Businesses Do Not Exist to Provide Jobs

If you listen to any politician, the reason we have businesses is to provide good, stable, well paying jobs for the voters.

Absolute nonsense. A business exists for one reason and one reason alone. It exists to add value to the world. A business takes value out of the world. It uses real estate, spending on rent. It consumes people’s time, paying for labor, and creative and administrative services. It uses up energy. It uses or borrows capital (money). Then, if it is an ongoing concern, it adds value to the world. It places a product or service on sale for the voluntary purchase by anyone. Each purchase is a provisional addition to the value the business is adding, until the magic day that the incoming revenue from purchases exceeds the outgoing revenue and the business shows a profit. At that moment the business has added value to the world. Its customers who could have purchased everything it purchased at the same price it paid, or anything else with their money that they desired more, were willing to pay for what it produced more than its costs of producing it. A total net gain of value.

Businesses exist to make us all richer, to offer us more ways to satisfy our needs and wants, to promote innovation (because it requires effort and creativity to produce a profit), and to make the dollars we earn so valuable that countless people think day and night about how to  convince us to part with a fraction of one of them. And we are never required to do so unless we are sure what we get is more valuable than the dollars we give up.

Another way of looking at it is, businesses exist to meet people’s needs and wants. There is no revenue if you do not meet  people’s needs and wants.  Under capitalism, the buyer is king; the producer is a poor naive bowing and scraping. Just look at how powerful companies bow and scrape in America for customers.

Now you may want businesses to provide “good jobs”. What that translates into is you want someone else to identify a need or desire of other people, to devise a thing or service that meets it, to risk capital, effort, and time in setting up an enterprise, to manage expenses so that the good or service produced is something people will buy, to pay the taxes, take responsibility for regulations and laws, etc.

You are not entitled to any of that. If you want to earn money that allows you to buy things you need and want, you need to somehow give value to other people so they will give you their money. A job is simply a way to join someone else’s team in that project. As Peter Shiff says, nobody wants a job, everyone wants money. A job is a avenue to money, but the way to get money from others voluntarily is to do something for them. Do it yourself or join a team but the essence of the project is serve others so that others will serve you.

In the former Soviet Union, businesses existed to provide jobs. There, they used to say “we pretend to work, they pretend to pay us.” Because the businesses had no concern about the customer, after you were paid your money would have little power. In America, when you get your pay in your wallet, countless people court and flatter you.

In Latin American socialist countries, businesses exist to provide jobs. The Mexican state owned oil monopoly was used to give high paying jobs to friends of the elite, and lesser jobs to the public to quell unrest and poverty. The state run oil companies are poorly run (as you would expect) and the state is appropriating the value of the natural resource wealth and dissipating it. If Mexico simply sold the rights to drill oil, the state would get great revenue and private enterprise would manage it for a profit, a net value gain to the world.



Scott Adams of Dilbert fame is on a roll over at Scott Adams Blog. His recent post Shame Shaming just plain annoyed me so much I have to respond here. I would respond in comments to his post but he gathers 1,000 comments per post so my comment would be lost. Also you have to register to comment there and that is a pain.

Basically, his thesis [in my interpretation]  is that people are moist robots and free will is an illusion. Nothing should be shamed because everything about people is determined.

He starts with fat-shaming. You should not shame fat people because a person’s appearance is outside of their control. I question that assumption. I have always contended that anyone could lose a pound of weight if some super NSA or CIA agent arrived at their home in the middle of the night and put a gun to their head and said, “There is nothing you can do to stop me from coming back for you in one year wherever you go, and when I do, if you do not weigh one pound less than you do now I will kill you.”

Many fat people who later shape up report that they were just not willing to do something about being fat before and later became motivated and could take the fat off. Scott claims that most civilized people reject fat-shaming, yet my daughter goes to school with many international students and she reports that the Japanese engage in merciless fat-shaming of other Japanese. She thinks it is terrible because the Japanese students are afraid of putting on pounds. She likes the American non-judgmental  attitude. Still, the shamed Japanese have less obesity with fewer health problems cause by it. And their women look much easier on the eye to men, in general.

Mr. Adams says nothing is worthy of shame because no one is actually choosing anything. Even if that is true, in their non-choices people are influenced by incentives. You do not need free will to draw your hand away from a flame. If you are a Japanese student in an American University and you eat french fries to your hearts desire and your friends start to avoid calling you to study together and having a supportive social network is important to you, you might be “determined” to avoid french fries and loose some pounds. You might not actually be choosing of your free will, you might be responding to conditions as a wet robot. In this case shaming is promoting a health and aesthetic good.

More importantly, there is an epistological problem in asserting, as Mr. Adams does, that all your thoughts are determined.  If all your thoughts are determined, it is not relevant if your thoughts comport with reality. If it seems to you that certain thoughts are more logical and align more with evidence, that is merely a determined phenomenon. If I believe that I have free will and judge ideas on their merits, that is just something I have to believe. If Mr. Adams believes he has no free will, it is a conclusion he has to draw. Moreover there is no reason to try to resolve the apparent conflict. The concept “truth” becomes something like “authenticity”. If I am reporting my beliefs accurately that is the best it is possible for me to do. Mr. Adams makes mountains of arguments why Donald Trump is a better persuader than average. Why bother, if what everyone believes they have to believe.  As Pangloss believes, it is the best of all possible worlds.

Perhaps I am missing a subtly of the position. Perhaps the actions of other people on your beliefs are part of what determines what you believe? Of course that is true, I can see it every day. Wait a minute, what I think I see is just a belief I am determined to have. Reality may be that the actions of other people have no effect on my beliefs, or have the opposite effect that I believe I see. Why do I believe in causality? My belief in causality may be determined regardless of the evidence for or against it. Contra-causality may be the rule of the world, but I just can’t see it. Everything that I believe, I should know is suspect.

Most importantly, why believe the belief in determinism, or in evolution, or that living organisms die, or that certain beliefs have a survival value? The whole theory states that theories have no validity, but, take this on faith, they help organisms survive, and, more faith, organisms need to survive, and, more faith, some beliefs are better at forwarding survival than others, und so weiter.