What are the benefits of business to society?

  • A community works to protect itself and its members. It does not need businesses, but they usually do have businesses.

    A society is much more loosely connected group of people who live socially together without a common goal. Societies are almost exclusively bound together by money.

    Business is what turns a community into a society.

    This is bad in the sense that the member of a society’s goals are mixed and there is no guarantee that an individual has the benefit of the society as a foundation of his goals. Indeed it is quite rare even in people who actually work for the society. So you lose the close mutual support of a community.

    This is very good in a different sense. In that societies can grow to be much bigger. It extends the reach of cooperation, so much so that we now have a global society. One of my goals is to help reintroduce the community back into to the Global society.

    We now have billions of people all working and living together mostly peacefully. By far the vast majority are all doing good for the society. It is in their mutual financial interest to do so.

    This is the result of business. It is the money that is paid to businesses that keep them operational. The money is paid for a service or produce.

    For the business to stay in business it must not charge too much otherwise competitors will take away their business with cheaper prices.

    They must not charge too little otherwise they will not be able to pay their staff and their staff will leave to competitors who pay more.

    It is a constant balancing act, where the owner can only take so much out for himself before the business will struggle to keep either its customers or its staff.

    The business pays it workers so they can buy products and services from other businesses. So the money from one business feeds another through its employees. It also uses services and buys products from other businesses. So businesses also feed other businesses directly.

    One of the huge steps towards the Global market is that of delegation and specialization.

    For example, one business, a farm, grows the food, a product; a second transports it to a wholesaler, a service; the wholesaler with huge storage facilities mixes the farms produce with other goods and stores them as long as needed and only as long as they need to, this is another service; The wholesaler then uses another transport supplier to deliver a mixture of goods to lots of different shops; The shops then sell the goods to the people and other businesses.

    All of these businesses need bank accounts and payment mechanisms between them. This means business can specialise and be very good at one job. This is also true of people who work for the business. Specialization makes for a team that can do far more than an unskilled worker could because they all have different skills.

    The second globalizing factor is the mega corporations. Sometimes it becomes cheaper for the shop to own the farm the trucks and the ware houses.

    For example Morrison’s in England are a super market chain owning many shops selling a wide range of products. However all their food products they grow is grown on their own farms.

    This ensures that farmers get a good wage for what they are doing and it means they can manage the food better and have better understanding of the unpredictability of the weather on crops so they can manage bad crops and bumper crops by freezing any surplus food on good years for sale in bad years.

    The lorry drivers and coordinators are all managed centrally and the ware house could be run by robots. As each step in the process is combined there are less transactions going on and so smaller bank charges. As a combined business it only needs one HR department it means there is an economy of scale on administering all these employees.

    The last step in the global market is private and company pensions. People are advised to save money for their old age. Most pension funds schemes invest their money in the stock market. As it is the best return on your investment.

    This means these mega companies are usually owned by the pensioners who have invested their money over the years and so the owners of the companies are no longer private individuals but indirectly the public. So the money that was siphoned off from the business by the owners is now going straight into the publics pocket during retirement minus a small commission.

    The good result of business is that we have global cooperation.

    The bad result is that cooperation is based on money and so the relationships are only stable until somebody out competes you, either for your business or your staff.

    In a community all relationships are based on Trust

    In a society that foundation of trust is not there.

    I want to reintroduce it. This is one reason why Quaker businesses did so well because they were run as a community and it is also why cooperatives in general do well.

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