What Is Wrong With Businesses?

Column 2017-1

     During the recent election campaign politicians and others
devoted many words to the subjects of businesses and jobs.  If
you found it all confusing, don't feel alone.  It was bad enough
that the speakers disagreed with each other.  Far worse, some of
them couldn't utter two sentences without contradicting
themselves.

     The primary purpose of work is to produce things people
want to use.  Businesses and jobs aren't ends in themselves. 
Both are only means of producing consumer goods, including
services.  If an enterprise, whether a business or some other
entity, doesn't produce something of value to consumers it has
failed.  This failure wasted resources that could have been better
used to produce value.

     The ultimate mission of a business is to earn profits. 
When we have freedom in the marketplace there is only one way
for any business to earn profits.  The business must create value.

     The business buys resources, including human resources.
The business sells its products.  If the business sells its products
for more than its resources cost, it has created value and earned
a profit.  If the opposite happens the business has destroyed
value and suffers a loss.  In free markets the business must soon
find a way to create value or else end up on the rocks of
bankruptcy.

     Consumers have the final say on how valuable the
products are.  Businesses must please their customers or perish. 
Businesses may disappoint their customers.  Those disappointed
customers aren't a good source of future sales.  There is a reason
why con artists don't work the same neighborhood twice.

     Consumers acting in free markets weed out wealth
destroying enterprises while rewarding and encouraging
expansion of wealth creating businesses.  This process is far
more efficient and effective than anything politicians and
bureaucrats can devise.

     For so long as consumers are free to choose in the
marketplace, businesses can't make a career of ripping off
consumers.  Only when consumers lose the freedom to choose
can businesses endlessly rip off those customers.

     Only "do it my way or I will hurt you" government can
empower businesses to exploit customers.  Many businesses
today are ripping customers off.  The ripoffs are possible only
because licensing laws and a swamp full of regulations protect
politically connected businesses from real competition.

      The "occupy Wall Street" crowd made a valid point
when they claimed many big businesses were thriving on ill
gotten gain from exploitation.  They went completely off the
track with their proposed solution.  More laws, regulations and
bigger government weren't the answer to a problem caused by
too many laws and too much government.

     The only reason businesses grow "too big to fail" is that
government protects them from competition and bails them out
when they grow too big to succeed on their own.  The real
problem is crony capitalism where government and big
businesses conspire to take care of each other at the expense of
everyone else.

     Inefficiency, waste and exploitation are always on
defense and fighting losing battles when businesses are free to
produce as they see fit and fully depend on satisfied customers
free to reject any and all products.  The same formula works
equally well with non business enterprises.  Yes, government
schools, I'm looking at you.

aldmccallum@gmail.com
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Copyright 2017
Albert D. McCallum