"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

My memory about the financial crisis is still vivid. Even now numerous people are still suffering from this unprecedented disaster and feel traumatised by the sense of helplessness and the risk of losing their home. Many critics blamed this crisis on business magnates for chasing profit maximization regardless of ordinary people’s life. By now, after more than a decade has passed, economists and scholars are still struggling to validate their various hypothesis on the root reason behind the crisis. To my own perspective, the causes to the economic crash were never as simple as the companies’ insatiable desire to maximize profit. On the contrary, as a fanatical reader of the Adam Smith’s magus opus-- the Wealth of Nations, I agree with him on the idea that rational and self-interest of business runners are more likely to be the catalyst for social prosperity than the friction to promote public good.
It may seem contradictory to most people at the first sight that willingness of companies to maximize profits create social benefits, if not doing any bad. Before I continue this seemingly implausible argument, it is necessary to clarify a common misunderstanding about the ideology of prestigious corporations to maximize their profits. Majority of people believe that all the entrepreneurs concern about is to make as much money as they can, which is unfortunately true to some extent. However, by doing so, they cannot be spellbound by immediate interests but needs to take their reputation and culture into consideration to attract more investors and potential customers in order to gain long-term benefits. Only by this mean can a successful company retain all the benefit for its stakeholders, which include not only the business owners and employees, but also the customers as well. As a consequence, any self-interest businessman shall not share the same philosophy with the greedy protagonist for Wall Street, Gordon Gekko, Greed, for lack of a better word, is good
Take unfair trade as an example. Not a long time ago, soft drink giant, Coca Cola, was enormously affected by the revelation that their factories in El Salvador used canes harvested by children. Since exploiting child labour deviates from humanity that our society values most, and does inconvertible hazard to the young generation, it is traded as a significant element of unfair trade. It seems like a waterproof example of the conflict between money-thirsty companies and social welfare, right? However unbelievable it may seem to be, the story ended up in a quite opposite direction. As this news immediately invoked people’s negative reflection and largely damaged Coca Cola’s reputation, the company promptly established an auditory system called ‘Soccer Ball Pre-Certification System’ to identify pre-certify compliant suppliers. Moreover, it pushed the step even further, enforcing effective monitoring systems to verify that labour conditions all over the world. This rigid issue also aroused other multi-national companies’ aware to reinforce regulation and supervision and cooperate as a whole to combat unfair trade. All in all, although companies are acting in their own interest, they are restricted from sabotaging the society, even unconsciously, in order to expand customer base and establish brand reputation.
Someone may ask, if Adam Smith’s statement is completely correct that self-interest actually fuels and motivates business runners to benefit the society, then why do social welfare losses still occur, like the sufferings caused by recalcitrant monopolies. Well, his model is based on the assumption of perfect competition, which is only theoretically true in reality. Intertwined with other influencing factors, we need another participant to intervene in the market—the government. Back to our foremost financial crisis example, one of the reasons that those financial institutions acted on behalf of their own interest of profit maximization yet caused social turmoil is that the government or regulation administrations failed to detect the potential hazard. In other word, it is highly likely that such disaster will not happen if the companies are under strict regulations no matter in regardless of whether they were seeking to maximize their profits or not.
In conclusion, I do believe corporations desires to maximize profits don’t conflict with social welfare under certain circumstances, which include regulations and supervision of a benevolent and righteous government.