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

Jennifer Hinton

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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.

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