Businesses Don't Have To Give Back

I submitted the following response to an article from the San Antonio Express-News. See 'Giving back’ benefits community and business.

Dwight Lieb’s call for businesses to “give back” to the community was both confusing and disappointing (“Businesses that give also receive,” Dec. 1).

 

He claims giving back will help a business. It “adds a level of marketing to your small business that money can’t buy.”

 

He also says it “improves employee morale.” Well, better marketing and employee morale will likely increase the profits of any business.

 

That’s okay. There is nothing wrong with businesses increasing their bottom line.

 

But what about giving back “making our community stronger?” That sounds good but it raises the question of how much any person should give or if they should be forced to give. There is no objective answer to that question.

 

Then there is the issue of what “giving back” means. Does it mean you or your business took too much in the first place or that you profits were unfairly high?

 

If you used force or fraud or violated anti-trust laws, sure. But we have legal remedies for that and if a business “gave back” it would not absolve them of their crimes.

 

Mr. Lieb even goes so far as to say “all small businesses need to give back to the community.” I disagree. They don’t need to because by their very existence and success they have improved their communities.

 

What Mr. Lieb and other business owners essentially do is a complex, sophisticated version of simple trade that makes people better off. Let’s look at an example.

 

John has bread but no water. Mary has water but no bread. So John trades some of his bread to Mary for her water. They are both better off.

 

Does either of them owe anything to anyone else now that they are both enriched? No, absolutely not. There is no mythical community to give back to.

 

It is the same of any business or economic activity in the real world. We all specialize and then trade and are made better off. We don’t have to give back to anyone.

 

If a person willingly pays to eat at La Fogata, Mr. Lieb’s restaurant, they do so because it will make them better off. It’s true because I have enjoyed dining there and did not feel cheated.

 

The same thing is true when a worker applies for a job there or a supplier sells equipment or ingredients to Mr. Lieb. Those are all voluntary transactions that benefited both sides. There is no one to give anything back to.

 

Entrepreneurs like Mr. Lieb are the heroes of our economy because they create and stimulate all of this trading activity where both sides benefit. And they do so at their own risk. If their business goes under, the community does not bail them out.

 

We should not ask entrepreneurs whose risk taking benefits all of us to give back. They don’t owe the rest of us anything at all.

 

They already made the community great by bringing us a diversity of stores and restaurants and services that meet our needs. To say that those business owners need to do more, as Mr. Lieb argues, is unfair.

 

Profit has become a dirty word in our country. Ian Hathaway and Robert E. Litan of the Brookings Institution report “a pervasive decline” in new business formation “in the United States during the last few decades.”

 

When we say businesses need to give back we imply that they were doing something unfair in the first place. I don’t think that’s true but this message may be steering young people away from careers in business and entrepreneurship. That should change.