i've always wondered why someone hasn't started a non-profit business to start selling goods and services, in which they should be able to out-compete the for-profit enterprises, since they can sell at cost just to break even, or sell at less of a markup.
you could get one going, then use what would be the "profits" (since you can't keep them) as seed funding a second similar non-profit in a different industry, then a third, by then the 2nd one could seed fund a fourth, and so on and so on until eventually, you would have expanded into every industry. and over time, since you can always out-compete the capitalist, you would have monopolized every industry with non-profit enterprises.
depending on how you structured it, you could stipulate some kind of collective social ownership, or each industry could be run as a non-profit worker cooperative with workplace democracy.
i am sure there are a thousand little reasons why this might fail, but i don't see any big gotcha? it seems like a sound idea. i guess maybe the capitalists would be willing to run at a loss to try and stop you, but that's still a good outcome? maybe try to make it illegal? i am not sure how you could make it illegal to sell good and services at break-even prices. price controls, ok fine, we will just have more money for seed funding.
i guess TLDR the ability to run a not-for-profit business seems like a pretty big weakness for capitalism.
If you are just literally breaking even, then no you would never have any capital. In a non-profit, it can take on a slightly different meaning. If you include growth as a business expense, then you could still have no profits but still have accumulated surpluses. The way you would be able to out-compete the capitalists is by running smaller surpluses than they run profit margins. It's a bit of an unusual way to think of a non-profit, which you usually think of in terms of donations rather than sellings goods and services. (a few big exceptions that come time mind are some hospitals and universities)
A higher production cost isn't necessarily prohibitive if you are offering higher-quality goods and services, or can market them in such a way that consumers will pay a premium for them, or such that workers are willing to accept a bit less pay in exchange for the "perks" of being part of a non-profit worker cooperative.
Well, they keep getting richer because they are keeping a big chunk of the labor value you create for themselves. The worker cooperative model eliminates that, and allows the workers to keep all of their labor value. Adding "non-profit" to the model means than they no longer keep all of the labor value, they are accepting a market rate of pay (which is less than their labor value), but the surplus, rather than going to a capitalist as profit, would be going to a non-profit fund chartered to expand other non-profit worker cooperatives.
There could be some capitalist rent-seeking if you decided to take out loans or issue bonds, in the form of interest paid back. But that would only be necessary to get things going. And it might be rough-going at first, but I think once you had some successful enterprise up and running, and you have put back a reasonable fund, or if you got lucky on some kind receiving some kind of endowment from some dying rich guy facing a crisis of conscience, you are in pretty good territory. Even if your 2nd enterprise fails, you can regroup and try again. Nothing is really lost by trying except the jobs created, since there is no real "investment" in the first place, just opportunity cost. I think the key would be to start in a service sector where it's mostly labor, not a lot of capital (no brick and mortar stores), like some kind of online services, or selling art (whether that's commercial art or developing a video game, etc.) You might even initially fund it through some kind of kickstarter type of thing.
But once you had 2 going, then you can start benefiting from exponential gains, as both enterprises then could start working on the revenue to fund new enterprises, so you'd have 4, then 8, then 16, in just a few generations of expansion, you could really make a dent, even with a high failure rate. If you ever got to the big leagues where you had 100's of millions or billions in your funds, you could start buying out capitalist enterprises and converting them to your model, or buying up controlling shares of a company and converting them. And that's another thing, non-profits can own investments in capitalist enterprises. So you could just buy financial instruments to grow your seed fund. Hoist capitalism on its own petard, as they say.
It's not so different from the idea of a social wealth fund, except instead of being funded by the government, it's funded by the workers doing jobs they'd need to have anyway. It's not doing away with capitalism, but rather exploiting capitalism. Even if you took over 100% of enterprises, you would still have a capitalist system, just with all the capital owned by a non-profit NGO's rather than capitalists. Maybe a kind of market-syndicalism? Not ideal, but better.