What actually is a Business ?
The title of this essay will provoke cries of ‘oh !, of course we know what a business is.’
However, dear consumer, I ask you to pause, read the following, and re-consider what the actual nature of a business is.
The Accepted Definition
‘A company or organization that buys and sells goods or services.’
Source: http://dictionary.cambridge.org/dictionary/business-english/business
The Business Community
In the UK in 2014 5,200,000 businesses were recorded.
These businesses employed some 25,200,000 people.
The combined turnover of the businesses was £3,500,000,000.
In 2011 Private sector debt as a percentage of GDP stood at 194.04%.
Source: Dept. for Business Innovation and Skills.
Source: OECD Statistics
The Great Value - GDP
GDP, is an estimate of the total value of goods and services produced in any country, the Gross Domestic Product, the true monetary value of our economy.
Source: ONS and Telegraph article 6:43AM BST 15 Oct 2014.
It is also defined by the ONS as "the sum total of the final output an economy produces."
The Available Business Market – The UK GDP
GDP is therefore the sum of all the work of the business.
In 2011 the GDP of the UK was $2,295,520,000,000 billion US dollars, £ 1,526,682,657,115 UK pounds sterling.
Source: http://www.tradingeconomics.com/united-kingdom/gdp.
Comparison data.
In 2011 the GDP of the UK was $2.462 trillion USD (2011), £1,636,532,860,080 British Pound Sterling.
Source: World bank
Comparison data.
In 2011 GDP per capita in the UK was £23,860.
Source: ONS and Telegraph article 6:43AM BST 15 Oct 2014.
Comparison data.
In 2011 the UK population was 63,200,000.
Source: BBC 17 December 2012 Last updated at 18:23.
Allowing for the 2011 total UK population multiplied by the GDP per capita
= 63,200,000 x £23,860
= £1,507,952,000,000 total GDP.
Calculating the Nature of Business
Allowing for at least the rounded down figure of total GDP as existing in 2011 in the UK.
=£1,500,000,000,000
Total debt level of all businesses multiplied by total GDP
= 194.04% debt level x £1,500,000,000,000.
Private sector debt in 2011 in the UK.
= £2,926,030,100,000
Dividing this by the number of businesses in the UK in 2014.
= £2,926,030,100,000 / 5,200,000
Average debt per private sector business.
= £562,698.
Dividing the total turnover of all businesses by the total number of businesses.
£3,500,000,000 / 5,200,000.
Turnover per private business in the UK in 2014.
= £673
Private sector debt divided by combined turnover as a ratio
£2,926,030,100,000 / £3,500,000,000.
= 836 to 1
These figures indicate that the nature of a business is the production of debt, not wealth.
This reflects the nature of the world business system.
Debts = Repayments = Loans = Economic Growth = Debts.
Only those retaining the money or loaning it out at interest can be in profit.
To paraphrase the words of Charles Dickens character ‘Mr. Micawber’, of ‘David Copperfield’, to achieve ‘a recipe for happiness’. If applied to business in 2014 at the same ratio of debt to wealth would be
"Annual income £ 673, annual expenditure £ 562,698, result self-deception and consumerist happiness. Annual income £ 673, annual expenditure £ 16,720, self-deception, bank loans, consumerist happiness, result misery."
Therefore to place yourself into a business situation by taking on debt is foolhardy.
It is no longer a suitable method of creating wealth, the retention of part of the money supply, for yourself.
Retaining it or loaning it out are the only way to wealth creation.
This is what a business currently is.
Ian K Whittaker
Websites:
https://sites.google.com/site/architecturearticles
Email: iankwhittaker@gmail.com
03/02/2015
14/10/2020
599 words over 2 pages