Craig White's Literature Courses

Terms / Themes

Profit Motive

In economics, the profit motive leads people to invest or spend capital (rather than hoarding it) in other businesses in order to produce more wealth and capital for themselves. Deriving from Adam Smith (The Wealth of Nations, 1776), the theory holds that, without the prospect of returns on investments, people would not help others in their ventures.

The term may also be used more broadly, as in self-interest or the incentive to work for the sake of wages or profit.

from The Wealth of Nations: Book 1 concerning self-interest or profit motive and “the invisible hand”:

As every individual, therefore, endeavors as much as he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. (Book 4, Chapter 2)

It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest. (Book 1, Chapter 2)



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