Archive for December, 2011|Monthly archive page

Business & Corporate Purpose

It’s fashionable these days (especially since the 1990s) to say that the only purpose of Business, most especially the Corporation, is to Make Money.   This sounds technically honest, and married to the mantra “maximize shareholder value” has in fact been driving our businesses more and more, year after year.

Only one problem – it’s Bullshit.

Any enterprise meant to provide more than today’s food or shelter must provide a value over and above today’s food and shelter - whether it be farming, water, cars, art… anything useful – or it cannot survive without artificial measures (more on that below).   This is anthropologically & historically how such enterprises arose and flourished.

Forgetting this fundamental leads to one source of our difficulty today – we actually believe money itself has intrinsic value.   Money is a wonderful and convenient (portable) symbol of exchange, consideration given for value received, which is then exchanged elsewhere for other value.  This method of exchange in the US (and for most of the world) is based on the Good Faith and Credit of the US Government (about which I’ve blogged before).

We have become so consumed with permanent cash flow and cash growth (whatever that is!) that we have condoned (all of us) the concentration of monetary wealth in the entities with the least real stake in providing value – those whose purpose is to facilitate the exchange.   Put differently: the producers are no longer the holders of the most wealth (as they have been historically), the moneychangers are.

Worse yet, we’ve actually put the financial folks in charge, and given them the complete backing of our Treasury (artificial measures – remember TARP and other “interventions”?).

Does anyone really think that is a good idea…?    I think it’s an abomination:   Our Government propping up the emptiest of our enterprises.

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