What is the business of business?

Let me begin by saying I am not an expert on business. I’ve never owned a business. I have managed one, and worked for several, and even been a business analyst – but none of that makes me an expert. I’m also not an economist or a political scientist. So, take the following with as large a grain of salt as you feel appropriate. (My apologies if you already suffer from hypertension.)

When most of us think of the purpose of businesses – to the extent that we think of such things at all – I expect we imagine that said purpose is to produce goods or provide services. These goods and services are priced so that the business owners can recover their costs, and hopefully make some money over and above that. That additional money – a.k.a., profit – provides the business owner with an income, and perhaps allows them to expand their business, and so produce or provide more goods and services. This expansion may require them to employ helpers. This is a pretty simple, perhaps overly simple, description of what the business of businesses is. It’s likely an apt enough description of the business of many very small businesses. Piano tuners, bobcat operators, bakers, and so forth.

Of course, not all businesses are small, and the business of many businesses has become the generation of profit pure and simple, and any production or provision of goods and services is really incidental to that. When you think of very large companies, they tend to have many diverse ‘lines of business’. These may include everything from breakfast cereals to herbicides to life insurance, or the transportation or sale of such. The ownership of such large enterprises tends to be very diverse, such that some of the owners are also companies – hedge funds, pensions, etc.

Neither of these types of business has any necessary relationship to or dependence on political or economic systems, such as democracy or capitalism. Businesses existed before either of those were formalized. They can exist in fascist or communist countries just as easily as democratic or capitalist ones. Democracy and capitalism may or may not be good things, but they have little bearing on the success or failure of businesses.

Even profit does not have much to do with politics or economics. People made a profit centuries before capitalism or democracy, or any of their modern alternatives, existed. I’m fairly certain they will continue to make money, or whatever signifies wealth, in whatever systems come afterwards. I’m not even sure that profit for profit’s sake is really all that new. There have always been frauds, conmen, forgers and hucksters – and others – whose motives had more to do with greed than anything else.

 

There is nothing necessarily right wing, conservative, reactionary – or whatever term you prefer – about business and profit. They are not incompatible with progressive, left wing, or even socialist regimes. (The same thing goes for taxation and government spending, but I’ll leave that for another time.) You can be right wing and an enemy of business, for example, by implementing immigration policies that make it difficult for companies to hire workers, or by taxing necessary imports. In the same way, you can be left wing and supportive of universal health care or child care programs that may contribute to increased productivity. There is nothing necessarily progressive about making it difficult for businesses to succeed, just as there is nothing necessarily conservative about keeping wages low.

But all of this begs the question, what is the business of businesses? Is it just about profit, and the maximization of profit? Or is it about producing goods – bread, say, or books – or providing services – music lessons, or project management? My personal preference, of course, is for the latter. For true entrepreneurialism – or what I like to think of as the real deal – and enterprises with a human scale, and a human purpose. Am I wrong? Is bigger really better?

If there are any experts who read this, maybe you can let me know.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s