Not if, but how government should regulate business

I was inspired by and article by George Jarkesy the other day. In the article George quoted Calvin Coolidge who said “The business of America is Business”. That quote along with Georges comments got me thinking. If business is the business of America then what is the business of business? Or, to put it in the words of one of my old bosses when I was presenting a meandering powerpoint presentation about something he shouted out “What’s the bloody point?”. This in fact is the crucial question. What is the point or purpose of business for if in deed America is all about business the purpose of business must be the essence of America.
According to some, the business of business is to create wealth but that is at best a radical over-simplification. If you mean by wealth, money and/or things, then I would be inclined to disagree that business is about creating wealth. The fact is that nobody, at least no healthy people, strive in life only to gather money or things. What we really want is health, status, love, security and self-actualization to quote Maslov. Money and things are only of value as long as they contribute to one of our underlying and fundamental human needs. The key word in that last sentence is “value”. What the business of business “should” be about is creating value.

Then the question arises, “value for whom?” The only reasonable answer to this question is that businesses should be in the business of creating value for everyone, certainly for shareholders, customers and employees but also for society as a whole. Business shares the responsibility of creating value for society with all other institutions both public and private. All institutions exist “or should exist” for the purpose of making the world a better place. If making the world a better place is not the primary long-term objective of an institution then that institution has no place in society. It may well be that someone starts a business with the sole ambition of making money but if that business doesn’t create value for other people it will not survive. If that business is detrimental for society it should not exist.

We may all have different opinions about what a better world would look like and even if we agreed on what a better world would be we may not agree on how to get there. But we all share a common ambition of making things better. This is probably nowhere as evident as it is in the political arena. Politicians and political parties may have strongly opposing opinions and may often have hidden agendas but they all have the same fundamental message to voters. Vote for me or my party and things will be better.

But what happens if a business does not contribute to the general good of society and actually acts in ways that are detrimental to society? We regulate them! I have never met anyone who didn’t believe in government regulation of business at some level. It just makes good sense to legislate to block the creation of monopolies. It is equally prudent to control that companies don’t pollute the environment and that they provide a safe working environment for their employees. The question is not whether or not we as a society should regulate business nor is the question how much we should regulate business. Some businesses are highly regulated and there are few if any among conservatives or liberals who argue for legalization of heroin or prostitution.

The real issues are complicated and the answers must be more nuanced than the slogans being thrown around by politicians on both sides of the issues. Government, as an extension of the people, should have the right and the responsibility to protect the people from unscrupulous people and harmful business practices for the good of society.