The most effective use of natural resources is reduced when an overemphasis on profit leads to uneven development of these resources. Development based on policies which promote monopolistic control further reduces use of natural resources. Reduction and ineffective use also occurs when resources are most accessible and are extracted without any responsibility being assumed for their depletion.
The capitalist profit motive necessitates an excess demand bolstered by advertising. The excess demand will only be promoted for certain goods (those which return the fastest profit) so that some goods which are necessary may be in short supply. In the USA, for example, all-industry returns have recorded average of 11.5%, with the top performers including Chrysler (69.7) and Subaru of America (35.8), but also the Student Loan Marketing Association (43.0), and Pulter Home (36.5). Cars, education, homes and food (Diversifoods, 68.2) are priced to extract every cent of possible profit. The profit motive does not take account of the long-term availability of resources, which may be ruthlessly exploited while they remain at a low price, later creating scarcity and economic instability. Speculation by investors and financiers may create artificial shortages to increase profits, thereby causing inflation.
2. Businesses tend to stress the importance of immediate financial performance and shareholder returns. Other stakeholders in an enterprise, such as employees, customers and suppliers, are treated merely as a means to an end. There is a need for greater trade-off between the various stakeholder groups. The bottom line does matter but on its own it is not the best guide to performance. Many in business have been educated to believe that short-term, power-based relationships with stakeholders are the route to competitive advantage. But there is a better model, which is in harmony with capitalism, which takes account of long-term relationships with stakeholders and society. This represents a superior route to competitiveness.