But is profit always a sign of harm? Isn’t it often, actually, a sign that value has been created?
In a normal exchange, both sides can choose. I pay because I would rather have the product/service than the money. You sell because you would rather have the money than the product/service. Both participate voluntarily and both benefit. Otherwise, the exchange doesn’t happen.
Profit is what you get when you turn scarce resources into something people genuinely value, without wasting too much along the way. In a functioning market, it is a signal that resources have been organised into something useful.
Of course, some profit is ugly: monopoly power, insider advantage, regulatory gaming and corner-cutting. Each of these should be constrained. But it is lazy and dangerous to take the worst examples and declare the concept itself immoral. That is how we end up defending not public services, but the stagnation of failing systems.
Back to charter schools. The implied claim is that if a school makes a surplus while receiving public funding, someone must be getting short-changed. But who, exactly?
If students are learning more, if parents choose the school freely, if the cost per student is competitive, and the school is accountable for outcomes, where is the harm? If outcomes improve and costs are competitive, the question should not be “who profits?” It is “who benefits?” I suggest we all do.
The real question is whether the public gets value and whether the provider can be held to account. That means transparent contracts, measurable outcomes and the ability to close models that fail.
We have built an odd moral culture around public services in which the only acceptable motive seems to be selflessness. If you serve the public, you must do it with clean hands, modest pay and ideally without ambition. The moment you build a model that can scale, invest, improve and grow, suspicion sets in.
But services cannot sustain themselves on virtue alone. Our society needs mechanisms that reward what works and reject what fails. That is what profit and loss can provide. Loss tells us resources are being wasted. Profit tells us we have found a better way.
Remove these signals and you do not get virtue. You get stagnation. You get bureaucracy that survives regardless of performance. And the people who pay the highest price are those with the least ability to buy their way out. As is almost always the case, the poor suffer first.
It is not only charter schools.
Taxpayer dollars spent purchasing private health capacity are treated by many as an ideological betrayal. Private capital helping to build infrastructure is condemned as families being fleeced by corporate interests.
Yet if the public system is overwhelmed and contracting additional capacity reduces waiting lists and prevents deterioration, opposing it purely because someone earns a margin is not “moral”. It makes posturing more important than patients.
The same is true for infrastructure. Partnerships with private capital are condemned as selling out. Yet the alternative is often delay, decay, and costs that fall hardest on ordinary families: the parent stuck in traffic, the worker losing hours to a stalled commute, the small business paying for inefficiency in time and fuel.
A “fixed pie” intuition shrinks our imagination. It trains us to see the economy as zero-sum: something to fight over, rather than a field in which new value can be created. Prosperity is a positive sum, built by increasing what there is to share.
This is what I hope my new, profit-hating friend from the backyard barbecue learns: capitalism, rightly understood, channels self-interest into service. To earn profit in a functioning market, you must meet real needs. You must persuade, not coerce. You must offer something better, cheaper, safer, faster or more useful than what came before.
None of this means markets should be unbounded. A civilised society sets rules against fraud, harm, exploitation and monopoly. But it does not need to treat profit itself as dirty. It needs to distinguish between profit earned through value and profit extracted through power.
If we cannot make that distinction, we will keep choosing decline. We will defend systems that fail because at least nobody is seen to be succeeding too much. We will mistake stagnation for virtue.
Profit can be a solution, rather than a failure, if it is tied tightly to value, accountability and service – because at its best, profit is not the price we pay for a better future. It’s how we know we’re building one.
Disclosure: Jonathan Ayling is the executive chair of the Altum Academic Charitable Trust, a not-for-profit incorporated charitable trust that owns the charter school Altum Classical Academy in Wilton, Wellington.
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