So then, we have the individual, the government, business... and now we have the firm.... let me first define a firm.
A firm is an entity (open or closed) in society that is allowed by the laws of the land and within these laws to conduct business and create wealth for itself.
A firm takes in raw materials, employees, capital from society to create a product or service and sells it to members of the society willing to pay for it.
Now I think that is a reasonable and complete definition of what a firm is and what it does. I will look up some of my economics books and try to verify it...
How did business, which was simply open trade amongst the individuals in society, lead to the creation of the firm? Why did society allow the creation of a boundary between itself and business?
Sunday, January 6, 2008
Saturday, January 5, 2008
Society and the poor, the weak, and the disadvantaged...
This is a separate post since I need to deviate from 6500 BC in order to discuss non-contributors. But in order to be complete...
I will stick with the survival theory... it is the basis for my argument and my instincts point that way.
Unless the poor, the weak, and the disadvantaged are able to increase the probability of survival, the set of present contributors has no reason to care.
The other question being, what kind of care is needed by these set of non-contributors.
I will propose that, in general, the set of non-contributors want to become contributors. This is sort of an untested hypothesis... I claim this hypothesis to be true based on the fact that the set of non-contributors who do not want to be contributors have no hope. Society will discard them. I will also make the claim here that the % of non-contributors who do not want to contribute is small.
Non-contributors who want to be contributors... they may know how, they may not know how to... but they do want it... that is the key.
Right so what is society's responsibility to them?
I believe that numbers and diversity increase society's ability to provide an increased probability of survival. I am not getting into details here but I think the argument would run along similar lines as genetics and mutation. Maybe I will elaborate on this in a later post.
Therefore, society (consisting of the present contributors) MUST, in their own benefit try to make these non-contributors into contributors. This is in their long term benefit.
I will stick with the survival theory... it is the basis for my argument and my instincts point that way.
Unless the poor, the weak, and the disadvantaged are able to increase the probability of survival, the set of present contributors has no reason to care.
The other question being, what kind of care is needed by these set of non-contributors.
I will propose that, in general, the set of non-contributors want to become contributors. This is sort of an untested hypothesis... I claim this hypothesis to be true based on the fact that the set of non-contributors who do not want to be contributors have no hope. Society will discard them. I will also make the claim here that the % of non-contributors who do not want to contribute is small.
Non-contributors who want to be contributors... they may know how, they may not know how to... but they do want it... that is the key.
Right so what is society's responsibility to them?
I believe that numbers and diversity increase society's ability to provide an increased probability of survival. I am not getting into details here but I think the argument would run along similar lines as genetics and mutation. Maybe I will elaborate on this in a later post.
Therefore, society (consisting of the present contributors) MUST, in their own benefit try to make these non-contributors into contributors. This is in their long term benefit.
Society and the Individual...
The individual created society for its benefit.... Does that make society more important than the individual?
Society created business for its benefit... Does that make business more important than society?
Similar questions but there is some more work to be done... I will start with the following... what does the society owe the individual? It is clear that the individual owes society discipline, sacrifice.. give up freedoms in exchange for an increased probability of survival. What about the other way around?
The society MUST provide an increased probability of survival to the individual. Aha... the question then is which individual?
We have earlier defined society as the present set of contributing individuals.
What about the poor, the weak, and the helpless? What about the children? The set of non-contributors that is....
Children are the PV of the future survival, so yes, the set of present contributors bears their burden.
The old were the set of past contributors... does society owe them anything? The metric being future survival... I will propose a theory here.. the set of present contributors wants (I am not using needs here) to survive.. if it terminates its old, then soon it will be their turn... hence they must take care of their old so that their children will do the same... thus society MUST care for its elderly...
{It is clear that as much as possible, I do not believe in moral arguments... I am a strong believer in the fact that morality is a survival mechanism}
Now the generic set of non-contributors... the poor, socio-economically disadvantaged... what is society's responsibility towards them?
I will stop this post here... since in 6500 BC, I do not believe there were any non-contributors... they were discarded. Life was hard. I will get back to this set of people in a little while since this is at the core of my discussion...
Society created business for its benefit... Does that make business more important than society?
Similar questions but there is some more work to be done... I will start with the following... what does the society owe the individual? It is clear that the individual owes society discipline, sacrifice.. give up freedoms in exchange for an increased probability of survival. What about the other way around?
The society MUST provide an increased probability of survival to the individual. Aha... the question then is which individual?
We have earlier defined society as the present set of contributing individuals.
What about the poor, the weak, and the helpless? What about the children? The set of non-contributors that is....
Children are the PV of the future survival, so yes, the set of present contributors bears their burden.
The old were the set of past contributors... does society owe them anything? The metric being future survival... I will propose a theory here.. the set of present contributors wants (I am not using needs here) to survive.. if it terminates its old, then soon it will be their turn... hence they must take care of their old so that their children will do the same... thus society MUST care for its elderly...
{It is clear that as much as possible, I do not believe in moral arguments... I am a strong believer in the fact that morality is a survival mechanism}
Now the generic set of non-contributors... the poor, socio-economically disadvantaged... what is society's responsibility towards them?
I will stop this post here... since in 6500 BC, I do not believe there were any non-contributors... they were discarded. Life was hard. I will get back to this set of people in a little while since this is at the core of my discussion...
Thursday, January 3, 2008
The split....
So now we have the trifecta working together to ensure the survival of the society. There are many places to go from here. I choose the following question.
How did we go from this happy simple world to the currently prevelant absolute trichotomy between the players? Don't ask me what trichotomy means...
Before that, another question pops up: 'Who is responsible to whom in this simple world?'
It is clear that the individual voluntarily created society to ensure his/her survival (yes, I believe in giving the Paleolithic woman equal rights). The individual then gave up some of his benefits in exchange for an increased probability of survival.
Society (as we have so vaguely not defined it) owes the individual nothing. It is a creation of the individual for his/her own benefit. Thus it exists without any debts.
Right... the government came about to protect society from imploding. It was created by society, not by individuals, for its protection. Hence its only and primary responsibility should be to society.
Who created business? Was it a creation of society to better itself or the individual contributor to better himself or herself? I propose that it was an agreement between two individuals and by extension, an agreement between members of society.
Thus, in 6500 BC or thereabouts, I claim that, society created business to strengthen itself and its members.
I take a break at this point:
Society created business - to strengthen itself (society) - and its members.
How did we go from this happy simple world to the currently prevelant absolute trichotomy between the players? Don't ask me what trichotomy means...
Before that, another question pops up: 'Who is responsible to whom in this simple world?'
It is clear that the individual voluntarily created society to ensure his/her survival (yes, I believe in giving the Paleolithic woman equal rights). The individual then gave up some of his benefits in exchange for an increased probability of survival.
Society (as we have so vaguely not defined it) owes the individual nothing. It is a creation of the individual for his/her own benefit. Thus it exists without any debts.
Right... the government came about to protect society from imploding. It was created by society, not by individuals, for its protection. Hence its only and primary responsibility should be to society.
Who created business? Was it a creation of society to better itself or the individual contributor to better himself or herself? I propose that it was an agreement between two individuals and by extension, an agreement between members of society.
Thus, in 6500 BC or thereabouts, I claim that, society created business to strengthen itself and its members.
I take a break at this point:
Society created business - to strengthen itself (society) - and its members.
The firm, society, and the government - The beginning
What is the game that these three entities play? What is its purpose? Let me go back to about... say 6500 BC. Life was simple back then.
It is almost certain that society came first as a natural means of survival of a group. This naturally led to inter-dependence and using a set of shared and limited resources.
Shared resources lead to conflict and hence it is safe to say that there was a set of rules created to share these resources and resolve this conflict. It is therefore safe to assume that some sort of government came next. Government... religion... I will not quibble with semantics. The role of government was then to provide a level playing field for society to use shared resources.
Once there was a relatively level playing field, makind I assume, moved on to greater things. Specialization. I can hunt, you can cook... we have a deal.. business therefore probably came last. Its purpose was to create wealth and increase the wealth of the society as a whole.
This is a key point. Individuals did not start trading because they wanted to be rich. Individuals started trading because they were dependent on each other to survive. There was a realization that by doing what each did best, the group as a whole was better off.
Right... to summarize...
1) society was created first as a means for survival
2) government was formed to regulate the use of the resulting set of shared and limited resources
3) individuals specialized in order to make the set of contributors to society better off
And to answer my previous question.. 'What is the game that they are all playing?'
'The game is survival... of the group of a closed set of individual contributors called the society'.
These are my Lemmas for this section... naturally if one disagrees at this point, it makes the subsequent conversations harder....
It is almost certain that society came first as a natural means of survival of a group. This naturally led to inter-dependence and using a set of shared and limited resources.
Shared resources lead to conflict and hence it is safe to say that there was a set of rules created to share these resources and resolve this conflict. It is therefore safe to assume that some sort of government came next. Government... religion... I will not quibble with semantics. The role of government was then to provide a level playing field for society to use shared resources.
Once there was a relatively level playing field, makind I assume, moved on to greater things. Specialization. I can hunt, you can cook... we have a deal.. business therefore probably came last. Its purpose was to create wealth and increase the wealth of the society as a whole.
This is a key point. Individuals did not start trading because they wanted to be rich. Individuals started trading because they were dependent on each other to survive. There was a realization that by doing what each did best, the group as a whole was better off.
Right... to summarize...
1) society was created first as a means for survival
2) government was formed to regulate the use of the resulting set of shared and limited resources
3) individuals specialized in order to make the set of contributors to society better off
And to answer my previous question.. 'What is the game that they are all playing?'
'The game is survival... of the group of a closed set of individual contributors called the society'.
These are my Lemmas for this section... naturally if one disagrees at this point, it makes the subsequent conversations harder....
Wednesday, January 2, 2008
The Stakeholder View - 1
What is business. That is the question that I have been thinking about for several years now. Seems like a pretty stupid thing to think about, but well...
One of the things I learnt in business school was that the answer to most questions was 'It depends... es kommt darauf an'. I guess it does depend on the perspective one takes and the boundaries that one chooses to draw.
If I look at the landscape of business today, it is filled with Corporations, SMEs, and entrepreneurs all driven by the need to make cash profits. That is their singular motive and the reason for their existence.
Axiom 1 > Generate more cash. In the hands of the firm. Than what they started off with.
That is then the well-known shareholder view of the firm. Take the inputs from the employees, capital providers, and suppliers and provide for the customer... fulfill Axiom 1.
Perfect... but then the only monkey wrench in the works is the the 'role' of business... the word role means that you are part of a bigger whole... your role is Axiom 1... but then, what is the play?
Therefore a stakeholder view of the firm is presented... Axiom 1 is played out in the broader context of society and the government. Throw in these two broadly defined constituencies and we have a play... the players being the firm, society, and the government...
Thus, if our role-players (the firm, the employee, the supplier, and the capital provider) are all in business... and if each of them is happy (I may or may not discuss the nature of this happiness)... then the firm fulfills Axiom 1 and its role in the play. We can now discuss how it plays with the other two actors: society and the government. I will tend to ignore the government in my discussions... they might jump in once in a while though.
Some questions come to mind here: What is the play that the firm, society, and the government are in? What does society give to the firm? What does the firm get in return? What is this society anyway?
One of the things I learnt in business school was that the answer to most questions was 'It depends... es kommt darauf an'. I guess it does depend on the perspective one takes and the boundaries that one chooses to draw.
If I look at the landscape of business today, it is filled with Corporations, SMEs, and entrepreneurs all driven by the need to make cash profits. That is their singular motive and the reason for their existence.
Axiom 1 > Generate more cash. In the hands of the firm. Than what they started off with.
That is then the well-known shareholder view of the firm. Take the inputs from the employees, capital providers, and suppliers and provide for the customer... fulfill Axiom 1.
Perfect... but then the only monkey wrench in the works is the the 'role' of business... the word role means that you are part of a bigger whole... your role is Axiom 1... but then, what is the play?
Therefore a stakeholder view of the firm is presented... Axiom 1 is played out in the broader context of society and the government. Throw in these two broadly defined constituencies and we have a play... the players being the firm, society, and the government...
Thus, if our role-players (the firm, the employee, the supplier, and the capital provider) are all in business... and if each of them is happy (I may or may not discuss the nature of this happiness)... then the firm fulfills Axiom 1 and its role in the play. We can now discuss how it plays with the other two actors: society and the government. I will tend to ignore the government in my discussions... they might jump in once in a while though.
Some questions come to mind here: What is the play that the firm, society, and the government are in? What does society give to the firm? What does the firm get in return? What is this society anyway?
Why
This is my first official blog since I realized that I needed some space to write down some of my thoughts. I also intend to compile a whole bunch of parallel ideas and thoughts on this topic of society and business.
This space will be devoted to my view on the role of business in modern society. I am a reader of history and therefore I will also attempt to explore the history of business in society and trace its evolution.
I don't have a particular industry in mind. I love machines, consumers, telecommunications, p2p societies, freedom, opportunity, and the market.
My favorite subjects are economics, optics, physics, and history none of which I have formal training in and all of which I use extensively in my day-to-day work and life. This will constantly come out in my writings.
I have spent some amount of time and effort with a most amazing non-profit and I will elaborate on my learnings from my experiences there.
I intensely hate order and simultaneously love it.
This space will be devoted to my view on the role of business in modern society. I am a reader of history and therefore I will also attempt to explore the history of business in society and trace its evolution.
I don't have a particular industry in mind. I love machines, consumers, telecommunications, p2p societies, freedom, opportunity, and the market.
My favorite subjects are economics, optics, physics, and history none of which I have formal training in and all of which I use extensively in my day-to-day work and life. This will constantly come out in my writings.
I have spent some amount of time and effort with a most amazing non-profit and I will elaborate on my learnings from my experiences there.
I intensely hate order and simultaneously love it.
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