Businesses Really Are Running The World
They have influence over how we live our lives ...
POSTED BY JONATHAN VOWLES ON 19/07/2016 @ 8:00AM
Well, perhaps this is an argumentative statement, but just think about this for a moment. As Bill Clinton said ''it's the economy stupid!'' The economy isn't one big thing, it is actually lots of businesses, big and small, and the people they employ ...
Do you want to change the world by setting up a business or a social enterprise?
copyright: stockbroker / 123rf stock photo (licensee)
Who makes the decisions within the economy is actually all of the individual business owners and managers. Sure, the government makes lots of important decisions around the regulatory framework, but all the government can do is affect the decision making that those business owners take.
So it is actually the decisions made by those business owners that change the economy, and thus businesses really are running the world!
Let's start with something really basic. If you don't have businesses, then you don't have jobs. If you don't have jobs then you don't have money.
If there are no businesses, then the government doesn't have the tax that businesses pay or the tax they take off people with jobs. In turn, this means that the government doesn't have money to pay for hospitals, doctors, schools or teachers or to put into social security or pensions.
Without businesses, the capitalist system doesn't work, and indeed every time there is a recession, we can see that made real and dramatic. It's the impact on people who are made redundant, which spreads out to their families and the community beyond.
"Do you feel the underlying truth behind these statements?"
Or do you feel that it is so much bunkum? It is interesting though, isn't it? Saying that businesses rule the world can perhaps be taken too far; they aren't going to supplant governments anytime soon, but they really do have influence over how we live our lives.
What does this really mean for you? I think that there are two important points:
Firstly, if business is so important then social enterprises are a more effective way to change the world than charities. If you didn't already know, social enterprises are businesses that are run for altruistic rather than purely commercial purposes. However, every business, whether they are a social enterprise or not, has to run at a profit or they will eventually fold up and disappear. Profit is vitally important and is a way of measuring the health of a business.
Want to change something in your community? Maybe creating a social enterprise is the way to make that change? There are examples up and down the UK of vital resources like the local shop or pub being taken over by a social enterprise to prevent them from being shut down. Similarly, there are lots of examples in the developing world of people being helped to help themselves by helping them to start a business.
Secondly, as individuals and as communities, we need to support our local businesses to improve our nations' economy. This could be as simple as buying local or as complex as bigger businesses sourcing goods from UK suppliers. Buying local and supporting local businesses can be very positive for individual communities.
Research has shown that house prices are higher in places with thriving high streets, but also, logic suggests that a buzzing local high street will be a nicer place to go shopping or to a café than one that isn't.
Most large businesses acknowledge their influence and role in shaping our world by having a 'corporate social responsibility', but that's a blog post all in itself!
If you bring this all down to basics, everyone needs money. Money is the tool or means by which we swap value from one person to another. Value is a consequence of work. Work is a consequence of business.
"So every community needs businesses that are functioning well and making profits!"
However, you can have commercial businesses that are just there for profit or a social business that is there to make enough money to still be around next year and meanwhile is trying to change the world.
If you want to change the world by setting up a business or a social enterprise then get in touch with me on 01234 752 566. I'd be very happy to advise you on a way forward.
Until next time ...
If you're looking for a new accountant to help grow your business, do visit www.jvca.co.uk and discover how Jonathan Vowles Chartered Accountants can help you!
I've been an accountant in and for business since 1987 and have a wide experience of consultancy, audit, accounts, taxation and wealth planning work from individuals and small businesses to multinational corporations and charities.
My eclectic interests in growing and developing business span a number of areas … and can be summarised as strategic business advice and tax saving advice.
I have worked with the Chamber of Commerce to deliver courses for people about starting up in business and have lectured about tax for a major accountancy practice and for Milton Keynes College.
I relax by reading fiction and by getting away from the office in a campervan.