Wednesday, December 9, 2015

The Nicest Villain Ever

Many say that since ancient days, mankind has struggled under the oppressive boot of big business. They claim that history is a story of workers being exploited, greedy owners lining their pockets with excess profits, the one percent living off the backs of the 99, and offering nothing in return. This way of thinking is growing in popularity, but ignores the important contributions of business to human society. Although business has black marks on its history, it has been a net good force on the world because of all the societal good it has achieved.

The roots of business go back to ancient Rome. Rome spread a uniform coinage across the known world, and this facilitated trade through all parts of the empire. In order for this to happen, however, roads needed to be in place to carry merchants’ goods. The roads the Romans built can still be seen in many places today. Trade also supplied Rome with grain from the Black Sea, Egypt, and Gaul. 1 Without those traders bringing grain back to Rome, there would have been a severe food shortage in the capital city.

While business was difficult during the Dark Ages, it played a role in ending them. A key factor in the beginning of the Renaissance was a new middle class of people who were not the ruling government and Church class or the poor working class. Many of these people gained their wealth through trade. These businessmen could then spend their money on the things we now associate with the Renaissance; they sponsored new art, read new books, and helped to drive the cultural revolution that was to spread across Europe. 2 Without this new class of businesspeople in society, it would have stayed in its starkly divided state, and the door may have never been opened for the levels of social mobility we enjoy today.

It was in the pursuit of new wealth and new trade that the Renaissance explorers launched their ships into the oceans, eventually discovering the New World and paving the way for our country to be founded. Though we often think of the Pilgrims in New England as our predecessors here in America, the first settlers here were actually at Jamestown, a settlement motivated by economic interests. Even the roots of our country are deeply connected with business.

It is true that there have been some major abuses by businesses over the years. Some classic examples include factory owners paying their laborers just enough to keep them alive, or the use of child labor, or sweatshops in China. As people search for profit, it is important that they be guided by a strong code of personal ethics. Along with that, our modern free press has done a great job from the last century until now uncovering unethical business practices, and companies that engage in them are often discovered and suffer severe losses. For example, Nike makes its shoes in Southeast Asia. In the early 90s, reports began to surface about poor conditions in so-called “sweatshops” there. In Indonesia, workers were being paid only 14 cents an hour, below the country’s minimum wage. As more reports began to surface, Nike began to suffer losses, but it learned a lesson. In 1999, Nike created the Fair Labor Association, a sort of club of companies that agreed to independent monitoring, a 60 hour workweek, and a minimum age, among other things. 3 Nike now leads the world in promoting fair labor practices. In this way, we can see how our modern free press is becoming very effective at promoting ethical business practices.

Today, with new technologies, new capabilities, and an interconnected global economy, business has evolved in important ways. While in the past, businesses had a positive effect on the general good by operating in their own self interest, we can see businesses today that “do well by doing good.” These companies use communication and business tools to make the world a better place, and cut a profit while doing it.

Microfinancial institutions are a great example of this. In developing countries, one of the major barriers to economic growth is the lack of capital, the materials needed to produce economic value. The old adage “you need money to make money” is painfully apparent in places where there really is no money. There are many people who have skills that would be useful if they could harness them, but because they lack the money to buy production materials, they continue to barely subsist. Microfinance institutions help to bridge that gap. One company that does this in Tanzania is Tujijenge, a word which means “let’s build it ourselves” in Swahili. They give loans to groups of 15-35 people, who use the money to build small enterprises, like fruit stands or handcraft companies. The people get money on an individual basis, but meet every week to discuss the progress of their businesses, get advice from the others, and support each other in the hard times to maintain motivation. The peer pressure creates “social collateral”, an important form of persuasion, which provides enough motivation to pay back the loan that microfinance institutions can give loans without fear of constant default on the loans.4 Through this, people in developing countries are given the tools to build the businesses they need to lift themselves and their children out of poverty.

Another way we can see businesses “doing well by doing good” is in the green energy field. Billions of dollars are spent privately every year on green energy and investment increases every year. 5 Companies that historically have been major polluters are becoming investors and drivers of a green revolution, and we can only assume that in the coming years, these companies will continue to be at the forefront of innovation in this area. This has the dual benefit of not only a profit potential from the new products, but it also provides credibility for these companies as they try to communicate their company values.

The very products that businesses offer can be a way for them to create good in the world. Products like this include brands such as “Green Clean”, which base their entire business approach on an environmentally sustainable model. These products, though often more expensive, are actually economically viable projects because there is a huge demand in the market for products that do the job well, but do it cleanly. Other products, such as Endangered Species Chocolate and even General Mills, allow customers to “indulge in a cause” by making donations to causes such as endangered species protection or education for each item bought. Customers like to build their image and communicate values just as much as companies do, and this can also provide a motivation to buy products like this, along with the genuine desire to do good. See an example in the Toyota Prius here. Companies have a huge motivation to do good in the world, because that is what customers want.

Business has great potential to be a force for good in the world. Although there have been excesses and abuses, by harnessing the power of people working to achieve what they want, it has created massive societal good from Roman time to the current day. As long as we maintain a free press to monitor and maintain ethics, people and businesses will be at the front of economic, technological, and social growth, driving the progress of the standard of living around the globe.

Works cited
1 "Ancient Rome and Trade - History Learning Site." History Learning Site. N.p., n.d. Web. 09 Dec. 2015.
2 Wilde, Robert. "What Were the Major Causes of the Renaissance?" EducationN.p., n.d. Web. 05 Dec. 2015.
3 Nisen, Max. "How Nike Solved Its Sweatshop Problem." Business Insider. Business Insider Inc, 09 May 2013. Web. 06 Dec. 2015.
4 “Microfinance: An African Case Study." Allen & Overy. Allen & Overy, 6 Apr. 2009. Web. 5 Dec. 2015.
5 "Private Investment in Green Business Tops $1.6T Since 2007." GreenBiz, 4 Aug. 2010. Web. 5 Dec. 2015. 

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