#12 - The MVO and The MVP

We live in an age of unprecedented wealth and persistent dissatisfaction. Our capacity to create material abundance has never been greater, yet something essential seems forever just out of our reach.

We’ve built an entire world to maximize profit, we’ve blinded ourselves to our inherent worth. Our understanding of Value is Profit’s shallow dialect, leaving us incapable of properly grounding and articulating our desires; and as the contradictions of our profit-driven world become blindingly apparent, we must develop our capacities more urgently than ever. Our individual flourishing and the direction of our collective futures hang in the balance.

What follows is my modest contribution on the topic; distilled to its essence: the future belongs not to those who take the most, but those who give the most while taking just enough.

The MVO (Most Valuable Object)

The MVO is our fully lived human lives. It’s our joy, our laughter and dancing. It’s our flourishing, in principle and in reality. It needs no justification beyond itself. Ralph Waldo Emerson writes: “No law can be sacred to me but that of my nature…the only right is what is after my constitution, the only wrong what is against it.”

The MVO is the root of everything that appears valuable, every object and action. It’s the ultimate end of all economic activity. It’s the first object we must work to sustain, so it anchors everything else we recognize as valuable. It’s also the only thing we’re left with before our death, so it contains the totality of everything which is valuable to us.

The MVO is finite and bounded, intrinsically scarce and non-renewable. A finite living agent can only express a finite number of first-order desires (needs and wants)¹:

• A finite living agent can express a finite number of first-order needs. These are expressions of mere survival. Any living agent must eat and drink, but will only ever eat and drink so much. A bug that lives for a day and a world-devouring demigod that lives for a million billion trillion years are the same in this respect.

• A finite living agent can express a finite number of first-order wants. These are expressions of spiritual freedom, the pursuit of meaning beyond mere survival. The agent might be a child consuming brainrot (or a cat), or a firefighter running into a burning building. But either of these agents will end up having spent only so much time pursuing their priorities, cultivating their commitments, abiding by their attachments.

Yet, our finite existence contains infinite possibilities. In the vastness between who we are and who we might become, our imagination births our flourishing. Octavia Butler writes:

“Consider —
We are born
Not with purpose,
But with potential.”

The MVO is both our guiding star and our inner compass. Our flourishing helps us find our way. We see what truly matters when we recognize our flourishing as our ultimate aim, we transform our naive desires into enduring fulfillment. Psychologist Gena Gorlin writes: “Your life is not a discrete series of means and ends; rather, living your life is both the means and the end…We continue to build our life until the moment we die, and the joy of getting to build it is a big part of our reward.”

As humans, as finite rational agents, we are condemned to freedom, doomed to seek meaning through action, always answering the unanswerable. Our finitude forces us into tradeoffs and commitments - we cannot love everything or everyone, we must take risks and suffer losses, we cannot pursue every potentiality. The particular contingent attachments we develop shape our ethical outlook, forming a practical identity that is uniquely ours. Intentionally or not, the possibility of our flourishing emerges from our choices. We live our lives more fully when we invest deeply in what's important to us, when we experience more joy and happiness, when we are more vividly aware of the delicate textures of our senses. We lose a core feature of our humanity if we fail at the task.

A paradox, an inescapable tension

As living agents, our pursuit of flourishing depends first on our survival. It’s our most fundamental pursuit. Only afterwards can we chase whatever else animates our spirit. The cost of living - food, rent, utilities - sets the lower bound for our flourishing. Unlike other animals who directly secure their survival needs, we modern humans first sell our time for profit, which we use to purchase our needs in the Free Market. For as long as our survival remains intermediated by markets, our flourishing will remain bound to instrumentally pursuing profit. Despite its instrumentality, Profit’s grip on our existence is effectively intrinsic. The Free Market makes it prerequisite to every other pursuit. Profit commands our existence as thoroughly as any end.

It seems that this paradox arises from the general tendency for markets to emerge and expand. Initially, every willing participant benefits from the arrangement, where the advantages of specialized labor and a common currency outweigh the frictions - of distance, imperfect information, or institutional constraints. Where there is trust, trade and mutual interdependence naturally follow. But from the acorn sprouts the oak. The Market’s roots spread ever deeper and wider, its branches reaching into every corner of human activity. What began as trade between villages now envelops the globe. What was once mutually advantageous has become inescapable: survival has displaced flourishing, greed has displaced generosity, Profit has displaced Value.

This remains the capitalist’s greatest unfulfilled promise: we can rest easy, the capitalist says, knowing the invisible hand protects us all. We can indulge our love of lucre and observe the prosperity we create. We can chase Profit, blindly and recklessly, knowing that we’ll do no harm. Yes, they admit, there are some rare cases of unfortunate excess; but look at the flourishing we’ve enabled with the wealth we’ve created. If we keep pursuing Profit, they assure us, we will do more great things.

We accept their apologetics at our peril.

For all their grand promises, our daily lives reveal a simple truth: the tension between Profit and Value is (approximately) a zero-sum trade off. Their battlegrounds are our waking moments, our daily attention. We spend some of our time securing our survival. The rest we devote to what matters, at least in principle. Any time we spend pursuing profit comes at the cost of our flourishing. Yet to pursue flourishing without any regard for profit undermines itself. We leave ourselves vulnerable. We expose ourselves to unexpected shocks, to inexorable change and erosion. Flourishing without profit guarantees that our dreams either never materialize; or, that our dreams crumble to dust, scattered by the wind.

Resolving this paradox lies in understanding how a valuable action can be profitable, rather than for-profit; and, how a profitable non-profit is coherent and virtuous. Profit exists to sustain our flourishing, and best enables our flourishing when it seeks to minimize itself.

The MVP (Minimum Viable Profit)

The MVP is the amount of profit where organizations best serve human flourishing. It’s enough profit to:

• Enable The MVO.

• Maintain financial and operational resilience.

• Scale its positive impact, on both a unit and absolute basis, within natural limits.

• Provide fair returns to its investors.

The MVP is the amount of profit that secures our survival without constraining our freedom. It resolves the fundamental tension between Profit and Value (at least as best as we can manage). Each element of The MVP is justified precisely because it promotes The MVO, both now and for the future.

The MVP is exactly the amount of profit that secures our survival without constraining our freedom. Excess profit undermines mission: inflated prices, complacent bloated bureaucracies, purpose dulled by excess. Insufficient profit threatens sustainability: short-term compromises, stalled innovation, fragile calcified operations. The MVP supports both resilience and purpose.

Getting the amount of profit right is only half the equation. How an organization generates profit - its business model and price metrics - is equally important. Its profit mechanism shapes everything it does.

A price is a signal wrapped in an incentive: the number signals what we value, and how strongly; the metric influences how organizations respond. An organization sincerely committed to our flourishing can still detract from it through misaligned price metrics. Similarly, an organization hellbent on profit will nevertheless detract from our flourishing, even with perfectly aligned price metrics.

American healthcare’s ongoing journey from Fee-For-Service (FFS) to Value-Based Care (VBC) demonstrates this. FFS pays for services instead of results, incentivizes procedures over prevention, creating a fundamental disconnect between profit and patient outcomes. Any organization, well meaning or not, risks undermining our flourishing with FFS as their metric. The introduction in primary care of Per-Member-Per-Month (PMPM) payments tried to correct this distortion. The fixed monthly payment encourages proactive prevention, and rightly treats services as costs rather than revenue opportunities.

When we pay doctors per visit, we signal that visits have value, and we get more visits. When we pay per patient, we signal that patient health has value, but we don’t necessarily get healthier patients. PMPM created its own set of profit-seeking behaviors: from cutting corners to cherry-picking healthier patients to “upcoding” (AKA outright fraud). Medicare responded with corresponding fixes: quality and outcome metrics, risk-adjusted payments, audits and lawsuits.

The issue isn’t with the price metric, but with the organizations it governs - profit-seeking organizations will inevitably exploit every incentive. No price metric by itself can compel an organization to prioritize Value over Profit. Even with corrections and careful design, incentives are susceptible to gaming, to lying, cheating, and stealing. The alignment between Profit and The MVO requires conscious commitment, not external mandate.

Profitable Non-profits

Some weeks ago I stumbled on J&J’s corporate Credo. It’s short, I encourage you to read it. J&J’s Credo explicitly ranks their priorities. Whether they walk their talk is another issue entirely; for argument’s sake, I present no evidence and have no opinion. The Credo states their “first responsibility is [to] patients, doctors and nurses, to mothers and fathers and all others who use [their] products and services.” Next are their responsibilities to their employees and communities. Shareholders come last. J&J’s Credo isn’t a rejection of shareholder primacy, but an ancestor, a vision of corporate purpose that has largely faded from modern memory.

Costco faithfully embodies J&J’s aspirations. Its Mission Statement and Code of Ethics are very similar:

Here at Costco, we have a very straightforward, but important mission: to continually provide our members with quality goods and services at the lowest possible prices. In order to achieve our mission, we will conduct our business with the following Code of Ethics in mind:

• Obey the law.

• Take care of our members.

• Take care of our employees.

• Respect our suppliers.

If we do these four things throughout our organization, then we will achieve our ultimate goal, which is to reward our shareholders.

Costco’s business practices clearly demonstrate their commitment to prioritizing Value over Profit. In 2023, they sold $238 billion of goods at a 10% gross margin, effectively breaking even. Cheaper than your local gym, membership fees were only 2% of total revenues but generated over 50% of Costco’s operating income. They pay their employees well above the industry average and have excellent health benefits, retaining employees at over 90%. Members renew at a similarly high rate. So their flywheel spins: offer quality products at low prices, attract more members, negotiate and pass through better prices.

As a public company, Costco has no choice but to honor its fiduciary commitments, and honor them it has done decisively: the stock is up 50% in 2024 alone, and over 200% since January 2020. But examining their practices reveals an organization operating at The MVP, fulfilling its commitment to The MVO: they maximize human flourishing through minimal markups on quality goods, sustain themselves via modest membership fees, provide excellent wages and benefits to their employees, and provide investors with returns that reflect their excellence. Costco’s example illuminates a path through our fundamental paradox. When organizations conduct their profit-seeking in deference to human flourishing, both can thrive sustainably.

This is the evolution our economic system needs in this historical moment - not a rejection of markets and profits, but their conscious reorientation toward human flourishing. The organizations that embrace this truth will define the next era of human progress.

The future belongs not to those who take the most, but those who give the most while taking just enough.

1. There is an entire out-of-scope discussion of how we arrive at our first-order desires. I go on for far too long about some aspects of this here and here. Agnes Callard’s account of aspiration, and Hegel’s vision for social institutions, are also both central to any account of how we form our first-order desires.