During the past centuries, political thinkers, reformers, academicians, capitalists, business managers, and the public offered a variety of opinions on the reason of economic activity; on its roller-coaster trend through the years, and on how best to stabilise it in the ever-changing circumstances of man and the world around him.
Each, in his or her own way, has stated that spreading human prosperity on the widest scale ought to be the real purpose of economic activity. That is as far as macro economics is concerned. But when the same economists (a minority of them dissenting) pontificate and then hypothesise about the role of the individual business enterprise ie discuss economic activity in its micro context, they go off the track suggesting that profit should be the ultimate objective.
This principle is at the heart of Reagonomics and Thatcherite philosophy of market economy. These double standards have been boldly proclaimed in hundreds of books and papers written on the subject as well as the continuing debate between politicians, economists and the public. It has never ceased to amaze me why the economists believe that human beings are irretrievably self-centred.
That they don't want to be a part of the society when it comes to individual prosperity represented by entrepreneurial profit; that they are incapable of appreciating the commonality of their interest with society as a whole. Isn't it wholly unjust to presume that most of us are unable to relate to the broader purpose of economic activity?
After all, the purpose of macro economic activity can't be at variance with the purposes of individual business enterprises because, collectively, it is these enterprises which make-up the economy of a country. This dichotomy, created by the economists, is primarily responsible for the conflict which has caused the cyclical failures of capitalism, socialism and communism, one after the other, more than once in the past.
Following the change of governments in the UK and France in the mid-1990s, capitalism seemed to be getting out of favour for the nth time and socialism once again seemed to be on the verge of becoming the in thing. The recent change of regimes in Spain, Venezuela, Brazil, and now Australia, and the coming defeat of the Republicans in the US reflect the same shade and may have a wide-raging impact on the world economy.
But the only logical and defendable reason for economic activity, which is fundamentally the same be it the macro or micro context, remains the same - maximising prosperity by bringing the largest number of goods and services within the reach of the largest number of people. It stems from the egalitarian principle that maximisation of individual wealth, as an end in itself, is a futile of objective to pursue.
What is of lasting value is using wealth for maximisation of macro economic activity because only then will the individual enterprise be fulfilling the cosmic purpose of spreading prosperity. This is in no way a denial of the profit motive. It merely assigns a logically appropriate priority to this undeniably important end; it must be achieved but for sustaining and expanding enterprises to serve ever-increasing numbers.
Confused business and profit priorities lead to conflict of interests which is conveniently mis-construed as class war. It is not a class war. It is a conflict between man and nature because at the base of this conflict is man's denial of cosmic realities. And, not surprisingly, he has been the loser all along, not withstanding the many corporate success stories which fade into virtual nothingness when compared to the magnitude of the available opportunities they failed to grasp.
Business enterprises that (knowingly or unknowingly) adopted the following objectives as their guiding principles aligned themselves with eternal cosmic realities, leading them to historic growth and success:
1. The divine purpose of economic activity is spreading prosperity (whether by offering comfort, convenience, ease of operation, cutting down on effort or cost, etc).
2. Prices must be lowered (without endangering the sustained existence of the enterprise) to the point where goods come within the reach of the largest number of people implying that profit be earned on turnover rather than on per unit basis.
3. Goods and services must offer the buyer fair value in terms of their utility which is at least equal to, if not more, than the price at which they are being sold.
4. Goods must be sold with their positive qualities, as well as their limitations, widely advertised so that buying decisions can be based on the knowledge necessary for making the right choice from among the available alternatives. And even then, the enterprise must be prepared to accept the goods back if the buyer is dissatisfied with them either because the goods are unsuitable for the buyer or in his or her perception, not fair value compared to their price.
5. All promises ie contractual obligations accepted by the business enterprise must be fulfilled to the entire satisfaction of the buyers. It is indeed unfortunate that, by and large, market practices followed by the entrepreneurs convey the impression that they have either not heard about these principles, or do not believe in them, because none of these principles, especially the desire to reach out to the largest segment of the market, does not find expression anywhere. Not surprisingly, therefore, entrepreneurs keep complaining about dwindling profits without realising that they haven't been looking at the opportunities around them.
It has occurred to only a handful that each individual human being offers a world of opportunities if only businesses could bring their goods and services within his or her reach. Instead of grasping these opportunities to sustain their business enterprises, these entrepreneurs keep demanding tax relief and subsidies to sustain their un-scientifically managed 'insignificant' enterprises.
I call them insignificant because that's precisely what they are since none of them seems to be seriously playing its role of reaching out to the largest number of people and fulfilling the cosmic purpose of its existence - spreading prosperity. Banks (including the World Bank) were particularly blind to these realities until they were goaded into looking at micro finance and SME finance when poverty - the outcome of blind pursuit of capitalist ideology - began to threaten state stability.
To the entrepreneurs conditioned by current market values and ethics, all this may sound, at best philosophic, or wholly unrealistic. But it won't be for the first time. For centuries they have denied the existence of opportunities and failed to do what nature has ordained for them. But there is a ray of hope. As has been the case all through the centuries of lost opportunities, some among them may be listening, and may like to try out these principles.