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I am sure there are lots of business activities which are lucrative but not especially useful for society. Your list seem highly subjective. I would think finance, which is the management of money, is often very useful. Useful for businesses, organizations, even local and our national government. Apps and software are essential. There is no reason to have a computer without the software to run it. You might also see some value in advertising if you had a product or service to sell or if you wanted to promote a charity.
As long as we are making subjective lists, I will make a brief one of my own:
Gold and diamond mining. There are virtual no uses for these except for hording and ornamentation
Professional sports. I see no value whatsoever but I suppose some enjoy the entertainment aspects. Non-pro sports could easily fill the gap.
Fashion. Frivolous expenditures on fads that are expected to become obsolete.
But mining, entertainment, and vanity are not hurting anyone. Well, mining, may
As with finance, the way it is done at the moment is not so clean cut and is almost borderline counterfeiting, ponzi scheming, and causing inflation.
There's definitely some social utility implied in every business charter in this century. Businesses that only exist to make money overstep every ethical and moral ground. They definitely exist, they are (mostly) legal, and they are not something which we should promote as a society.
I think you are getting the cause and effect the wrong way around. Businesses that have some use to society tend to be more successful for a variety of reasons - so the best interests of the business and society tend to lie along a parallel path.
But that does not mean, by any stretch, that a business must exist to serve society. The goal is to make a profit, not to be socially beneficial.
Now if you wish to state that non socially beneficial businesses are immoral, you can do so. But you have to realize that morals become somewhat subjective when pushed to extremes.
then why dont people who already own homes, just hire those people to fix up there own homes, as opposed to buying another that was fixed up for a more hefty price?
Because it takes a certain degree of previous experience to acquire the good judgement necessary to do so efficiently. Many homeowners who have the interest are well able to acquire that judgement - but far more have no interest in the subject and just desire the results. Hence the market for improved homes.
As long as we are making subjective lists, I will make a brief one of my own:
Gold and diamond mining. There are virtual no uses for these except for hording and ornamentation
Gold is an essential material for many applications, especially electronics. It has extremely favorable electrical properties. The vast vast vast majority of diamonds are used for industrial applications. Diamond has favorable mechanical and thermal properties which aid in rudimentary and fundamental manufacturning processes alike.
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Fashion. Frivolous expenditures on fads that are expected to become obsolete.
I have to agree here, but that's more personal bias than anything. Imagine an industry where two or three people tell the entire world what they're supposed to be doing, charge ludicrous prices for them to do it (of which they are the benefactors), and then change their minds and repeat the cycle.
Here's my impression of fashion:
As you are browsing wristwatches in the window of your local watch store, you see that they cost from $20-50. Brad Pitt walks up to you, opens his trenchcoat to reveal the exact same collection of watches, and tells you that you have to buy one of them.
"How much do these cost, Brad Pitt?"
"They are $400 a piece. You have to buy at least one from me, because I'm Brad Pitt."
"But, the ones in the window are only $30, why can't I buy one of them?"
"Because I'm Brad Pitt and I'm telling you to buy one from me. If you don't, you'll be sorry."
"Ok Brad Pitt, here's your $400."
"Thank you. Now you need a new hat."
"But, I just gave you $400 for a watch!!"
"I know, but I'm almost out of watches and I've moved on to hats. $150 please."
"Ok Brad Pitt, here's $150."
The next day, Brad Pitt stumbles upon a stash of 1,000 pairs of socks. He pays Oprah $5,000 to tweet about the socks, and he sells out in 2 days.
Gold is an essential material for many applications, especially electronics. It has extremely favorable electrical properties. The vast vast vast majority of diamonds are used for industrial applications. Diamond has favorable mechanical and thermal properties which aid in rudimentary and fundamental manufacturning processes alike.
..........
Enough gold has already been mined to last for thousands of years at the current rate of industrial consumption. That assumes no recycling.
Almost all mined diamonds are used for hording and jewelry. Industrial diamonds are almost all synthetic.
Almost all mined diamonds are used for hording and jewelry. Industrial diamonds are almost all synthetic.
I didn't fact check the statement on gold, but here is what I found on industrial diamonds:
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Only about 20 percent of Diamonds are fit for gem use. The other 80 percent mined are used industrially, especially as abrasives and as Diamond saws, which are rotary saws with tiny Diamond studs that can cut almost anything.
So most industrial diamonds are synthetic, but most diamonds pulled out of the ground also go to industrial uses as well.
But that does not mean, by any stretch, that a business must exist to serve society. The goal is to make a profit, not to be socially beneficial.
Businesses which make a profit, are more socially beneficial than those that don't. I argue, businesses are part of a larger "social contract" between individuals, and government to make life the most optimal for everyone.
Business making a profit can employ people sustainably. Business that don't, cannot and are mis-allocating society's finite resources.
Businesses which make a profit, are more socially beneficial than those that don't. I argue, businesses are part of a larger "social contract" between individuals, and government to make life the most optimal for everyone.
Business making a profit can employ people sustainably. Business that don't, cannot and are mis-allocating society's finite resources.
You are welcome to believe these things, but they are incorrect. I will go out on a limb and speculate that you do not pursue your own endeavors. I do not believe I have ever heard these kind of ideas coming from someone who has to make the payroll twice a month - having to do so generally requires that you get the cause and effect the right way around.
You are correct however, that profitable businesses tend to be more socially beneficial than unprofitable ones. Where you go wrong is by applying your own notions of socially beneficial as if they were universal - they are not.
Profit, however, is universal, a business either continues or it doesn't based on whether it makes a profit - that is why it is the practical measure of viability. There is nothing holy about profit - it is simply a 100% practical and honest measure of a business's viability. If it is not profitable, it must cease or cheat - that is why some of us put such store by looking at profitability rather than subjective questions such as social utility.
It seems to me that businesses have three main functions. They sell products or services. They employ people. They make a profit for the owners.
Some businesses do well or badly with each of these. Starting with the last factor, those businesses that make good profits tend to survive. Those that do not are not likely to survive for long.
Some businesses treat their employees well; some do not. Overall businesses which treat employees poorly are living on borrowed time. They may get away with that for a while but they are losing the competitive advantages that come from happy, dedicated employees.
Some businesses, make profits, treat their employees well but do not provide quality or useful products or services. That is not a good position to sustain long term operations. Philip Morris is a good example of a company struggling with this problem. PM has been able to made good profits largely from overseas tobacco sales. Long term that strategy is likely to fail. PM will succeed long term only if it can diversify itself out of the tobacco industry.
It seems to me that businesses have three main functions. They sell products or services. They employ people. They make a profit for the owners.
Businesses have one main function - to make a profit for the owners. The other two are how they do that. Profit is the cause, goods, services, and employment are the effects.
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Originally Posted by jrkliny
Some businesses do well or badly with each of these. Starting with the last factor, those businesses that make good profits tend to survive. Those that do not are not likely to survive for long.
Yes, entirely correct.
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Originally Posted by jrkliny
Some businesses treat their employees well; some do not. Overall businesses which treat employees poorly are living on borrowed time. They may get away with that for a while but they are losing the competitive advantages that come from happy, dedicated employees.
All businesses are living on borrowed time, their life span depends on the pragmatism of management and the desire to continue more than anything else. In general, businesses that treat employees well have a competitive advantage due to wasting less effort on finding and training good employees. Some businesses feel they can afford to treat employees poorly, depending on a surfeit of candidates and the assumption that their low skill requirements for the job means that all candidates are essetianly equivalent.
Although I do not advocate for societal interference in the affairs of the latter type of business, I recognize that they put themselves at an extreme disadvantage - their outlook is not pragmatic. Over the long term, such disadvantages will catch up to them, but I would not go so far as to say that employee relations is the deciding factor in their demise. Usually businesses run by such impractical people make many mistakes across the board and attributing their failure to just one is a matter of faith more than evidence.
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Originally Posted by jrkliny
Some businesses, make profits, treat their employees well but do not provide quality or useful products or services. That is not a good position to sustain long term operations. Philip Morris is a good example of a company struggling with this problem. PM has been able to made good profits largely from overseas tobacco sales. Long term that strategy is likely to fail. PM will succeed long term only if it can diversify itself out of the tobacco industry.
You are correct in theory, but PM is not a good example for you, as the cause and effect of PM's problems are far too complicated to chalk up to reduced domestic tobacco demand. PM was fairly diversified in the 1990's owning several non-tobacco brands that it spun off in the 2000's. In general I would say that was a mistake, but on the other hand, the motivation may have been to sheild these brands and the joint owners from PM's liability problems regarding tobacco. It seems likely to me that PM was made the sacrificial brand, isolating all the tobacco concerns in a single company so that it alone would go down, leaving Kraft, General Foods, and Miller Brewing to continue un-encumbered. This is just casual speculation on my part and may well be incorrect.
The tobacco industry in general is a better example of my argument I think. It is clearly non-beneficial, and basically never has been, yet until the days of the tax it to death and litigate to death mentality, it remained quite profitable. The tobacco demonizers like to argue that it was only profitable due to their customer's ignorance of their own failing health, but that is incorrect. It has been long known that the stuff killed you - cigs were called "coffin nails" in the 1930's according to my grandfather - now dead - he was an MD who smoked his entire adult life. He told me that no sensible person he ever met thought tobacco to be harmless (he was born in 1918, IIRC).
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