Wednesday 23 September 2015

Are businesses really business-friendly?

Politicians and parties often try to out-do each other as to which can be the most business-friendly.  And each party criticises the others for not being sufficiently business-friendly.  I wonder, though, what they mean, because there is a huge, and not generally understood, difference between being friendly to business in the generic sense and being friendly to existing businesses in the specific.
What I mean by that is that businesses, once established, will always seek to ensure that the environment in which they operate is the one which is most favourable to their interests.  Whether that be in terms of tax breaks, employment legislation, health and safety or environmental protection, they will lobby for the regime which most protects their interests.  And most politicians seem to see being business-friendly as doing what these lobbyists request and gaining their support and endorsement (and potentially, funding for themselves?).
But ‘business’ in the generic goes much wider than that.  It is an essential element of the capitalist system that some businesses will fail.  Creative destruction of some businesses as a result of innovation and change is one of the essential economic drivers.  Preserving ‘what-is’ in aspic, and supporting the continuation of existing businesses in the face of new challenges is potentially inimical to the interests of ‘business’ more generally.  The only reason that this isn’t a great deal more obvious is because economic (and political) power is wielded by existing businesses; those which haven’t even been imagined yet are, by definition, powerless and unable to lobby.
Sometimes, it may well be that those things which existing businesses lobby for would also benefit the businesses of the future; but that’s more by accident than design.  They’re really only pursuing their own narrow interests, even if they try and make it sound otherwise.  In that sense, even existing businesses themselves aren’t always business-friendly in the more generic sense.
Am I saying that business isn’t important?  Of course not; under the current economic system, it’s an essential driver of employment and economic activity.  But what I am arguing is that creating a climate which fosters that is not at all the same thing as assisting current businesses to carry on doing what they’re doing – assistance which may even, at times, prevent or delay innovation and change.  Yet that's often what politicians mean when they talk about supporting business.  In truth, their claims need to be scrutinised a lot more closely to understand whether that simply means that they’re supporting existing vested interests.

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