MBAF 503 Economics Case Study: Volunteering in a Capitalist Economy

This economics case study examines the impact of a capitalist economy on volunteering, particularly within Canadian non-profit organizations. It addresses the declining volunteer numbers due to the incentive of profit maximization in capitalist structures. The study discusses how the replacement cost of volunteers is factored into GDP calculations and highlights the limitations of this method in capturing the true value of volunteer work. It suggests potential solutions, including government intervention and improved volunteer management frameworks, to revitalize volunteerism in the non-profit sector by offering both economic and non-economic incentives, as well as better utilizing the talent and ideas of volunteers.

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Author Note

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Table of Contents
Answer 1....................................................................................................................................2
Answer 2....................................................................................................................................2
Answer 3....................................................................................................................................3
References..................................................................................................................................5

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Answer 1
The capitalist form of market structure is one of the most eminent and widely
observed form of economic framework, where the productive resources and capital goods are
all owned by the private businesses and individuals and they utilize these scarce resources to
produce different commodities and services based on the demand and supply existing in the
free market. In this context, the concept of “Pure Capitalism” indicates towards the form of
capitalism in an absolutely free market or laissez-faire system of capitalism, where there
remains no constraint on the individuals in the aspect of where they can invest and their
choices of product and services which they want to provide and also the price levels at which
they decide to provide the same (Przeworski, 2014). Evidently, this in this form of free
market economy, individuals produce with the sole incentive of profit maximization.
Keeping this into consideration, if Canada becomes a Pure Capitalist economy, then
the owners of the resources will work with the incentive of maximizing profit. Given this
situation, more eligible working population will shift from being volunteers in non-profit
organizations to being paid workers in these lucrative profit-maximizing Capitalist
organizations. This will primarily happen because of presence of financial incentives in the
profit-oriented organizations in the Capitalistic Framework of the economy (Drucker, 2013).
Thus, the number of the volunteers in these non-profit organizations are expected to decrease
in the capitalistic construct in Canada, which in turn is expected to have considerable
negative implications on the non-profit organizations as they mostly rely on the efforts of
their volunteers than that of paid workers for their activities.
Answer 2
In the economic framework, the Gross Domestic Product of a country for a particular
period is measured by summing up the values of all the goods and services which are

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produced in the geographical boundaries of the same within that particular period of time and
the GDP is widely used as one of the primary indicators of the economic growth of the
country. However, not all the values of all goods and services produced and consumed in the
economy can be cardinally measured as many of them are not marketed in the economy. In
such cases alternative measures are used to incorporate the same and their values in the Gross
Domestic Product of the country (Kubiszewski et al., 2013).
In this particular scenario, the activities of the volunteers in the non-profit
organizations of Canada not being marketed, cannot be directly taken into account in the
calculation of the GDP of the country. Therefore, to incorporate the same, the replacement
cost of the volunteers’ activities is taken in GDP, which shows the amount of cost which had
to be experienced by the non-profit organizations of the country, if they needed to replace the
volunteers with paid workers (Vsi-isbc.org 2018).
However, this method does not succeed to accurately measure the real value of the
efforts of these volunteers in the non-profit workers as many of the components of the
activities performed by these volunteers are ordinal and non-measurable (Mankiw, 2014). For
instance, the concerned method can measure the economic outputs of their efforts in terms of
the market value of goods and services produced by them but cannot take into account the
emotion and motivation or the personal attachment with the organizations or the cause (which
are mostly social and public welfare related), which encourages these people to volunteer,
often free of cost.
Answer 3
From the present situation, as can be seen to be depicted in the concerned article, in
the recent period, the non-profit organizations of the country have been facing the problem of
a stark decrease in the number of volunteers, who have been the primary workforce in these

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organizations and primary cause for their success. The primary reason behind this decrease is
the fact that the country has been increasingly becoming a Capitalistic economy in the
contemporary period (Anheier, 2014). Due to the same, the workers are getting more
motivated to work in the profitable commercial and private organizations to maximize their
own economic benefit. Less interest prevails in the social and non-profit areas due to the
increasingly pro-capitalistic environment in which more private owners of productive
resources are concerned about their own profit maximization and are also attracting a
significant share of the population to become paid workers.
In this context, the only way to bring back the initial high number of volunteers in the
existing non-profit organizations in the country is by intervention of the government of the
country as well as by provision of a better framework for recruiting the same within the
organizations. While facilitation of incentives to the volunteers (which can be non-economic
like acknowledgements of their efforts as well as economic as provision of subsidies and
economic benefits in their everyday lives) should be taken up by the government of the
country, building a proper volunteer management framework, motivating the people and
encouraging people and utilizing the talent pool of the volunteer and effective utilization of
their ideas have to be taken up by the non-profit organizations (Butler & Wilson, 2015).

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References
Anheier, H. K. (2014). Nonprofit organizations: Theory, management, policy. Routledge.
Butler, R., & Wilson, D. C. (2015). Managing voluntary and non-profit organizations:
Strategy and structure. Routledge.
Drucker, P. (2013). Managing for the Future. Routledge.
Kubiszewski, I., Costanza, R., Franco, C., Lawn, P., Talberth, J., Jackson, T., & Aylmer, C.
(2013). Beyond GDP: Measuring and achieving global genuine progress. Ecological
Economics, 93, 57-68.
Mankiw, N. G. (2014). Principles of macroeconomics. Cengage Learning.
Przeworski, A. (2014). The state and the economy under capitalism. Routledge.
Vsi-isbc.org. (2018). Johns Hopkins Comparative Non-profit Sector Project. Vsi-isbc.org.
Retrieved 15 April 2018, from http://www.vsi-isbc.org/eng/knowledge/hopkins.cfm