ADVANTAGES OF NON-PROFIT-MAKING ASSOCIATIONS OVER EXCLUSIVELY MERCANTILE COMPANIES
The free market economy took an excessively firm stand over the selfishness of all economic factors that allowed, through mechanisms never fully explained, the functioning and success of general interest. One of the attacks on the market economy is derived from the extremely selfish profit-making dealt with in the marginal reflections that impose the misunderstood invisible hand, where private interest prevails over general interest, and strengthens it.
This hinted deviation, derived from a misinterpretation of the invisible hand, was joined by a hedonist and consumerist interpretation of the ultimate objectives of the human being in the course of the history of economic thought and daily activity.
The production of goods of collective character for these non-profit-making associations or foundations has the advantage with regards to the market economy, of avoiding the temptation for selfish and exacerbated personal enrichment of its proprietors. This results in, in a short-term temporary horizon, the production of maximum private profit, in spite of the social cost that is imposed on society.
They have an advantage with regards to the market economy aggravated by the exclusion of profit-making in monetary terms and in the short term. This on occasions limitless profit-making desire is substituted by an attempt to fulfil the social goal or purpose characteristic of the association or foundation in the best possible way.
It is on this point that I would like to highlight the existence and more widespread possibility of expansion of a third channel of production of collective goods and services, without falling into the pure and on occasions excessively selfish economy of the market, or into the dogmatic bureaucratic and planning state structure.
The foundations, having as a basic and differential characteristic the fact of being non-profit-making, overcome in many aspects the form of organization of the classic production units of capitalism reflected in the public limited companies.
Profit is not measured in these cases with the pure monetary fact of differential of revenue and countable costs, but rather it acquires a social and qualitative dimension that allows to predict a more mutually binding and humanized society.
The foundations allow channelling of the illusions and diverse desires of a multitude of citizens towards possible common projects that would be impossible from purely profit-making short term perspective, but that are made reality by the free and harmonic collaboration of many.
The foundation allows to strengthen the activities that have an economic effectiveness in the medium, long and very long term. The managerial activities of classic capitalism have the danger of always acting in agreement with imperatives of maximization of short-term productive success, many times mortgaging the future of their corporate purposes. The unusual search for one’s own immediate interests tends to leave important investments that only fructify in the long term out in the cold.
But the managerial reality is changing. In the developed countries, the accentuation of the importance of the most immaterial necessities over urgent and basic materials, means that leisure time increases and a return to the individual occurs. This bears a flourishing of intellectual, cultural, scientific and sporting necessities, as well as greater concern for the family, roots, patrimony, and for the social and environmental surroundings. (WOLTON, 1988).
To this phenomenon it is necessary to add the revitalisation of the importance, in all productive activity, of human capital, of the quality of the most intellectual and social component of work. This leads to a greater concern from the managerial world for education, investigation, culture and social communication.
In this context the institutions of sponsoring and patronage acquire special relevance for the good managerial image, and as an instrument for communication and expression of their own philosophy as associations that are interested in social profit, at the same time recognizing their role as instruments of diffusion.
The increase of interest in the managerial world for the activities of non-profit-making organisations is recognition that the invisible hand should not be interpreted as though when looking out for one’s own interest general interest is improved. It is discovered that looking for the general interest results in the attainment of authentic personal or managerial interest.
The United States is in the lead in private financing for this type of institutions. In Europe, and especially in Spain, it is the State that is burdened with providing most help to these associations, which puts up with less wealth in the environment of free social initiative.
Companies are reconverting their priorities of objectives from a radical capitalist posture towards a more mutually binding and social economy in the long term. The survival of the company depends on it.
This posture indicates that, in the individual conscience, another re-conversion is penetrating from the homo economicus to the homo socialis. The more and more new and varied vital necessities are projected “through the collective coexistence in social necessity, that is organized as a group of means to correct it. The result is that the economic and the social are closely interrelated” (GARCÍA DE LIANIZ, 1988). The market economy becomes the social economy of the market.
This confluence that we are pointing out is of the capitalist private sector as well as of the state sector, towards a private sector of social economy, where social profit substitutes the classic, and where the most human and personal necessities have primacy. This is what accelerates the urgency in Spain for novel dispositions, with a range of Law that clarifies, develops and levels the way to article 34 of the Constitution, in which the right of foundation is recognized “for objectives of general interest” (FIELD ARBULO, 1988).