"The desire of corporations to maximize profits creates conflict with the general welfare of the nation at large. "Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your o

The fundamental theory of capitalism states that corporations should operate to maximize their shareholders' value, which can be accomplished one way by maximizing their profits. The above statement is too strong because corporations who maximizes profit do not necessarily cause conflicts for society. Corporations profits are passed through to shareholders who then invest their profits to create new companies. This perpetual cycle is positive and necessary for the nation to progress forward economically.

In the bare minimal, a corporation needs to generate enough revenue to cover it's cost of operation, including fixed costs such as rent and equipment and variable costs such a labor. Additionally, in order for a corporation to stay competitive in its respective industry, it must make continual investment in its equipment, research or people. For example, drug companies invest significant amount of money in research and development in order to stay ahead of their competitors. However, the cost of research and development is not free, and a corporations must raise capital to cover these costs from shareholders and investors. For shareholders to invest their money, they must be guaranteed a positive return. Therefore, in order for a corporation to sustain long term, they must earn a profit.

Furthermore, many corporations with excess profits oftentimes gave back to their community. For example, many global corporations, such as Microsoft, have launched numerous non-profit ventures to help communities in need. Microsoft, partnered with the Gates Foundation, strives to improve the quality of education in the US, as well as other nations. Thus, a corporation can maximizes profits and at the same time increase welfare of the nation at large.

However, there are small sample of corporations that maximize profits at the expensive of the general welfare. For example, a company that has a monopoly on a market can implement policies that conflict with the general welfare of the nation. For example, before electricity companies were regulated, the electricity prices were atrociously high and prevented large number of people from gaining access to electricity. Luckily, most nations have passed laws and established government agencies that serve to regulate companies to ensure fair practice and protect the welfare of the nation at large. A delicate balance must exists between a free market and government regulations. If regulations are too heavy and onerous, it can stymied corporation growth and be detrimental to the welfare of the nation.

Consequently, in the spirit of capitalism, corporations should continue to maximize profits for their shareholders as long as the proper regulations are set in place.