What Is Business?
EXACTLY what do we mean by the term “business”? Try to explain fully and completely just what business is, and you will discover that you are explaining the outstanding facts of American life. In explaining business, you go a long way toward explaining what made this country the best place in the world to live in.
We in the United States are only 7 per cent of the world’s people. We own half of all the wealth in the world. We have 71 per cent of the world’s automobiles, 52 per cent of its telephones and 40 per cent of its radios. How did all this come about ?
Why is the standard of living in America higher than anywhere else? Why are we so well off that we consume one-fourth of all the sugar produced in the world, one-fourth of the coffee, and three-fourths of the silk? Why do we use one-half of the world’s production of coal, and one-half of all the electric power? All for a mere 7 per cent of the world’s population!
If you provide a complete answer to all these questions, you will also have given a good answer to the question “what is business,” for it is through the workings of business that America has won economic leadership. Without our highly developed business mechanisms, 45,000,000 willing workers could never have produced our unparalleled standard of living, not even if all the earth’s riches were beneath our soil and if all our farm land were the most fertile in the world. Collectively, business is merely the production and exchange of commodities. Individually, businesses in this country are a million separate enterprises, producing, selling, and transporting things, and financing the flow of trade. Business men are the people who make a living by conducting these million separate enterprises and who take the risks of owning them. From the corner grocery to the big steel company, each independent unit in our business system is working hard for that success which can be gained only by serving and satisfying its customers.
Business is good when these one million separate businesses are busily making and exchanging their products. They do this when costs and prices are in proper balance, and when the existing purchasing power is actively being used by consumers and by industries in buying from one another.
Businesses stimulate buying activity by offering better merchandise and more attractive values, and by advertising them widely. This is the way all new industries have been built. It is the way business operates normally in building prosperity.
Whatever else may have helped, the American spirit of business enterprise has been the mainspring of our progress, aided at every point by the use of good advertising in distributing the products of industry. The high standard of life in America is an achievement of business, and it is not the nature of business to be satisfied with past performances. The imagination is challenged by goals of the future.