Is The Business Of Business, Business?
Do we want to live in a world in which money is its own reward?
Copyright © 2002 Dorian Scott Cole
The old saw was sung through the 20th. Century, and into the 21st. that, "The business of business is business." It seems to be one of those facts that can only be so self-evident that it is beyond challenge. But we are now seeing the fullfilment of the promise implicit in that guiding principal. The fulfillment is called Enron, Tyco, WorldCom, and some may be surprised to see added to that list a host of retail chains who focus only on price... and also several years of economic overreaching by investors in the stock market. These reflect the authors of that old saw, and unfortunately in it we meet the problem.... us.
I'm a business and capitalism oriented person. Experience shows that these systems work better than other systems (until a better system evolves). Individual and collective initiatives, competition, investment - these have definite advantages. I depend on investments for retirement. I buy at bargain prices and make my money go as far as possible. I'm not speaking against these things, but fine-tuning is necessary for guidance to prevent things from spinning out of control.
What has happened to us? Business has always sung the "Business of Business" song, but in the '80s things really began to spin out of control. A new star was born, the superheroes who found a mission in saving the corporation and the investor... supposedly. This was the take-over man who gained control of corporations and then eliminated any weaknesses and sold the leaner and meaner corporation for a nice profit.
A new way of thinking was evolving. The best way for investors to be protected was for investors to be involved. It didn't have to be through a take-over man, or even through the board of directors. No, individual investors, the ones with enough investment so that they could claim control, could become involved in the day to day operations, thoroughly investigating every aspect of the business and actually dictating what the company was to do. Companies had a new task-master - the day to day oversight by the investor and the quarterly profit sheet. Short term gains, long term destruction.
Companies supposedly made more money. The aftermath in lost jobs, high pressure work environments, and damaged communities was irrelevant to the short term investor. The idea was forced on many businesses since the influential investors had the trump card, money. It wasn't long before major corporations capitulated and sang a new saw : "The business of business is making money for the investors."
Well, the people with influential money can demand their tribute. But when you look at the results : frequent job and income loss, continual corporate upheaval, damaged communities and lost dreams, Enrons and WorldComs, you realize that business has not been influenced by a well-meaning guide, but has had the best sucked out of it by a self-serving parasite.
Before we get out the spray, and start eliminating parasites, we have to remember that we are the investors, and the parasite is really us.
In some ways the model works well. Efficiency gains create profit and investments look healthier... but often, rather than from economies of scale, instead profit comes at the expense of the people involved : Low wages, no benefits, job loss, overwork, mind-numbing jobs, community loss, and impact on the buyer in the form of loss of customer service, loss of quality in products...
The corporations of the late 1800s and even into the middle 1900s effectively owned the people who worked for them and turned them into slaves who were given dangerous work and were often overworked. They drove their people maniacally and many died while the industrialist owners got rich. Do we want the kind of world in which there are a few task masters at the top demanding more and more and more? Or do we want businesses that reflect grass roots interests?
While there is always the chance for businesses to become geographically unfettered and financially lucrative, most businesses have fundamental reasons for being that have roots in the world of real people. They are usually formed by people with ideas that help other people, by people who like doing those things, and which support their families and their communities.
We need to clarify our supposition of what business is for. The business of business is really whatever we want it to be, and we need to see ourselves in the picture. Today we invest our savings and retirement money in the stock market, and we cheer when we get 12 to 15% annual returns. And then we go to our favorite superstore and buy our products for the lowest possible price. Caught in the middle are the people who are running the businesses and creating the goods and services. Oops, that's us, too. We demand the most $ return, we demand to pay the least, and the person who gets stabbed in the back by both is simply us. The only people making big money are the superheros who control the corporation.
The days of the stodgy local company which can't or won't change are probably over. Adapt or die is a clear footprint in the steady march of progress that continually makes our world a better place to be. Companies have to learn how to change and how to diversify or new products and market pressures will eliminate them. The market is international and instantaneous. The market and competition are ubiquitous. So is the parasite. In an unrestrained system, it isn't dog eat dog. As parasites we eat ourselves and each other.
What do we want? Is money its own reward? Are piles and piles of paper with $ printed on them of any real value? Money has value only when it can accomplish something. People and corporations earn money to accomplish things. We have to complete the statement, "The purpose of business is to earn money..." For what, to have piles of paper? No. Business earns money so that people can accomplish what they want.
What do we want? We want jobs that stay in communities and support families, that support family and dreams, that provide work venues for those who aspire to certain types of work, that create expansion capital, and that pay investors.
What kind of world do we want? It depends on two things. One, what we tell ourselves. We've told ourselves the saw for too many years that the business of business is business. We need to tell ourselves what business really is. We get what we "saw." Two, when we decide what business should be, we need to take control of our lives and make that happen. We have to remember, we're not just the people caught in the middle, we are also the people putting the pressure on both ends.
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