center website. Accessed online on July 5, 2019:
https://www.taxpolicycenter.org/publications/composition-income-reported-tax-returns-2012/full
B Corps 2018. What are B Corps? B Corps website. Accessed online on June 26, 2018:
https://www.bcorporation.net/what-are-b-corps
Bajgar, M., G. Berlingieri, S. Calligaris, C. Criscuolo and J. Timmis. 2019. Industry concentration in Europe
and North America. OECD Productivity Working Papers 18. Paris: OECD.
Bartels, L.M. 2008. Unequal democracy: the political economy of the new gilded age. Princeton, NJ: Princeton
University Press.
Ben-Ner, A., T. Ren and D.F. Paulson. 2011. A sectoral comparison of wage levels and wage inequality in
human services industries Nonprofit and Voluntary Sector Quarterly 40(4): 608-633.

Journal of Political Ecology Vol. 27, 2020 257

Hinton Fit for purpose? Clarifying the role of profit for sustainability

BEUC (The European Consumer Organisation). 2014. TTIP – Investment protection and ISDS: BEUC response
to the European Commission's Public Consultation. Brussels: BEUC.
Berisha, E. and J. Meszaros. 2018. Household debt, consumption, and income inequality. International
Economic Journal 32(2): 161-176.
Bocken, N.M.P. and S.W. Short. 2016. Towards a sufficiency-driven model. Environmental Innovation and
Societal Transitions 18: 41-61.
Borzaga, C. and E. Tortia. 2007. Social economy organisations in the theory of the firm. In Social economy:
building inclusive economies. Paris: OECD.
Boyte-White, C. 2018. What is the difference between revenue and profit? Investopedia website. Accessed
online on July 2, 2018: https://www.investopedia.com/ask/answers/122214/what-difference-between-
revenue-and-profit.asp
Brancaccio, E., R. Giammetti, M. Lopreite and M. Puliga. 2018. Centralization of capital and financial crisis: a
global network analysis of corporate control. Structural Change and Economic Dynamics 45: 94-104.
Brierley, S. 2005. The advertising handbook, 2nd ed. London: Routledge.
Capgemini 2018. World Wealth Report 2018. Capgemini website. Accessed online July 5, 2019:
https://www.capgemini.com/ch-de/wp-content/uploads/sites/26/2018/06/Capgemini-World-Wealth-
Report-19.pdf
Cave, T., A. Rowell and C. Rowell. 2015. A quiet word: lobbying, crony capitalism and broken politics in
Britain. London: Random House.
Cooper, T. 2004. Inadequate life? Evidence of consumer attitudes to product obsolescence. Journal of
Consumer Policy 27(4): 421-449.
Cooper, T. 2005. Slower consumption reflections on product life spans and the 'throwaway society. Journal of
Industrial Ecology 9(12): 51-67.
Daly, H.E. 1996. Beyond growth: the economics of sustainable development. Boston: Beacon Press.
Dao, M.C., M. Das, Z. Koczan and W. Lian. 2017. Why is labor receiving a smaller share of global income?
Theory and empirical evidence. IMF Working Paper WP/17/169. Washington DC: International
Monetary Fund.
Dittmar, H., R. Bond, M. Hurst and T. Kasser. 2014. The relationship between materialism and personal well-
being: a meta-analysis. Journal of Personality and Social Psychology 107(5): 879-924.
Drutman, L. 2015. The business of America is lobbying: how corporations became politicized and politics
became more corporate. Oxford: Oxford University Press.
Economy for the Common Good. 2018. Common Good Matrix page, Economy for the Common Good website.
Accessed online on June 26, 2018. https://www.ecogood.org/en/common-good-balance-sheet/common-
good-matrix/
Ekins, P., J. Gupta and P. Boileau. 2019. Global Environment Outlook GEO-6: healthy planet, healthy people.
Cambridge: Cambridge University Press.
Elhauge, E. 2005. Corporate managers operational discretion to sacrifice corporate profits in the public interest.
In Hay, B., R. Stavins and R. Vietor (eds.). Environmental protection and the social responsibility of
firms. Washington, DC: Resources for the Future.
Elkington, J. 1994. Towards the sustainable corporation: win-win-win business strategies for sustainable
development. California Management Review 36: 90-100.
Fitch, M. 2017. Hedge funds threaten to leave Connecticut over surcharge. Yankee Institute for Public Policy
April 12. Accessed May 15, 2019: https://yankeeinstitute.org/2017/04/12/hedge-funds-threaten-to-
leave-connecticut-over-surcharge
Flamand, T., A. Ghoniem and B. Maddah. 2016. Promoting impulse buying by allocating retail shelf space to
grouped product categories. Journal of the Operational Research Society 67: 953-969.
Folke, C., H. Österblom, J.B. Jouffray, E.F. Lambin, W.N. Adger, M. Scheffer, B.I. Crona, M. Nyström, S.A.
Levin, S.R. Carpenter, J.M. Anderies, S. Chapin III, A.S. Crépin, A. Dauriach, V. Galaz, L.J. Gordon,

Journal of Political Ecology Vol. 27, 2020 258

Hinton Fit for purpose? Clarifying the role of profit for sustainability

N. Kautsky, B.H. Walker, J.R. Watson, J. Wilen and A. de Zeeuw. 2019. Transnational corporations and
the challenge of biosphere stewardship. Nature Ecology and Evolution 3: 1396-1403.
Foster, J.B. 2014. Theory of monopoly capitalism: an elaboration of Marxian political economy. New York:
Monthly Review Press.
Fuentes-Nieva, R. and Galasso, N. 2014. Working for the few: political capture and economic inequality.
Oxford: Oxfam GB.
Galaz, V., B. Crona, A. Dauriach, J-B. Jouffray, H. Österblom and J. Fichtner. 2018. Tax havens and global
environmental degradation. Nature Ecology and Evolution 2: 1352-1357. correction
Gebauer, J. 2018. Towards growth-independent and post-growth-oriented entrepreneurship in the SME sector.
Management Revue 29(3): 230-256.
Georgescu-Roegen, N. 1971. The entropy law and the economic process. Cambridge, MA: Harvard University
Press.
Gilens, M. 2012. Affluence and influence: economic inequality and political power in America. Princeton,
NJ/New York: Princeton University Press/Russell Sage Fund.
Gilens, M. and B.I. Page. 2014. Testing theories of American politics: elites, interest groups, and average
citizens. Perspectives on Politics 12: 564-581.
Grossman, S.J. and O.D. Hart. 1986. The costs and benefits of ownership: a theory of vertical and lateral
integration, Journal of Political Economy 94(4): 691-719.
Guiltinan, J. 2009. Creative destruction and destructive creations: environmental ethics and planned
obsolescence. Journal of Business Ethics 89: 19-28.
Hickel, J. 2017. Is global inequality getting better or worse? A critique of the World Bank's convergence
narrative. Third World Quarterly 38(10): 2208-2222.
Hickel, J. and G. Kallis. 2019. Is green growth possible? New Political Economy
http://doi.org/10.1080/13563467.2019.1598964
Hillman, J., S. Axon and J. Morrissey. 2018. Social enterprise as a potential niche innovation breakout for low
carbon transition. Energy Policy 117: 445-456.
Hinton, J. and Maclurcan, D. 2016. How on Earth: flourishing in a not-for-profit world by 2050 (draft) Ashland,
OR: Post Growth Publishing. Available online: https://arxiv.org/pdf/1902.01398.pdf
Hinton, J. and D. Maclurcan. 2017. A not-for-profit world beyond capitalism and economic growth? Ephemera:
Theory and Politics in Organization 17(1): 147-166.
Hornborg, A. 2017. How to turn an ocean liner: a proposal for voluntary degrowth by redesigning money for
sustainability, justice, and resilience. Journal of Political Ecology 24: 623-632.
Huang, R. and E. Sarigöllü. 2012. How brand awareness relates to market outcome, brand equity, and the
marketing mix. Journal of Business Research 65: 92-99.
Hungerford, T.L. 2011. Changes in income inequality among U.S. tax filers between 1991 and 2006: the role
of wages, capital income. Washington, D.C.: Congressional Research Service.
ICNL (International Center for Not-for-Profit Law). 2013. Frequently Asked Questions page, ICNL website.
Accessed June 10, 2019. http://www.icnl.org/contact/faq/index.html
ILO. 2016. Global Wage Report 2016/17: wage inequality in the workplace. Geneva: International Labour
Organisation.
Jackson, T. 2009. Prosperity without growth: economics for a finite planet. London: Routledge.
Jackson, T. 2017. Prosperity without growth: foundations for the economy of tomorrow. London: Routledge.
James, E. and S. Rose-Ackerman. 1986. The nonprofit enterprise in market economics. New York: Harwood
Academic.
Johanisova N., T. Crabtree and E. Franková. 2013. Social enterprises and non-market capitals: a path to
degrowth? Journal of Cleaner Production 38: 7-16.
Jones, C.I. 2018. Macroeconomics, international student edition – 4th ed. New York: W.W. Norton and Co.

Journal of Political Ecology Vol. 27, 2020 259

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Kallis, G. 2018. Degrowth. Newcastle Upon Tyne: Agenda Publishing.

Kasser, T. and A.D. Kanner (eds.) 2004. Psychology and consumer culture: the struggle for a good life in a
materialistic world. Washington, D.C.: American Psychological Association.
Kerr, W.R., W.F. Lincoln and P. Mishra. 2014. The dynamics of firm lobbying. American Economic Journal:
Economic Policy 6(4): 343–379.
Khaleeli, H. 2015. End of the line for stuff that's built to die? The Guardian, March 3. Accessed online July 2,
2019: https://www.theguardian.com/technology/shortcuts/2015/mar/03/has-planned-obsolesence-had-
its-day-design
Khmara, Y. and J. Kronenberg. 2018. Degrowth in business: an oxymoron or a viable business model for
sustainability? Journal of Cleaner Production 177: 721-731.
Knight, F. 1921. Risk, uncertainty, and profit. New York: Houghton Mifflin.
Korten, D. 2001. When corporations rule the world. Oakland, CA: Berret-Koehler.
Kotler, P. and N. Lee. 2004. Corporate social responsibility: doing the most good for your company and your
cause. New York: Wiley.
Kroll, L. and K.A. Dolan. 2019. Billionaires: the richest people in the world. Forbes Magazine website, March
5. Accessed July 1, 2019: https://www.forbes.com/billionaires/#37b397c7251c
Krugman, P. and R. Wells. 2018. Microeconomics, 5th ed. New York: Worth.
Kuppelwieser, V.G., P. Klaus, A. Manthiou and O. Boujena. 2019. Consumer responses to planned
obsolescence. Journal of Retailing and Consumer Services 47: 157-165.
Latouche S. 2006. Le pari de la décroissance. Paris: Fayard.
Lazonick, W. 2018. The functions of the stock market and the fallacies of shareholder value. In Driver, C. and
G. Thompson. (eds.). Corporate governance in contention. Oxford: Oxford University Press. Pp. 117-
151.
Leete, L. 2000. Wage equity and employee motivation in nonprofit and for-profit organizations. Journal of
Economic Behavior and Organization 43(4): 423-446.
Liesen A., C. Dietsche and J. Gebauer. 2015. Successful non-growing companies. Research Paper Series
n°25/15. St. Gallen: Humanistic Management Network.
Lodsgård, L. and A. Aagaard. 2017. Creating value through CSR across company functions and NGO
collaborations. Scandinavian Journal of Management 33(3): 162-174.
Logan, J. 2006. The union avoidance industry in the United States. British Journal of Industrial Relations 44(4):
651-675.
Magdoff, F. and J.B. Foster, J.B. 2011. What every environmentalist needs to know about capitalism. New
York: Monthly Review Press.
Mair, J., J. Robinson and K. Hockerts. (eds.). 2006. Social entrepreneurship. New York: Palgrave Macmillan.
Max-Neef, M., A. Elizalde and M. Hopenhayn. 1991. Human scale development: conception, application and
further reflections. Uppsala: Dag Hammarskjöld Foundation, Apex Press.
OECD. 2018. OECD Employment Outlook 2018. Paris: OECD.
Ojong, N. 2015. Social finance for social economy. Employment working paper. International Labour Office,
Employment Sector, Social Finance Programme. Geneva: ILO.
Paech, N. 2014. Scenarios for a Post-Growth Economy, lecture recorded at the Fourth International Degrowth
Conference, Leipzig, Germany. Accessed December 1, 2019:
https://www.youtube.com/watch?v=rS3ldLZ_kYE
Palmiter, A.R. 2003. Ownership interests – bundle of rights. In Law and valuation: financial valuation in legal
contexts. Wake Forest University, School of Law website. Accessed June 10, 2019.
https://users.wfu.edu/palmitar/LawandValuation/chapter%205/5-4-1.htm

Journal of Political Ecology Vol. 27, 2020 260

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Parrique, T., J. Barth, F. Briens, C. Kerschner, A. Kraus-Polk, A. Kuakkanen and J.H. Spangenberg. 2019.
Decoupling debunked: evidence and arguments against green growth as a sole strategy for
sustainability. Brussels: European Environmental Bureau.
Paulson, S. 2017. Degrowth: culture, power and change. Journal of Political Ecology 24: 425-448.
Peet, R., P. Robbins and M.J. Watts (eds.). 2011. Global political ecology. London: Routledge.
Penrose, E. and C. Pitelis. 2009. The growth of the firm. 4th ed. Oxford: Oxford University Press.
Phillips, N. 2017. Power and inequality in the global political economy. International Affairs 93(2): 429-444.
Piketty, T. 2014. Capital in the 21st Century. Cambridge, MA: Belknap Press.
Pope, K. 2017. Understanding planned obsolescence: unsustainability through production, consumption and
waste generation. London: Kogan Page.
Raworth, K. 2017. Doughnut economics: seven ways to think like a 21st century economist. London: Random
House.
Reinhardt, F.L., R.N. Stavins and R.H.K. Vietor 2008. Corporate Social Responsibility through an economic
lens. Review of Environmental Economics and Policy 2(2): 219-239.
Reiser, D.B. and S.A. Dean, 2017. Social enterprise law: trust, public benefit and capital markets. Oxford:
Oxford University Press.
Richters, O. and A. Siemoneit. 2017. Fear of stagnation? A review of growth imperatives. VÖÖ Discussion
Paper No. 6/2017. Heidelberg: Vereinigung für Ökologische Ökonomie.
Rivera, J.L. and A. Lallmahomed. 2016. Environmental implications of planned obsolescence and product
lifetime: a literature review. International Journal of Sustainable Engineering 9(2): 119-129.
Roeger, K., A. Blackwood and S. Pettijohn. 2012. Nonprofit Almanac 2012. Washington, D.C.: Urban Institute
Press.
Rotman, D. 2013. How technology is destroying jobs. MIT Technology Review, July/August. Accessed July 1,
2019: https://www.technologyreview.com/s/515926/how-technology-is-destroying-jobs/
Royle, T. 2008. Just vote no! Union-busting in the European fast-food industry: the case of McDonalds,
Industrial Relations Journal, 33(3): 262-278.
Sadrieh, F. and M. Annavarjula. 2005. Firm-specific determinants of corporate lobbying participation and
intensity. International Journal of Public Administration 28: 1-2, 179-202.
Salamon, L. M. and H.K. Anheier. 1997. Defining the nonprofit sector: a cross-national analysis. Manchester:
Manchester University Press.
Salamon, L.M. 2010. Putting the civil society sector on the economic map of the world. Annals of Public and
Cooperative Economics 81(2): 167-210.
Salamon, L.M., S.W. Sokolowski, M.A. Haddock and H.S. Tice. 2013. The state of global civil society and
volunteering: latest findings from the implementation of the UN nonprofit handbook. Working Paper no.
49. Baltimore: Johns Hopkins Center for Civil Society Studies.
Schaefer, K., P.D. Corner and K. Kearins. 2015. Social, environmental and sustainable entrepreneurship
research: what is needed for sustainability-as-flourishing? Organization and Environment 28(4): 394-
413.
Schnaiberg, A., D. Pellow and A. Weinberg. 2002. The treadmill of production and the environmental state. In
Mol, A. and F. Buttel. (eds.). The environmental state under pressure. Bingley: Emerald. Pp. 15-32.
Schor, J. 2004. Born to buy: the commercialized child and the new consumer culture. New York: Scribner.
Sinclair, S. 2015. NAFTA Chapter 11 investor-state disputes. Canadian Centre for Policy Alternatives website.
Accessed July 5, 2019. https://tiny.cc/txtlmz
Steffen, W., W. Broadgate, L. Deutch, O. Gaffney and C. Ludwig. 2015. The trajectory of the Anthropocene:
the great acceleration. The Anthropocene Review. 2(1): 81-98.
Stein, B. 1976. Collective ownership, property rights, and control of the corporation Journal of Economic Issues
X(2): 298-313.

Journal of Political Ecology Vol. 27, 2020 261

Hinton Fit for purpose? Clarifying the role of profit for sustainability

Trainer, T. 2019. Entering the era of limits and scarcity: the radical implications for social theory. Journal of
Political Ecology 26: 1-18.
UBS (Union Bank of Switzerland). 2015. When is enough…enough? Why the wealthy can't get off the
treadmill. UBS Investor Watch, 11th edition. Zurich: Union Bank of Switzerland.
Upward, A. and P. Jones. 2016. An ontology for strongly sustainable business models: defining an enterprise
framework compatible with natural and social science. Organization and Environment 29(1): 97-123.
Varey, R.J. 2010. Marketing means and ends for a sustainable society: a welfare agenda for transformative
change. Journal of Macromarketing 30(2): 112-126.
Victor, P. 2008. Managing without growth. Cheltenham: Edward Elgar.
Vidal, J.B.I, M. Draca, and C. Fons-Rosen. 2012. Revolving door lobbyists. American Economic Review
102(7): 3731-3748.
Vitali, S., J.B. Glattfelder and S. Battiston. 2011. The network of global corporate control. PLoS ONE 6(10):
e25995.
Walker, P. 2017. The theory of the firm: an overview of the economic mainstream. London: Routledge.
Wilkinson, R.G. and K. Pickett. 2009. The spirit level: why greater equality makes societies stronger. New
York : Bloomsbury Press.
World Bank 2016. Taking on inequality: poverty and shared prosperity. Washington, D.C.: The World Bank
Group.
Young, D.W. 1982. Nonprofits need surplus too. Harvard Business Review 60(1): 124-131.

Journal of Political Ecology Vol. 27, 2020 262

Paper 4: Dimensions of Business
 Five Key Dimensions of Post-Growth Business:
Putting the Pieces Together*

Jennifer B. Hinton1,2

1
Stockholm Resilience Centre, Stockholm University, Stockholm, Sweden
2
Centre for Studies and Research in International Development, Université Clermont-
Auvergne, Clermont-Ferrand, France
Email: Jennifer.hinton@su.se
*
Revised and resubmitted to Futures on November 9, 2020
Funding is acknowledged from the Marie Sklodowska Curie Fellowship Action in Excellent
Research (grant agreement no. 675153).

Abstract

As there has been no evidence of the kind of environmental decoupling necessary to

allow for green economic growth, academic and activist discussions alike have turned to
exploring post-growth pathways. Such a transformation entails a significant shift in economic
institutions, yet post-growth analyses of what is problematic about businesses and how to
resolve these issues are piecemeal. This article offers an overview and synthesis of key findings
in the emerging post-growth business literature. It develops a framework that conceptually ties
together five dimensions of business that have been identified as most important for post-
growth transformations: relationship-to-profit, incorporation structure, governance structure,
strategy, and size and geographical scope. The intention of developing this five-dimensions
framework is to offer a more coherent and concrete theoretical basis for ongoing discussions
about which types of business are compatible, or incompatible, with post-growth pathways.

Keywords: Post-growth economy, Degrowth, Post-growth business, Sustainable business,

Not-for-profit business

1
1. Introduction
There is mounting evidence that economies must be re-organized in ways that do not
drive incessant growth, in order to avoid a collapse of the ecological foundations upon which
human societies depend (Daly, 1996; Steffen, 2015; Parrique et al., 2019). This shift has
important implications for businesses, as key economic institutions (Jackson, 2017; Johanisova
& Fraňková, 2017)1. What should businesses be like in post-growth economies? What kinds
of features must they have (or not have) in order to be socially and ecologically sustainable?
The post-growth2 literature that deals with business tends to stay focused on the level
of individual firms, leading to piecemeal critiques of mainstream business and correspondingly
piecemeal solutions (Cyron & Zoellick, 2018). For instance, in response to globalization and
inequality, post-growth scholars have critiqued governance and incorporation structures,
proposing that shareholder corporations should give way to cooperatives (Johanisova et al.,
2013) and non-growth-driven businesses (Gebauer, 2018; Gabriel et al., 2019) that are rooted
in place and time (Johanisova & Fraňková, 2017). In response to a singular focus on profit-
maximization, authors have proposed broadening firms’ strategic scope by using strongly
sustainable business models (Upward & Jones, 2016); ‘other-than-profit’ goals (Johanisova &
Fraňková, 2017); a sufficiency-based approach (Bocken & Short, 2016); and for-benefit
production (Kostakis & Bauwens, 2014). Yet, there is a persistent concern that as long as firms
are profit-driven, this might keep them from being strongly sustainable, sufficiency-based, or
focused on social benefit (Johanisova et al., 2013; Bocken & Short, 2016). Indeed, much post-
growth literature claims that the profit-driven way of organizing business generates the macro-
scale dynamics of economic growth, consumerism and inequality, as well as the associated
environmental damage (Magdoff & Foster, 2011; Jackson, 2017). Some authors claim that not-
for-profit forms of business offer a way of addressing these dynamics (Lux, 2003; Hinton &
Maclurcan, 2017; Hinton, 2020).
How do all of these different aspects of firms fit together and how do they relate to the
post-growth compatibility of business? Schmid (2018) and Johanisova & Fraňková (2017)
highlight the need to articulate the hidden assumptions behind different conceptualizations of
post-growth business, as well as the need for discussions of how to conceptually organize the
diversity of post-growth business. Nesterova (2020) consolidates many key principles of
degrowth business found in the literature, yet it is not clear how they fit together in actual
businesses. Furthermore, the important question remains of whether these aspects of business
can be changed easily by willing managers and employees, or whether there are deeper
structural lock-ins and, if so, what those structural issues are. A framework that puts these
pieces together in a coherent way and identifies structural dimensions could provide the
foundation for more effective sustainability initiatives, helping prevent the unnecessary
confusion that arises from discussing business at cross-purposes.

1
Businesses and markets do not necessarily have to be part of post-growth economies. However, because they
are currently the main channel through which production happens in most economies, post-growth models and
visions of the future must address how businesses and markets should be transformed or replaced by some other
means of production in order to allow for sustainable provisioning.
2
I use ‘post-growth’ to refer to any growth-critical research.

2
 This conceptual paper develops a framework to more clearly organize analyses and
discussions about post-growth business. I begin with a description of the institutional
economics lens that I used to analyze the post-growth business literature, and which led me to
identify five key dimensions of the firm that correspond to institutional elements of business.
I then offer an overview of the relevant literature, organizing the key themes and aspects of
business according to these five dimensions of the firm. I include a brief description of real
firms to illustrate how these different dimensions can take shape in a variety of different ways
and combinations. I then present a framework that brings the dimensions together, ordering
them in terms of how they guide and constrain each other. This leads to the insight that the
legally-binding structural dimensions of the firm are critical for shaping economic actors’
behavior.
The dimensions framework presented in this paper clarifies how the different layers of
a business’s organizational structure might impact business behavior and allows for a clear
classification of different business models and structures in relation to sustainability. This
theoretical synthesis will inevitably be incomplete, but the main intention is to contribute more
structure and clarity to discussions around what kinds of business are compatible, or not, with
post-growth pathways, as well as what kinds of business could enable such transformations.

2. An Institutional Perspective on the Post-Growth Business

Literature

Below I present an overview of the treatment of business in post-growth research,

aiming to identify how key aspects of business are discussed and to gain an understanding of
how the different pieces fit together. In this overview, I have focused on 30 relevant articles
and book chapters, which explicitly link business to the concepts of post-growth economy and
degrowth, as well as the related concepts of ecological economics, the steady state economy,
and strong sustainability.
This body of literature identifies a variety of aspects of business that are important to
consider for post-growth economic transformations. An institutional economics lens can be
helpful in organizing these different aspects, according to the institutional elements of business
on which they focus. Institutions are systems of embedded social rules that enable, guide, and
constrain actors’ behavior (Hodgson, 2018).
A key assumption of institutional approaches is that actors respond to their institutional
contexts in a host of ways. They can reproduce, accommodate, resist, or change those
institutional contexts (Scott, 2014). Thus, an understanding of institutional contexts can give
insights into ranges of expected or acceptable behavior (Dugger, 1979). Although actors'
behavior is not determined by institutional structures, it also cannot be understood outside of
its institutional context (Ibid). By looking at the institutional elements that guide and constrain
businesses, we can get a better understanding of which institutions must change in which ways,
in order to be compatible with a post-growth understanding of sustainability.
Institutional economists tend to pay particular attention to legally-binding formal
institutional elements (i.e., regulative institutions), such as property rights (Hodgson, 2018).

3
Legally-binding institutions are typically more precisely articulated than other types of social
rules and there is a higher degree of obligation to comply with these types of institutions
because they are enforced by a legal authority (Scott, 2014, p. 60). Another basic assumption
of institutional economics is that the assignment of property rights creates incentives that shape
the dynamics of the economy at large (Libecap, 1986). This meshes with much post-growth
research, which also acknowledges the importance of property rights and business ownership
for the growth-orientation of the economy (Parrique, 2019).
Important to note is that regulative institutions have a corresponding logic and purpose
- such as the logic of capitalism or the purpose of increasing profit (Scott, 2014, p. 62). Thus,
attention must be paid to the purpose embedded in institutions when discussing post-growth
possibilities (Göpel, 2016). When regulative institutions are aligned with the social norms and
belief systems in a given context, they can be powerful in guiding and constraining actors’
behavior and are thus good indicators for anticipated ranges of behavior (Scott, 2014). On the
other hand, a lack of institutional alignment can lead to confusion and conflict (Ibid).
Therefore, the alignment of different institutional elements of business with post-growth aims
is important for post-growth transformations.

3. Five Dimensions Framework for Post-Growth Business

3.1 The five dimensions
My reading and analysis of the post-growth business literature was shaped by a focus
on these aspects of institutions: whether they are legally-binding or not; their connection to
property rights; and their connection to the purpose and goals of business. This led me to
identify five key dimensions of business that are discussed in the post-growth literature:

• Size and geographical scope refers to how small versus large a business is, as well as how
local versus global it is.
• Strategy refers to how a business uses its resources to achieve its purpose. This includes
business management, business planning, and business practices.
• Governance refers to the rules, practices, protocols, and processes by which decisions are made
in a business. This differs from strategy in that it does not relate directly to which actions the
business undertakes, but rather how and by whom those decisions are taken - and who is
excluded from decision-making.
• Incorporation structure (also known as corporate form or legal form) refers to the specific
legal body in which a firm is incorporated or signed into legal existence.
• Relationship-to-profit (also known as legal form or organizational form) refers to the legal
distinction between for-profit and not-for-profit types of business.

Size and geographical scope of businesses are given a great deal of attention in the
post-growth literature, and overall, scholars have advocated for small, local companies that do
not want or need to grow (e.g., Latouche, 2006; Dietz & O’Neill, 2013; Johanisova et al., 2013;
Liesen et al. 2015; Johanisova & Fraňková, 2017; Gebauer, 2018; Gabriel et al., 2019;
Nesterova, 2020). Reichel & Seeberg (2011) discuss the idea of a ‘rightsize business’. There
is also frequent mention of SMEs (small and medium sized enterprises) (e.g., Kopnina, 2016)

4
and (re)localizing production (Nesterova, 2020). This is more of an attribute of business, or an
outcome of a business’s institutional configuration and wider context, rather than an
institutional element itself. It is not legally-binding, and it has no direct connection to the
purpose or property rights of a company. The desire to grow or not, as a business goal, can be
seen as a normative or cultural institution that belongs in the dimension of strategy.
Strategy tends to be the area of greatest focus in the post-growth literature concerning
business. This is a non-legally-binding dimension that has no direct connection to the property
rights of a firm, but does often connect to the firm’s purpose in terms of goals and voluntary
objectives. There are some informal institutional elements to be found in this dimension (such
as norms and beliefs), but strategy is more about agency than structure. This dimension
encompasses how businesses respond to and shape their institutional contexts. It spans a wide
array of concerns, including supply chain management, ethical sourcing, production
techniques, third-party certification, sustainability-oriented accounting tools, voluntary
objectives, non-market behaviors, and everyday practices.
In the post-growth literature, there is an especially sharp emphasis on voluntary
objectives like sufficiency; societal needs and wellbeing; consideration of non-human life;
other-than-profit goals; and inclusive, collaborative, or shared value creation (e.g., Dietz &
O’Neill, 2013; Bocken & Short, 2016; Wells, 2016; Upward & Jones, 2016; Hankammer &
Kleer 2017; Johanisova & Fraňková, 2017; Reichel, 2017; Cyron & Zoellick, 2018; Khmara
& Kronenberg, 2018; Wells, 2018; Nesterova, 2020)3. Along those lines, there is a focus on
metrics and indicators (e.g., Reichel & Seeberg, 2011; Dietz & O’Neill, 2013). There is
naturally also a concern about the kinds of products and services a company chooses to sell,
and in which sector(s) it chooses to operate (e.g., Wells, 2018; Nesterova, 2020). Circular
economy practices are prominent, such as: closed-loop processing; life-cycle analysis; material
and energy efficiency; sharing resources; using renewable resources (and avoiding non-
renewables); using natural processes; servicization (providing functionality rather than
ownership); encouraging sufficiency; and making products that last and are repairable (e.g.,
Reichel & Seeberg, 2011; Bocken et al., 2014; Kopnina, 2016; Khmara & Kronenberg, 2018;
Wells, 2018; Nesterova, 2020). There is also a focus on the use and production of appropriate
technology, as well as open-access and open-source technology (Kostakis & Bauwens 2014;
Wells, 2016; Nesterova, 2020). Several authors identify increased cooperation between firms
as important (e.g., Reichel, 2017; Schmid, 2018; Nesterova, 2020).
Schaeffer et al. (2015) also describe some prerequisites for sustainable business related
to wider social norms and value systems, that the firm should include: a caring view of human
nature; a focus on social justice and equity; adoption of complex systems thinking; identifying
root causes of sustainability problems; critical reflection on one’s own habits and patterns;
seeing profit as a means, rather than an end4; and respecting the planetary boundaries. Reichel
(2017) refers to ‘(e)noughness, multiple values, cross- sectoral market places, products and
solutions for convivial lifestyles’ (p. 109). Along these lines, some authors write about the need
for company managers and employees to behave in sustainable ways at work and in their

3
Kostakis & Bauwens’ (2014) framing of ‘for-benefit business’ also implies voluntary social benefit objectives.
4
Seeing profit as a means rather than an end can be legally enshrined at the level of incorporation structure and
relationship-to-profit; otherwise, it is a voluntary objective (i.e., not legally enforceable).

5
personal lives (e.g., Khmara & Kronenberg, 2018; Nesterova, 2020). With regards to workers,
Nesterova (2020) includes in her framework: reduced working hours and a focus on meaningful
work, as well as developing human potential.
Governance structures also feature strongly. Much of the post-growth literature has
advocated for democratic, inclusive, collaborative, decentralized, networked, and adaptive
companies (e.g., Johanisova et al., 2013; Kostakis & Bauwens, 2014; Reichel, 2017; Cyron &
Zoellick, 2018; Khmara & Kronenberg, 2018; Schmid, 2018; Nesterova, 2020). Johanisova et
al. (2013) refer to the governance structures built into many publicly listed shareholder
companies as being unsustainable (i.e., that shareholder votes depend on the number of shares
one owns). Similarly, one of Upward & Jones’ (2016) requisites of a sustainable business
model is that it must describe which stakeholders are to be involved in which conversations
and advocate for processes of legitimation that are ‘determined by the relative power of actors
and stakeholders via governance arrangements' (p. 109). Reichel (2017), Cyron & Zoellick
(2018), and Payán-Sánchez et al. (2019) discuss bringing more stakeholders into management
and decision-making. ‘Participative collaboration’ is one of Shaeffer et al.’s prerequisites for a
sustainable business (2015). Some authors claim that democratic or worker self-management
are essential components of sustainable business (Latouche, 2006; Johanisova and Wolf, 2012;
Johanisova & Fraňková, 2017; Nesterova, 2020). As will be discussed in more detail in section
3.3, some aspects of this dimension can be legally-binding, while other aspects are not legally-
binding. For instance, some types of companies are legally obliged to have a board in their
governance structure, but decision-making also happens in less formal ways, such as when a
company forms a team to manage a specific project and the team is then dissolved once the
project is completed.
The incorporation structure is identified as important in the post-growth literature
because it locks into place exactly who the owners are and which legal rights, responsibilities,
and obligations the company has in relation to the owners and other stakeholders (Johanisova
et al., 2013; Orsi, 2013; Orts, 2013; Johanisova et al., 2015). This is a legally-binding
institutional element that relates directly to both the purpose and property rights of a company.
Although specific legal bodies vary from place to place, some generic incorporation structures
that are available in many parts of the world include the limited liability company (LLC);
publicly-traded shareholder corporation; joint stock company (not publicly traded);
partnership; sole proprietorship; cooperative; nonprofit corporation; and association5.
The post-growth literature has mostly focused on a few incorporation structures.
Scholars’ attention is largely focused on moving away from the publicly-traded shareholder
company, and towards cooperative structures (e.g., Johanisova & Wolf, 2012; Dietz & O’Neill,
2013; Johanisova et al., 2013; Johanisova et al., 2015; Nesterova, 2020). Traditional not-for-
profit incorporation structures, such as the charity, foundation, and association, are increasingly
being used as legal bodies for carrying out business activities for social benefit (Salamon et al.,

5
It is worth noting that ‘social enterprise’ is not an incorporation structure, but is rather a category open to
interpretation that can include both types of relationship-to-profit, as well as many different kinds of incorporation
and governance structures (Reiser & Dean, 2017). In other words, the term ‘social enterprise’ provides limited
usefulness for post-growth scholars and practitioners (Johanisova & Fraňková, 2017; Houtbeckers, 2018).

6
2013) and are sometimes mentioned in post-growth literature (e.g., Johanisova et al., 2013;
Hinton & Maclurcan, 2017; Johanisova & Fraňková, 2017; Schmid, 2018; Hinton, 2020).
Relationship-to-profit is a legally-binding institutional element that relates directly to
both the purpose and property rights of a company. Indeed, this dimension is mainly
characterized by a difference in legal purpose and financial rights (i.e., the right to receive the
profit and assets of a company (Palmiter, 2003)). The defining attribute of for-profit business
structures is the ability to distribute profit to private owners (via private financial rights) and
to pursue financial gain6 as their purpose (Hansmann, 1980; Reiser & Dean, 2017). Not-for-
profit structures are characterized by the non-distribution constraint, which precludes a
financial gain purpose and private financial rights, in order to ensure that resources are used
for a social benefit purpose rather than private enrichment (Hansmann, 1980; ICNL, 2013;
Reiser & Dean, 2017). Not-for-profit businesses can also be distinguished from traditional not-
for-profit organizations in that they generate most or all of their revenue through the sale of
goods and services, rather than depending on grants and philanthropy (Hinton & Maclurcan,
2017). Not-for-profit businesses can be found all over the world in nearly every sector of the
economy, and have been the subject of social economy research for decades (e.g., James &
Rose-Ackerman, 1986; Dees et al., 2001; Borzaga & Tortia, 2007; Patten, 2017).
In the post-growth literature, Johanisova et al. (2013) are critical of profit being a
business objective and they extend that criticism to for-profit forms of business (pp. 7-8 and
p. 11). Lux (2003), Hinton & Maclurcan (2016, 2017), and Hinton (2020) posit that the
dynamics of a not-for-profit market would allow for post-growth sustainability in ways that
for-profit markets do not. This is due to the requirement for not-for-profit forms of business
to have a social benefit purpose, as well as the preclusion of a financial gain purpose, private
financial rights, and the private distribution of profit.

3.2 A brief exploration of existent businesses to illustrate the dimensions

These five dimensions can be used as a kind of taxonomy to more clearly see how
aligned (or not) a company is with global sustainability concerns and post-growth aims. Table
1 shows how the dimensions can be used to understand and compare companies, giving a brief
illustrative description of some firms that have featured in sustainable business discussions:
Unilever (Sim et al., 2016); Riversimple (Wells, 2018); Greyston Bakery (Van Wert, 2018);
Mondragon (Johanisova et al., 2013); and BRAC (Seelos & Mair, 2009). The content of the
table should not be seen as empirical evidence derived from case study research. These specific
businesses have been included here because they are diverse enough to illustrate and contrast
the different dimensions and various combinations of attributes. I will touch on these concrete
examples as I elaborate the conceptual framework below. All information shown in the table
is publicly available, and was obtained from the companies’ websites (see the reference list),
with the exception of Riversimple, for which some information was also obtained from the UK
national company register website (UK Companies House, 2019). Some of these businesses
might seem clearly aligned with post-growth aims, or at odds with them. The purpose of this
exercise is to illustrate how taking all five dimensions into consideration can provoke a deeper
discussion of why some businesses are more post-growth-compatible than others and in which

6
Also known as a pecuniary gain purpose.

7
ways, than if the focus were on just one or two of the dimensions (which is commonly the
case).

Business Relationship- Incorporation Governance Strategy Size and scope

name to-profit structure
Unilever For-profit Publicly-listed Head-quarters and Produces food & Transnational;
company boards in different refreshments, home care 161,000 employees;
countries products, beauty & €51 billion annual
(Netherlands, UK, personal care products; revenue; Owns more
and US); Chief CSR activities, life than 400 different
officer and cycle analysis, and brands in different
executive sustainability reporting; sectors
positions (23 Some subsidiaries are B
people in top Corp certified;
leadership Sustainable Living Plan
positions); Annual (vision ‘to make
General Meeting sustainable living
(for shareholders) commonplace’)
Riversimple For-profit Private One central office Produces electric and Local (but unclear
limited with six people in hydrogen fueled cars; how local); Based in
company leadership Has several Landrindod Wells,
positions; sustainability UK; 21 employees;
Six Custodians objectives; Aims for Revenue is not
(not-for-profit circularity via product publicly available
entities to service systems and online
represent different distributed
stakeholders) manufacturing; Vision
is ‘to pursue,
systematically, the
elimination of the
environmental impact
of personal transport’
Greyston Not-for-profit LLC owned Four people in Produces baked goods; Local (New York),
Bakery (for-profit by a 501(c)3 chief officer and Uses an Open Hiring but ships nationally in
subsidiary foundation management Model (hires people the US; 65 employees;
fully-owned positions; who cannot find jobs); 2.3 million USD
by a not-for- Emphasis on B Corp certified; annual revenue
profit) community Moving into vegan
engagement; products with Whole
‘Dynamic Planet Foundation;
democracy’; Buddhist principles

Mondragon For-profit7 Worker Democratic Manufactures machines, National (Spain);

Corporation cooperative representatives electrical appliances, 80,000 employees;
federation and assemblies construction equipment, €12 billion annual
technical assistance, revenue; Owns 266
legal services, food; companies and
Democratic vision; cooperatives
Strives to be
competitive and
profitable; No
ecological goals

7
The worker cooperative incorporation structure involves private financial rights for worker-owners (Pencavel
& Craig, 1994).

8
 BRAC Not-for-profit Nonprofit Global board (5 Runs businesses in International
corporation members); clothing and furniture (Bangladesh,
with several Governing body retail, agriculture, Afghanistan, Liberia,
subsidiaries (9 members); micro-finance, and legal Myanmar, Nepal,
Executive body aid services, in order to Phillipines, Rwanda,
(with 27 people in achieve social benefit Sierra Leone, South
managing and missions of addressing: Sudan, Tanzania, and
director extreme poverty; Uganda); 110,000
positions); professional employees; 78 billion
Country development; climate Taka (circa €830
representatives change and food; million) annual
education; gender revenue; Owns 5
equality; universal social enterprises
access to healthcare;
and human rights
outreach
Table 1: A dimensional profile of diverse companies

If only one or two of the five dimensions are taken into account, there is a risk of
missing information that has significant implications for post-growth outcomes. For instance,
B Corp certification and social enterprises are often highlighted in post-growth discussions
(e.g., Johanisova & Wolf, 2012; Khmara & Kronenberg, 2018; Nesterova, 2020). A focus only
on this strategic aspect would highlight Greyston Bakery, BRAC, and Unilever, which vary
greatly in terms of all of the other dimensions. Large for-profit corporations like Unilever might
have sophisticated sustainability strategies, including a B Corp certification and life-cycle
analysis, but the risk is high that their financial gain purpose, shareholder investment structure,
and private distribution of profit undermine those strategies. Furthermore, there is no legally-
binding mechanism to hold them accountable for how well (or how) they carry out their
particular sustainability strategies or engage with societal wellbeing.
If the focus is on small and local companies, Greyston Bakery and Riversimple stand
out. However, there are important differences between these firms. Greyston has no private
owners and uses all profit for the social benefit mission of helping ‘unemployable’ people find
jobs, as well as running early learning programs, community gardens, and housing programs
in disadvantaged communities (Greyston, 2017). They also publish their full annual financial
reports on their website. In contrast, Riversimple has taken private equity-based investment
(Seedrs, 2019), but does not clearly disclose on its website what its investment structure is;
who the owners are; how much revenue it generates; nor what happens to the profit. These are
all arguably very important aspects of business when it comes to sustainability and post-growth
transformations. Furthermore, if large international companies are simply assumed to be
unsustainable, post-growth opportunities of the kind BRAC demonstrates might be missed.
BRAC uses its profit to have a positive impact on the lives of rural and poor people by creating
more economic democracy in several different countries, through locally-rooted branches
(Ibrahim & Hulme, 2011, pp. 397-398).
Similarly, this taxonomy exposes the tensions between the dimensions that a company
might have. For instance, a firm might have a more democratic approach to governance, but
does not address sustainability concerns in their strategy or they are locked into a for-profit
structure. Clearly, all five of the dimensions are worthy of attention in post-growth discussions.

9
3.3 Ordering the Dimensions
All of these dimensions represent different aspects of business that are important for
post-growth economies. The challenge is to fit these different dimensions together to form a
more complete picture of what is required of firms for transformations to post-growth
economies.
Showing how the five dimensions relate to each other can help scholars and
practitioners identify the necessary and sufficient conditions of business for post-growth
economies. I have used changeability as a heuristic tool for ordering the dimensions. Drawing
upon the institutionalist perspective outlined above, the changeability of the dimension has to
do with informal expectations versus legal rights and responsibilities. For instance, to shift the
incorporation structure or relationship-to-profit requires legal changes to the basic structure of
the business, including the assignment of its financial rights. It is not as easy to change elements
in these dimensions as it is to change elements in the strategy dimension. Furthermore, the
financial rights of the business can be expected to have an important impact on its strategy, but
not vice versa. Changeability thus reveals which dimensions actively guide and constrain other
dimensions, and which dimensions are more guided and constrained by others.
Returning to our real-world examples, Mondragon can change its strategy tomorrow
(and its broad production range indicates that it has already done so several times), without
impacting its democratic governance structure, but not vice versa. Reducing employee
involvement in its decision-making can be expected to have a significant effect on the firm’s
strategy. In the same vein, Unilever could readily change its governance structure to be more
democratic without getting rid of its shareholders. However, if Unilever’s incorporation
structure transformed from a publicly-traded shareholder corporation to a partnership, it would
have major impacts on the company’s governance – for instance, the corporate board would
likely be dissolved. In most cases, changes to a company’s incorporation structure does not
have an impact on its relationship-to-profit. However, if the relationship-to-profit changes,
there are usually major impacts on the incorporation structure. If Riversimple transitioned from
a private limited company to a shareholder corporation, it would still be for-profit. But if
Riversimple wanted to become not-for-profit, it would have to either change its incorporation
structure to a not-for-profit type or expand its incorporation structure by transferring all
ownership to a not-for-profit parent organization (as is the case with Greyston Bakery).

10
 Figure 1: Five Dimensions of Business

This analysis enables the ordering of the dimensions in relation to each other (as shown
in Figure 1). The dimensions at the bottom of the pyramid (relationship-to-profit and
incorporation structure) are legally-binding and structural in nature and, as such, they are not
easy to change. The dimensions at the top relate to purpose and goals, but are not legally-
binding. Size, scope, and strategy are guided and constrained by the other dimensions but do
not have much of an impact on those lower dimensions. Governance can be seen as a mediating
dimension, which is guided and constrained by the lower dimensions, and also has a high
degree of influence on the upper ones. Some structural aspects of governance are legally-
binding, such as voting rights in cooperatives and shareholder corporations, while others are
not, such as decision-making protocols in the day-to-day management of the business’s
resources.
The five dimensions are more dynamic and interrelated than they are depicted in Figure
1. They should not be thought of as silos, separate from one another. Nor do processes flow
linearly upward from the bottom dimensions to the top. Instead, the dimensions are better
thought of as different interacting aspects of one dynamic system. This is similar to an
ecosystem, where the soil and climate are less changeable and have a large influence on how
the ecosystem functions, but the microbes, plants, and animals still play a vital role in shaping
the ecosystem’s dynamics.
Another useful metaphor for interpreting the order of these dimensions is that of an
iceberg. The upper dimensions are more visible and currently receive more attention in the
academic literature, whereas the lower dimensions are less visible. Perhaps the reason they
receive less attention is because they are legal in nature, making them technically complex,
more difficult to get information about, and harder for interdisciplinary researchers to integrate.

11
For instance, it is very easy to gather information about the strategy, size and scope of all of
the companies in Table 1 from their websites, while it takes more digging to uncover their
governance structure, corporate form, and relationship-to-profit. Yet, it is exactly because of
their legally-binding nature – the cementing of rights, responsibilities, and expectations – that
the deeper layers have significant impacts on the other dimensions and are important for social
and ecological sustainability.

3.3.1 A Closer Look at How Each of the Dimensions Affects the Others
The upper dimensions of strategy, size and scope, can be characterized as being more
changeable, diverse, and context-dependent. The size and geographical scope of a business can
be seen mostly as an outcome of strategy. A company can choose to stay small and local, like
Greyston, or to grow large and become transnational as a part of its strategy (Penrose & Pitellis,
2009). The size and geographical scope can also be a byproduct of certain strategies. A
company seeking to control more of its supply chain might do so by acquiring other companies
in the supply chain, thus becoming larger and more international. As such, the size and scope
of a business are fairly changeable traits, that are quite heavily influenced by strategy directly.
Size and geographical scope can also be impacted by the incorporation structure and
relationship-to-profit of the company, through strategy. For example, equity-based investment
from venture capitalists might put pressure on managers to pursue a growth-driven strategy.
The size and scope of a business can also guide and constrain strategy and governance
structures, in terms of what is feasible and desirable. For instance, if a company has thousands
of employees, like Unilever or BRAC, it might be more logistically challenging to switch to
more democratic governance structures than for smaller companies to do so.
The strategy of a business guides and constrains the size and geographical scope of a
business. However, strategy is mostly influenced by other dimensions. For instance,
governance determines who can participate in making decisions and in shaping the voluntary
objectives of the firm. Likewise, a company’s strategy is guided and constrained by its
incorporation structure and relationship-to-profit, in terms of setting priorities as well as
choosing ways of pursuing those priorities. The for-profit structure means that there are likely
investors who expect a dividend, so there is pressure on the manager to deliver this (Bapuji et
al., 2018). Managers of for-profit social enterprises are expected to find a way to balance
financial gain for owners with benefits for the wider community (Reiser & Dean, 2017). A not-
for-profit social enterprise is expected to focus its strategy on generating enough revenue to
pursue the social benefit mission (James & Rose-Ackerman, 1986). This means that in order
to radically change strategy (e.g., to decrease the size of its output), a company might require
corresponding shifts in the governance, incorporation structure, and relationship-to-profit
dimensions.
Governance structures are somewhat flexible and somewhat steadfast in nature. Some
aspects of governance structures are legally-binding, while other aspects can be changed
overnight by managers. In many companies, a CEO can decide to make a project manager more
independent in terms of her decision-making and her control over the company’s resources, for
instance requiring less oversight of how she uses the budget. This change in governance
protocols can often be made without any need to amend legal documents.

12
 However, incorporation documents can determine some aspects of governance in
legally-binding ways. For example, the cooperative is an incorporation structure that requires
democratic decision-making (ICA, 2018). Likewise, publicly-traded corporations, nonprofit
foundations, and associations are incorporation structures that require a board to be engaged in
major decisions (ICNL, 2013; Orts, 2013). In a sense, the governance of a business bridges the
incorporation structure with the strategy dimension. Decisions are connected to the legal
responsibilities and obligations of the business through its decision-making protocols, which
include and exclude certain stakeholders according to the incorporation structure. As a
shareholder corporation, Unilever’s structure means that members of the board can have a
direct influence on the strategy and that investors with voting-right shares can also influence it
once a year at the shareholder’s meeting (Unilever, 2020b).
Finally, relationship-to-profit guides and constrains the dimensions of incorporation
structure, governance, and strategy. As such, it can also have an indirect influence on size and
scope. The non-distribution constraint, which is the essence of the not-for-profit organizational
type, means that only certain kinds of incorporation structures can be considered not-for-profit.
For instance, a company with private shareholders (whether through private equity or publicly-
traded shares) can only be for-profit. The focus on social benefit often guides or requires the
company to have a board in its governance structure, in order to hold the firm accountable for
using its resources for this purpose (Orsi, 2013). Likewise, relationship-to-purpose guides and
constrains the company’s strategy to focus on the pursuit of its legal purpose (ICNL, 2013;
Orsi, 2013).

3.4 Overlapping but Different: Relationship-to-Profit and Incorporation Structure

Relationship-to-profit and incorporation structure are closely linked, in terms of
ownership and investment. It might not be necessary to consider the distinctions between them
at all in post-growth discussions, if it were not for three main issues:

• the widespread lack of awareness of not-for-profit forms of business and the common
assumption that business is naturally for-profit;
• the lack of clarity about financial rights in some incorporation structures; and
• the wide ranges of acceptable business behavior among different incorporation types.

With regards to the first issue, most scholars and practitioners assume that business
must be for-profit (Hinton, 2020) or even that maximizing owners’ wealth must be a prime
concern of all businesses (Bapuji, 2018). As such, some authors have pondered how to make
companies prioritize social benefit over private profit. For instance, Johanisova et al. (2013)
express a common concern, ‘Another difficult issue which needs to be discussed in relation to
a potential social enterprise future is the tendency of successful alternative economic structures
to revert to a mainstream model… How do explicit social and environmental objectives get
written into the objects of an enterprise, and take long-term precedence over simple profit
maximisation?’ (pp. 14-15). Bocken & Short (2016) express a similar concern. The not-for-
profit structure prohibits private distribution of profit, which offers clarity, accountability, and
enforceability to the prioritization of social benefit. Therefore, it is important to highlight that

13
the for-profit structure is a matter of choice and social norms, rather than a natural aspect of
business.
Regarding the second issue, with so many different kinds of incorporation structures it
is hard to keep track of the types of financial rights and legal purpose associated with each
structure. Incorporation structures are complex, diverse, context-dependent, and constantly
evolving, so it is not an ideal dimension to guide international and interdisciplinary discussions
and visions for post-growth organizing. Relationship-to-profit has only two types, which are
found around the world, and it relates directly to legal purpose and financial rights. Therefore,
relationship-to-profit offers a useful shorthand for this important information. For instance, the
non-distribution constraint of not-for-profit structures means that dual-purpose incorporation
structures, which seek to deliver social benefit and private financial gain to owners (like the
benefit corporation in the US), are for-profit in legal terms (Reiser & Dean, 2017). This is a
point that is commonly misunderstood in the literature in instances where authors describe
dual-purpose businesses as not really being for-profit or not-for-profit (e.g., Dietz & O’Neill,
2013, p. 149). This point of confusion between incorporation structure and relationship-to-
profit is part of the reason why the latter needs to be a separate dimension. In Figure 2, I have
traced how relationship-to-profit and incorporation structure are connected in order to highlight
how the former is a more straightforward indication of purpose and financial rights than the
latter.
Incorporation structure is often (but not always) tied to one type of relationship-to-profit
(as depicted in Figure 2). For instance, a publicly-traded shareholder corporation can only be
for-profit, and a state-owned enterprise can only be not-for-profit. However, some
incorporation structures can be either for-profit or not-for-profit, such as cooperatives and
many types of social enterprise. For example, consumer cooperatives can be considered not-
for-profit8, whereas worker cooperatives are for-profit, as they entail private financial rights
(Pencavel & Craig, 1994). Community Interest Companies in the UK are another example, as
there are two available forms: limited by shares and limited by guarantee (Office of the
Regulator of CICs, 2013). The former is for-profit, as it allows for the private distribution of
profit (albeit capped). The latter does not, so it is not-for-profit. This difference is not
immediately clear and has, thus, led to confusion in the literature. Dietz & O’Neill (2013) for
instance, describe all Community Interest Companies as having private financial rights (p.
149). If business ownership is as important for post-growth organizing as many authors claim
(e.g., Lange, 2018), then this information about different types of business needs to be easily
accessible and decipherable.
Adding complication to the situation, a company that is incorporated as a for-profit
structure, like a limited liability company, can be owned by a not-for-profit entity (as is the

8
The only way members can capture the value of the cooperative’s activities is by buying its goods and services
(Ruiz-Mier & van Ginneken, 2006). It can be argued that consumer cooperatives and credit unions meet the
legal definition of not-for-profit, because the profit distributed to consumers will never be more than a fraction
of what the consumers have spent into the company via purchases (Hinton and Maclurcan, 2016). The
‘dividends’ from consumer cooperatives are best thought of as refunds, rather than actual dividends for private
financial gain.

14
case with Greyston Bakery). Despite its complex incorporation arrangement, Greyston meets
the legal definition of NFP, because it is wholly-owned by an NFP entity, precluding private
financial rights. These intricate aspects of incorporation structures reveal why relationship-to-
profit needs to be its own dimension. Even in less straight-forward incorporation structures,
asking the question of whether a business is for-profit or not-for-profit prompts questions (and
answers) about two of the most important aspects of business for post-growth organizing – the
financial rights and legal purpose (as shown in Figure 2).

Figure 2: Relationship-to-profit and incorporation structure

Lastly, the relationship-to-profit and incorporation structure of a company can

encourage, allow for, or inhibit the pursuit of certain business objectives, such as private
financial gain or social benefit. This leads to a range of possible strategic behaviors, as
conceptualized in Figure 3. Equity-based investment can compel for-profit companies to
pursue profit as an ultimate end, because equity-holders are expecting returns on investment.
Some for-profit incorporation structures, such as the publicly-traded shareholder corporation,
have more structural pressure to deliver private profit than others (Johanisova et al., 2013;
Bapuji et al., 2018). The partnership, LLC, worker cooperative, and producer cooperative
structures allow for the pursuit of social benefit or for a sole focus on private financial gain,
depending on the motivation of the owners – but there is no legal requirement for a focus on
either type of objective. If a producer cooperative’s members are for-profit companies, the
cooperative can be very focused on delivering private profit to its members’ owners (Gall &
Schroder, 2006). Dual purpose incorporation structures are expected to deliver financial gain
to owners, but often have caps on how much profit and assets can be privately distributed, so
that the business can focus on social benefit as well (as in the case of Community Interest
Companies limited by shares, mentioned above).

15
 Figure 3: Relationship-to-profit and incorporation structure guide and constrain the range of
business behavior

Note that all for-profit structures allow for the pursuit of private financial gain, whereas
not-for-profit structures do not. If a not-for-profit company does pursue private financial gain,
it is breaking the law and can be held legally accountable (James & Rose-Ackerman, 1986;
ICNL, 2013; Orsi, 2013). As Figure 3 illustrates, not all not-for-profit businesses will act
sustainably and not all for-profit businesses are slaves to the profit-maximization mandate;
rather not-for-profit business frameworks naturally encourage a focus on social benefit, while
for-profit business frameworks risk encouraging a focus on private financial gain and driving
problematic dynamics like consumerism, environmental degradation, inequality, and market
concentration (Hinton, 2020).

4. A Brief Discussion of the Theoretical and the Practical

Theoretical approaches to business often describe how a firm operates after it has
already been started. However, aspects such as desired corporate form, governance, size,
strategy, and relationship-to-profit can influence how entrepreneurs decide to start their
business in the first place.
When starting a business, entrepreneurs have to contend with many things all at once.
They must think about where they can find sources of investment, and on which conditions.
Different kinds of investment have different kinds of expectations when it comes to a return on

16
investment. They must grapple with the types of incorporation structure that are available and
which is best for their business plan. They must think about what kind of ownership structure
they prefer. If they find easier access or better terms with certain streams of investment, then
that might guide the way they structure the business. Likewise, the desired incorporation
structure may shape decisions about relationship-to-profit (e.g., a worker-cooperative or
partnership). A lack of knowledge about the different options that are available may also shape
decisions (Schmid, 2018).
For traditional firms that have financial gain as a core aim, the question of relationship-
to-profit might never even appear as a decision that needs to be made; for-profit legal structures
will be taken for granted in investment and ownership decisions, leaving explicit decisions to
be made only about the incorporation structure (i.e., which specific legal vehicle to use),
governance, strategy, size and scope. If an entrepreneur desires to have a core social benefit
purpose, relationship-to-profit becomes more prominent in the decision-tree. In fact,
entrepreneurs that choose the not-for-profit organizational type often do so in order to minimize
the possibility of the business drifting away from its social benefit mission (Reiser & Dean,
2017).
These practical issues of how aware and familiar entrepreneurs are with the existing
range of ways to organize a business have implications for transformation. If certain forms of
business are deemed necessary for post-growth transitions, then awareness may need to be
raised about those types of business. For instance, it is difficult to imagine how the economy
could transition from for-profit to not-for-profit types of business without a larger social
movement that raises awareness about this possibility9. However, these concerns should not
influence how we conceptualize the necessary and sufficient conditions for post-growth
business. There are important differences between identifying and describing the most post-
growth compatible businesses that currently exist, on the one hand, and conceptualizing the
necessary and sufficient conditions for all businesses in a post-growth economy, on the other.
The five dimensions framework offers a concrete basis for both types of discussions.

5. Conclusion
This article has organized and grounded various specific insights about business and
post-growth economies in one coherent framework. The five dimensions framework offers a
clearer conceptual foundation for assessing how and why different types of business might be
compatible (or not) with post-growth transformations. It can facilitate the theoretical and
practical development of post-growth-compatible firms, and can also be used to probe existing
businesses for post-growth-compatibility.
Scholars have so far largely focused on aspects of the governance, strategy, size and
geographical scope of firms, but have largely overlooked the deeper legally-binding structures
that guide and constrain those more changeable processes. Considering all five dimensions in
the framework above might help researchers, policy-makers, and practitioners find better ways
of aligning economic activity with social and ecological sustainability. As it offers a concrete,

9
Hinton & Maclurcan (2016) offers such a transformation scenario from the for-profit economy to a not-for-
profit economy (pp. 215- 246).

17
well-defined set of terms and categories, it might also help scholars and practitioners avoid
unnecessary misunderstandings in discussions about sustainable business. The debate is not
about whether not-for-profit structures, democratic decision-making, or environmentally-
regenerative strategies are required for post-growth transformations, but rather how attributes
in all five dimensions might be aligned. The debate should be about which kinds of changes
are important in all of these dimensions, and why. The specific criteria given by post-growth
authors for each dimension10 (covered in section 3.1) offers clear guidance for more holistic
sustainability analysis and organizing.
The five dimensions framing also helps reveal the amount of existing diversity of
business structures that can suit a post-growth economy, rather than just social enterprises or
cooperatives. This can help readers find those building blocks in their own communities rather
than trying to create something new or reinvent the wheel.
Another contribution of this framework is that it can help to categorize types of business
as: growth-driving; potentially compatible with post-growth transition pathways; or ideal for
post-growth economies. This connects to questions about what the necessary and sufficient
conditions of business are for the post-growth economy and gives guidance for avenues for
future research. Which attributes in each of these dimensions are not compatible with post-
growth aspirations, which are compatible, and which traits might be necessary? The extent to
which the deeper layers guide and constrain the other layers, due to their legally-binding nature,
hints that they are where the necessary conditions for a post-growth economy might reside.
Should the sustainability of the economy be left to the visions and voluntary objectives of
enlightened owners and managers, or is a transition in the legally-binding institutions of
business necessary?
Of course, there are also many external factors that influence whether a firm behaves
sustainably. All firms operate in a larger economic and societal context, and experience various
sources of pressure, resistance, encouragement, and constraint from contextual factors as well.
This means there are important differences when contrasting how for-profit businesses might
act in a predominately for-profit market; how not-for-profit companies might act in a for-profit
market; and how not-for-profit businesses might act in a predominately not-for-profit market.
To this end, and because relationship-to-profit plays such an important role in guiding and
constraining other dimensions of the firm, there is a need to collect data on not-for-profit
business as a distinct category, separate from for-profit businesses and charity-dependent
nonprofits, in order to better understand the ranges of sustainability outcomes associated with
this type of business and the extent to which their behavior is influenced by larger for-profit
dynamics.

Acknowledgements: I am grateful for feedback on drafts of this article from Sarah Cornell,
Arnaud Diemer, Anselm Schneider, Timothée Parrique, María Mancilla García, Wijnand
Boonstra, Ola Persson, and two anonymous reviewers.

10
Nesterova (2020) in particular gives a robust set of criteria.

18
References
Bapuji, H., Husted, B., Lu, J., & Mir, R. (2018). Value Creation, Appropriation and
Distribution: How Firms Contribute to Societal Economic Inequality. Business and
Society, 57(6), 983-1009.
Bocken, N.M.P., & Short, S.W. (2016). Towards a sufficiency-driven model. Environmental
Innovation and Societal Transitions, 18, 41- 61.
Bocken, N.M.P., Short, S.W., Rana, P., & Evans, S. (2014). A literature and practice review to
develop sustainable business model archetypes. Journal of Cleaner Production, 65, 42-
56.
Borzaga, C., & Tortia, E. (2007). Social Economy Organisations in the Theory of the Firm. In
Social Economy: Building Inclusive Economies. Paris, France: OECD.
BRAC. (2020). BRAC website. Retrieved April 20, 2020, from http://www.brac.net

Cyron, T., & Zoellick, J.C. (2018). 'Business Development in Post-Growth Economies:
Challenging Assumptions in the Existing Business Growth Literature', management
revue, 29(3): 206- 229.

Daly, H.E. (1996). Beyond Growth: The economics of sustainable development. Boston, MA:
Beacon Press.

Dees, J. G., Emerson, J., & Economy, P. (2001). Enterprising nonprofits: A toolkit for social
entrepreneurs. New York, NY: John Wiley & Sons.
Dietz, R., & O’Neill, D. (2013). Enough is Enough: Building a sustainable economy in a world
of finite resources. Oxon, UK: Routledge.

Dugger, W.M. (1979). Methodological Differences between Institutional and Neoclassical

Economics. Journal of Economic Issues, 13(4), 899-909.

Gabriel, C.A., Nazar, S., Zhu, D., & Kirkwood, J. (2019). Performance Beyond Economic
Growth: Alternatives from Growth-Averse Enterprises in the Global
South. ALTERNATIVES, 44(2–4), 119–137.
Gall, R.G., & Schroder, B. (2006). Agricultural Producer Cooperatives as Strategic Alliances.
International Food and Agribusiness Management Review, 9(4), 26- 44.

Gebauer, J. (2018). Towards growth-independent and post-growth-oriented entrepreneurship

in the SME sector. Management Revue, 29(3), 230-256.

Göpel, M. (2016). The Great Mind Shift: How a new economic paradigm and sustainability
transformations go hand in hand. Cham, Switzerland: Springer International
Publishing.
Greyston. (2019). Financials. Retrieved April, 20, 2020, from https://greyston.org/financials/

19
Hankammer, S., & Kleer, R. (2017). Degrowth and collaborative value creation: Reflections
on concepts and technologies. Journal of Cleaner Production:
http://dx.doi.org/10.1016/j.jclepro.2017.03.046
Hansmann, H.B. (1980). ‘The Role of Nonprofit Enterprise’, Yale Law Journal, 89: 341- 361.

Hinton, J. (2020). Fit for Purpose? Clarifying the Role of Profit for Sustainability. Journal of
Political Ecology, 27(1), 236- 262.
Hinton, J., & Maclurcan, D. (2016). How on Earth: Flourishing in a Not-for-Profit World by
2050 (online draft). Ashland, OR: Post Growth Publishing.
https://arxiv.org/pdf/1902.01398.pdf
Hinton, J., & Maclurcan, D. (2017). A not-for-profit world beyond capitalism and economic
growth?. Ephemera Journal, 17(1), 147-166.
Hodgson, G.M. (2018). Institutional Economics. In: L. Fischer, J. Hasell, J.C. Proctor, D.
Uwakwe, Z. Ward-Perkins & C. Watson (Eds.) Rethinking Economics: An introduction
to pluralist economics, (pp. 45-59). Oxon, UK: Routledge.
Houtbeckers, E. (2018). Framing Social Enterprise as Post-Growth Organising in the Diverse
Economy. Management Revue, 29(3), 257 – 280.
Ibrahim, S., & Hulme, D. (2011). Civil Society and Poverty. In M. Edwards (Ed.), The Oxford
Handbook of Civil Society, (pp. 392- 406). Oxford, UK: Oxford University Press.
ICA (International Cooperative Alliance). (2018). Cooperative Identity. Retrieved July 6,
2018, from https://www.ica.coop/en/whats-co-op/co-operative-identity-values-
principles
ICNL (International Center for Not-for-Profit Law). (2013). Frequently Asked Questions.
Retrieved June 10, 2019, from http://www.icnl.org/contact/faq/index.html
Jackson, T. (2017). Prosperity without Growth: Foundations for the economy of tomorrow.
Oxon, UK: Routledge.
James, E., & Rose-Ackerman, S. (1986). The Nonprofit Enterprise in Market Economics. New
York: Harwood Academic Publishers.
Johanisova, N., Crabtree, T., & Fraňková, E. (2013). Social enterprises and non-market
capitals: A path to degrowth? Journal of Cleaner Production, 38, 7-16.
Johanisova, N., & Wolf, S. (2012). Economic democracy: A path for the future? Futures, 44(6),
562-570.
Johanisova, N., Padilla, R.S., & Parry, P. (2015) ‘Co-operatives’, in D’Alisa, G., Demaria, F.
and Kallis, G. (ed.) Degrowth: A Vocabulary for a New Era. Oxon, UK: Routledge.
Johanisova, N., & Fraňková, E. (2017) 'Eco-Social Enterprises', in Spash, C. (ed) Routledge
Handbook of Ecological Economics: Nature and Society (pp. 507- 516). Routledge.
Khmara, Y., & Kronenberg, J. (2018). Degrowth in business: An oxymoron or a viable business
model for sustainability? Journal of Cleaner Production, 177, 721- 731.

20
Kopnina, H. (2016). Sustainable business: What should it be? Circular economy and the
‘business of subversion’. In: H. Washington & P. Twomey (Eds.) A Future Beyond
Growth: Towards a steady state economy (pp. 70- 82). Oxon, UK: Routledge.
Kostakis, V., & Bauwens, M. (2014). Network Society and Future Scenarios for a
Collaborative Economy. London, UK: Palgrave Macmillan UK.
Lange, S. (2018). Macroeconomics Without Growth: Sustainable Economies in Neoclassical,
Keynesian and Marxian Theories. Marburg, Germany: Metropolis-Verlag.
Latouche S. (2006). Le pari de la décroissance. Paris, France: Fayard.
Libecap, G.D. (1986). Property Rights in Economic History: Implications for Research.
Explorations in Economic History, 23, 227 – 252.
Liesen A., Dietsche C., & Gebauer J. (2015). Successful Non-Growing Companies. In
Research Paper Series n°25/15. St. Gallen, Switzerland: Humanistic Management
Network.
Lux, K. (2003). 'The Failure of the Profit Motive', Ecological Economics, 44: 1- 9.
Mondragon. (n.d.). Mondragon website. Retrieved November 4, 2019, from
https://www.mondragon-corporation.com/en/about-us/
Nesterova, I. (2020). Degrowth business framework: Implications for sustainable development.
Journal of Cleaner Production, 262. https://doi.org/10.1016/j.jclepro.2020.121382
Office of the Regulator of Community Interest Companies. (2013). Community interest
companies: guidance chapters. Retrieved July 5, 2018, from
https://www.gov.uk/government/publications/community-interest-companies-how-to-
form-a-cic
Orsi, J. (2014). Practicing Law in the Sharing Economy. Chicago, IL: American Bar
Association.
Orts, Eric. (2013). Business Persons: A Legal Theory of the Firm. Oxford, UK: Oxford
University Press.

Palmiter, A.R. (2003). Ownership interests – bundle of rights. In Law and valuation:
financial valuation in legal contexts. Wake Forest University, School of Law website.
Accessed June 10, 2019. https://users.wfu.edu/palmitar/LawandV
aluation/chapter%205/5-4-1.htm

Parrique, T. (2019). The political economy of degrowth. Economics and Finance. Université Clermont
Auvergne; Stockholms universitet. English. NNT : 2019CLFAD003 . tel-02499463

Parrique, T., Barth, J., Briens, F., Kerschner, C., Kraus-Polk, A., Kuakkanen, A., &
Spangenberg, J.H. (2019). Decoupling Debunked: Evidence and arguments against
green growth as a sole strategy for sustainability. Brussels, Belgium: European
Environmental Bureau.
Patten, C. (2017). Nonprofit Social Enterprise: Social Change in a New Economic Paradigm.
Doctoral dissertation presented at the University of Vermont.

21
Payán-Sánchez, B., Pérez-Valls, M., & Plaza-Úbeda, J.A. (2019). Supply Chain Management
in a Degrowth Context: The Potential Contribution of Stakeholders. In: N. Yakovleva,
R. Frei & S. Murthy Rama (Eds.) Sustainable Development Goals and Sustainable
Supply Chains in the Post-global economy (1st ed.) (pp.31–45). Springer Nature
Switzerland AG.
Pencavel, J., & Craig, B. (1994). The Empirical Performance of Orthodox Models of the Firm:
Conventional Firms and Worker Cooperatives. Journal of Political Economy, 102(4),
718- 744.
Penrose, E., & Pitelis, C. (2009). The Growth of the Firm (4th ed). Oxford, UK: Oxford
University Press.
Reichel, A. (2017). Shape of things to come: From the ‘laws of form’ to management in the
post-growth economy. Ephemera Journal, 17(1), 89- 118.
Reichel, A., & Seeberg, B. (2011). The Ecological Allowance of Enterprise: An Absolute
Measure of Corporate Environmental Performance, its Implications for Strategy, and a
Small Case. Journal of Environmental Sustainability, 1(1), 1- 14. DOI:
10.14448/jes.01.0006
Reiser, D.B., & Dean, S.A. (2017). Social Enterprise Law: Trust, Public Benefit and Capital
Markets. Oxford, UK: Oxford University Press.
Riversimple. (2019). Riversimple website. Retrieved November 4, 2019, from
https://www.riversimple.com/making-efficiency-profitable/
Ruiz-Mier, F., & van Ginneken, M. (2006). Consumer Cooperatives: An Alternative
Institutional Model for Delivery of Urban Water Supply and Sanitation Services (Water
Supply & Sanitation Working Note No. 5). Washington, D.C.: World Bank.
Salamon, L., Sokolowski, S.W., Haddock, M.A., & Tice, H.S. (2013). The State of Global
Civil Society and Volunteering: Latest findings from the implementation of the UN
Nonprofit Handbook (Working paper no. 49). Baltimore, MD: Johns Hopkins Center
for Civil Society Studies.
Schaefer, K., Corner, P.D., & Kearins, K. (2015). Social, Environmental and Sustainable
Entrepreneurship Research: What is needed for sustainability-as-flourishing?
Organization & Environment, 28(4), 394- 413.
Schmid, B. (2018). Structured Diversity: A Practice Theory Approach to Post-Growth
Organizations, Management Revue, 29(3): 281- 310.
Scott, W.R. (2014). Institutions and Organizations: Ideas, Interests, and Identities (4th ed.).
Thousand Oaks, CA: Sage Publications.
Seedrs. (2019). Riversimple crowdfunding page. Retrieved November 4, 2019, from
https://www.seedrs.com/riversimple
Seelos, C., & Mair, J. (2009). Hope for sustainable development: How social entrepreneurs
make it happen. In: R. Ziegler (Ed.) An Introduction to Social Entrepreneurship:
Voices, Preconditions, Contexts (pp. 228-246). Cheltenham, UK: Edward Elgar

22
 Publishing.
Sim, S., King, H., & Price, E. (2016). The Role of Science in Shaping Sustainable Business:
Unilever Case Study. In: R. Clift & A. Druckman (Eds.) Taking Stock of Industrial
Ecology (pp. 291- 302). Switzerland: Springer International Publishing AG.
Steffen, W., Broadgate, W., Deutch, L., Gaffney, O., & Ludwig, C. (2015). The trajectory of
the Anthropocene: The Great Acceleration. The Anthropocene Review, 1-18.
UK Companies House. (2019). Riversimple information page. Retrieved November 4, 2019,
from https://beta.companieshouse.gov.uk/search?q=riversimple
Unilever. (2020a). Unilever webpage. Retrieved March 25, 2020, from
https://www.unilever.com
Unilever. (2020b). AGM and Voting page. Retrieved April 7, 2020, from
https://www.unilever.com/investor-relations/agm-and-corporate-governance/agm-
and-voting/
Upward, A., & Jones, P. (2016). An Ontology for Strongly Sustainable Business Models:
Defining an Enterprise Framework Compatible with Natural and Social Science.
Organization and Environment, 29(1), 97-123.
Van Wert, C. (2018) Case Study: Greyston Bakery. New York City, US: New York University.
Wells, P. (2016). Economies of Scale Versus Small Is Beautiful: A Business Model Approach
Based on Architecture, Principles and Components in the Beer Industry. Organization
and Environment, 29(1), 36–52.
Wells, P. (2018). Degrowth and techno-business model innovation: The case of Riversimple.
Journal of Cleaner Production, 197(2), 1704-1710.

23
How does the relationship between business and profit affect social and
ecological sustainability? Many sustainability scholars have identified
competition for profit in the market as a key driver of social exploitation
and environmental destruction. Yet, studies theorizing a sustainable
economy rarely question whether businesses and markets have to
be profit-seeking. The widespread existence of not-for-profit forms of
business, which approach profit as a means to achieving social benefit,
suggests that there are other ways of organizing business and markets
that might be more sustainable. In this thesis, I use a critical institutional
economics lens and systems thinking to synthesize existing theory and
knowledge about how business, markets, and profit affect sustainability
outcomes, in order to explain how alternative approaches to these
institutions might produce different outcomes. The result is a new theory
about how relationship-to-profit (the legal difference between for-profit
and not-for-profit forms of business) plays a key role in the sustainability
of an economy, due to the ways in which it guides and constrains actors’
behavior, and drives larger sustainability-related dynamics.

Jennifer B. Hinton
Jennifer’s work focuses on the
effects of different business
structures and economic
institutions on global
sustainability challenges.

Stockholm Resilience Centre, Stockholm University

Centre for Studies and Research in International Development,
University of Clermont Auvergne

ISBN 978-91-7911-344-5

View publication stats