Businesses Serve Society

If you want to live a life of service, consider working in the private sector

This article was originally published in The Daily Item. I won’t use block quotes, to keep this cleaner.

Susquehanna University recently had the honor of hosting groups of high school students from both the Future Business Leaders of American (FBLA) and DECA.  These are extracurricular clubs that work on business issues and many students in these clubs also use their business skills to raise money for good causes. On this day, these students were also competing against each other but prior to the competition I was asked to speak to them for a few minutes about the importance of what they were doing.  Here are my remarks: 

Thank you for being here today.  It is exciting for me to see so many high school students who are involved in an extra-curricular club focusing on business issues.  And it’s fitting that you’re spending today at Susquehanna University, where our mission is to prepare students for lives of achievement, leadership, and service.  But I want to focus on the last part – to serve.

We often hear about service and people think that service means working for the government, or in a soup kitchen, or with a church.  And those are all valid ways that people can serve society.  But working for a business, or starting your own business, is often ignored as a way to serve.

It shouldn’t be.

If you want to serve society well, there might be no better way to serve society than working for a business or by creating your own business.  There are many reasons this is true, but I’ll discuss three in detail. Businesses – and relatedly the free markets in which they reside – are the leading reason for increasing standard of living, businesses are the leading reason for the reduction of world poverty, and misbehavior in businesses is tougher to sustain than misbehavior in the public sector.  Let’s discuss each separately.

First, businesses, and relatedly free-markets, are the leading reason for increasing standard of living.  By working for a business, you are contributing to the global good. 

Increased efficiency that has come from business activity is why incomes have risen in both the USA and worldwide over the past hundred years.  The evidence is clear – countries that allow people to embrace business and free markets have grown more than others.  This means growth in the standard of living in the USA and other developed countries.  (New iPhones, bigger housing, etc.)  That is good.  But from a global perspective, this economic growth caused by business has led to the reduction of poverty.  This is new.  Throughout the history of the world, the number of people in poverty was always increasing, along with population growth.  The number in poverty peaked in the late 1960s, with over 2 billion people in poverty.  (Earning $1.90/day or less.)  But then a funny thing happened.  For the first time ever, something happened – the number of people in poverty declined.  With the expansion of free markets, fewer than a billion people are in poverty today, despite the population doubling over the past 50 years.  This is because of economic growth, and economic growth is tied to economies that allow businesses to operate. 

This is an important take home message for the day -- billions of people are better off today because of businesses and free markets. 

The second reason starting up or working for a business is serving society – businesses spur innovations. 

By working on serving customers and growing their business, firms have innovated and created new products and services that make us better.  Sometimes in obvious ways – like new phones.  Sometimes in less obvious ways – like improvements in product safety (like with automobiles) by new methods that haven’t increased the cost. 

Finally, by working for a business, or starting a business, you are always ensuring what you are doing will provide value.  If you do not provide value to your customers, they can go elsewhere and your business will lose customers.  Eventually, your firm would go out of business.  This constraint on your actions – that you are always serving society through your actions, is important.  In a private market, customers will punish firms who aren’t providing good value.  When someone isn’t serving people well in government and service jobs, unfortunately, people can often stay in those roles forever.  (Sometimes getting budget increases.)

There is incredible value in serving society in ways than other working for a business.  A stable rule of law is a prerequisite for economic growth.  So are property rights.  We need great people in government and service jobs who are willing to support the rule of law and property rights, whether as politicians, police officers, bureaucrats, or in other professions. Thankfully – there are a lot of great people in these roles. 

Those are noble occupations, but working for a business or starting your own business, is also serving society.  In fact, in terms of reducing poverty and increasing the well-being of society, the single best thing most people could to do serve society is to work hard when starting a business or with a firm in the private sector. 

Thank you again for being here today, you make us excited for the future, and good luck to those who are competing.