Liberals trying to demonize ‘profit’

It’s been weeks since the U.S. Supreme Court handed down its decision in the contraception-mandate case Burwell v. Hobby Lobby, but the pace of urgent fundraising appeals has barely slackened. Several times a day, another pops up in my email inbox. Some are from politicians; some are from advocacy groups; some are from various organs of the Democratic Party.

So far, the number of emails accurately describing the decision is, as my physics professors used to say, arbitrarily close to zero. But there’s one underlying fact they all get right: the justices ruled in favor of a “for-profit” employer. This little hyphenated term appears in email after email, suggesting that it’s the for-profitness that creates the perniciousness.

Now, don’t worry. I’m not going to use this column to add to the flood of arguments about whether Hobby Lobby was rightly or wrongly decided. What interests me is why exactly fundraisers believe that including the term “for-profit” will raise the ire of their contributors.

The only reasonable interpretation is that the fundraisers believe - or believe that their targets believe - that there is something wrong with profit, that the proprietors of a for-profit firm are less admirable than those who run companies pursuing other goals. True, the various religious universities whose lawsuit challenging Obamacare’s contraception mandate will be before the Supreme Court next year certainly have their critics, but they somehow don’t manage to excite the same degree of disdain as a profit-making firm. And although the National Organization for Women gamely included the Little Sisters of the Poor in its list of the “Dirty 100” seeking exemptions from the mandate, all it garnered was well-earned ridicule.

That’s why the fundraisers have been so careful to remind their targets that Hobby Lobby is a for-profit company. They are hinting that profit is different from other motivations. Less noble. Maybe even wicked.

A small story: A few years back I was at a reception for the opening of a new play. The TV in the corner was tuned to one of the news channels, and the anchor was saying that one of the oil companies had just announced record profits. The response among the attendees was .?. . anger. Somebody said that such profits shouldn’t be allowed. Another voice chimed in to suggest that the company should be punished. Yet another summed up the reaction: “They should be in jail.”

I didn’t do any political polling, but I’m willing to bet that the people at the reception represent the target audience for those fundraising emails - people the mere suggestion of profit sends into a frenzy.

I really don’t get the profit-is-evil meme. It’s true that Aristotle famously argued that selling goods and services for profit was unnatural. But I’d like to think we’ve reached a point in our ethical evolution when we can all agree that he was wrong. Profit is a signal to financial markets that helps businesses raise capital. Higher profits mean higher tax revenues. Stocks rise, raising the value of individual retirement accounts. Absent monopoly, or other forms of illegal activity, profit would seem to be an unalloyed social good. Not by any means the only or chief social good - but certainly an important one.

Yet the intrepid anti-Hobby Lobby fundraisers are on to something. The anti-profit instinct not only continues to exist, but actually can guide policy.

Consider the contretemps in 2010, when the Labor Department issued new rules requiring that interns should generally be paid for their work. But not all interns. The Fair Labor Standards Act explicitly exempts some unpaid work - for example, volunteers at food banks - but the Labor Department decided to add more.

The department, according to its own guidance, “also recognizes an exception for individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to nonprofit organizations.”

Lest the point be unclear, the department adds: “Unpaid internships in the public sector and for nonprofit charitable organizations, where the intern volunteers without expectation of compensation, are generally permissible.”

Again, we see the peculiar anti-profit dynamic at work. Intern A and Intern B do identical work, but Intern A does it for ?a corporation organized for profit, and Intern B does it for a corporation organized as a ?nonprofit. Intern A must be paid, Intern B need not. This is so even when Intern A is volunteering at her godfather’s struggling used car dealership and Intern B is volunteering at his godmother’s foundation with its $20 billion endowment. And then there’s Intern C. Intern C, whose parents give lavishly to politicians, secures a spot at a federal agency with a budget of $100 billion - and also can go unpaid.

Or consider that the Federal Communication Commission’s do-not-call list does not restrict fundraising appeals from nonprofits. According to the FCC, the list was established to enable us to enjoy time at home without interruption from pesky unwanted calls. The theory must therefore be either that calls from nonprofits are less annoying, or that nonprofits have a special right to annoy that for-profits lack.

One could certainly make a strong case that that no one should have the right to make a telephone solicitation call without my consent. And one can certainly make a strong case that no firm should be allowed to have interns unless they are paid. But what principle allows distinctions in these rules according to whether a firm does or does not honor what is known as the “nondistribution” rule - that is, that the excesses of revenues over costs must not go to owners or patrons? The answer is obvious: for-profit is bad, not-for-profit is good.

All of which brings us back to Hobby Lobby. Certainly one can make a thoughtful argument against the result. But despite the best efforts of the dissent, and of many scholars, it’s hard to make a persuasive case that the exemption line should be drawn at profit.

Indeed, for the fundraisers to contend that the great wrong of Hobby Lobby turns on the happenstance that the plaintiff is a profit-making entity is to elevate an applause line into an argument. That might be a good way to raise money, but it’s a terrible way to do democracy.

Stephen L. Carter, a law professor at Yale University, is a columnist for Bloomber View.