Business is an engine of funding

In my book “More Than Your Business Card,” I made the argument that business is not only a legitimate calling from God but also a very important one in terms of societal benefits. The case was based on three important attributes of business - creativity, funding and influence. 

Last week, I explored business creativity. Today, I will focus on funding and next week, influence. In 2020-21, Mary and I spent considerable time sheltering in place in the midst of the COVID-19 pandemic. Economies around the world were shut down by government edicts aimed at bringing the pandemic under control. While there was considerable debate as to when and how businesses should be permitted to operate, there was no serious argument concerning the necessity of allowing businesses to begin normal functioning again. If they didn’t, countries around the world would suffer enormous long-term economic and social harm. 

To bridge to the time when the private sector could operate with a modicum of normalcy, governments collectively injected trillions of dollars of liquidity into their economies through massive monetary stimulus and unprecedented fiscal measures. The goal of these actions was to support the workers adversely affected by government shutdown orders and the businesses that employ them. Based upon various scholarly cost-benefit analyses that have been published since the onset of the pandemic, it is becoming increasingly clear that governments around the world significantly overreached by dramatically interfering in the normal functioning of free market economies.

The fact that governments were able to get away with acting the way they did also suggests that many, if not most, people today seem oblivious to the simple truth that private sector for-profit business funds everything. And by everything, I mean absolutely everything. It is unfortunate that it took a pandemic and the governmental response to affirm this fundamental truth. In fact, private sector for-profit businesses fund not only private sector activities but all government and not-for-profit services. 

…the ultimate source of funding for every one of these worthwhile endeavors is private sector for-profit businesses.

Whether we are talking about healthcare, education, public transportation, the arts, the police, other emergency services, or any of the myriad not-for-profit organizations, the ultimate source of funding for every one of these worthwhile endeavors is private sector for-profit businesses. It is true that individuals are a significant funding source for governments and the not-for-profit sector. However, these individuals earn the money with which to pay taxes or make donations from compensation paid by private sector businesses or the various non-business entities funded directly or indirectly by business. Alternatively, they earn dividends and interest from private sector businesses from which they pay taxes and support charitable endeavors.

While all cultural arenas, including education, medicine, the arts, the media, religious organizations, and government, are important to human flourishing, it is only commercial activity that ultimately provides the necessary funding that enables them to operate and thrive.

Photo by Alexander Mils on Unsplash