Sustainability as an element of market economy

Sustainability as an element of market economy

CHRISTIAN HOFFMANN, STEFFEN HENTRICH

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LI-PAPER. In a free market participants according to their preferences compete for scarce resources.

Of course it makes sense from a business perspective, care to deal with scarce resources. In a free market, these are expensive, profit-oriented companies to increase their efficiency and, therefore, constantly strive for product and production innovations. Particularly successful organizations are those that are transparent to signals and information from their markets. Openness and innovation coupled with profit orientation ensure economic success and sustainability. Arbitrary or vague goals that perspective the focus on profit and value enhancement donate, however, more confusion, than that they promote sustainable development. Instead of political institutions to make companies, the policy should set appropriate conditions, by protecting property rights to scarce resources and competition play freely.

Experiments, the economic cycle - and therefore sustainable businesses - to invent new, are always associated with the risk that resourceful business leaders to shake off the obligation on income and capital appreciation reference to the interests of any stakeholders, thus undermining efficiency and sustainability of our economic system. Sustainable management requires not primarily political considerations and populism, but a consistent orientation to market signals, an open exchange with relevant partners - and always ready to novelty and innovation. In the spirit of maximizing profits and increasing value of the company.

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