Why do businesses and governments even exist?

When election fever is all the rage, voters ask themselves, “Who do I want to represent me?” The real question they should be asking themselves is, “Who do I want to lead me?” But that’s not a question that usually gets asked.

When choosing to work with or for a corporation, consumers and employees ask themselves, “What is this transaction or tradeoff worth?” The real question they should be asking is, “What can we fairly expect to give and receive given the current circumstances?”

Lions and eagles are both kings of their respective realms in the animal kingdom. But we don’t expect a lion to fly and nor do we expect the eagle to roar. Similarly, we can’t expect a corporation to do what it is not designed to do; and nor can we expect a government to do what it is not equipped to do.

The typical corporation–or any business for that matter–is created to produce the goods and services that its customers need. It is not legally or financially designed to heal the world and make it a better place. Social enterprises have sprung up all over the globe to solve certain societal problems, but these are the outliers of the business world.

A business is not a ‘moral’ entity. It exists purely for pragmatic purposes. It has a bottomline that it must meet or it will go under. Those who work in it, for it or manage it have one job to do: which is to serve their customers. They have goals to fulfil and quotas to meet. When we expect businesses to behave as non-profit entities, we are asking a lion to be an eagle. It is not possible.

If we would like to reshape society, the impetus must come from outside the business world. Every society has its religious institutions, government agencies, non-profit organisations and the like; that are far better positioned to serve as agents for social change. Their purpose is not to create profit, but to manage their resources efficiently.

Can a corporation create social change? Of course it can. But is that its purpose? I highly doubt it.

A business’ purpose is to provide its investors with a fair return. This requires the business to make a profit as well as grow at a reasonable rate. What a business cannot feasibly do, as I discussed in my last article The Stag, is sustain an ever-growing profit pool. It’s impossible for any business to grow indefinitely or infinitely.

What a business can do, as far as the public good is concerned, is provide the tax revenues that service the public interests. This requires a partnership or an agreement of some sort to be reached between the corporation and the government. However, achieving equilibrium between opposing interests and different beasts will forever be a work-in-progress.

As we grow to increasingly require and rely on technology goods for our daily lives; we also have a greater than ever need for the large corporation to meet those needs. No small business can achieve economies of scale without large amounts of initial outlay and manufacturing capabilities. Small businesses, however, are still a necessary component of every healthy economy and are needed to fill the gaps and the niches that big businesses cannot. Small businesses can also move much faster than a large corporation during periods of unprecedented change.

The missing piece of the puzzle is the lack of considered and timely deliberation and negotiation between the business community, the social change agents, and the people who require them for their existence.

First things first, we, as people, need to stop demonising businesses for putting profit first. Secondly, we should elect leaders who prioritise the public good. And lastly, we should let the lion roar and the eagle fly. That is what they were created to do, anyway.

3 thoughts on “Why do businesses and governments even exist?

  1. Interesting question put forth in title! I would like to share my awnser only if you requet me too.

    Are you familliar with Certified B Corporation ? bcorporation.net

    These are ideal sorces of consumer connection for self and my community, I’m not sure if the term “market driven” applies here, but the need seems apparent for both industry and consumer intrests.

    Lately I’m humored by insincere narritives of mission statementes. Could we say instead…

    “Feed all the unicorns poppyseeds, organically grown in Afganistan to benifit wives of the Taliban.”

    At least theres a better ring to it, and about the same level of truth some corporations put forth .

    Liked by 1 person

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