In ‘The Role of Business in the Modern World’, Professor David Henderson argues that now, as in the past, the primary role of business is to act as a vehicle for economic progress. This role depends upon business enterprises operating with the framework of a competitive market economy. If we ask businesses to achieve broader social goals, we risk undermining the very system in which business activity leads to opportunity and prosperity.Professor Henderson describes the unprecedented material progress that has occurred in the last century as a result of the wide-ranging entrepreneurial opportunities and competitive pressures that exist within a market economy. The material prosperity created by the activities of business is threatened by the ‘global salvationist consensus’ that has arisen in recent years and which seeks to change the role of business via the doctrine of corporate social responsibility. Professor Henderson shows that this consensus is based upon a set of fallacious beliefs about the nature of capitalism, profiteering and business enterprise.
together and organizing land, labor, and capital.
What are the role of business in society and the economy?As with the opening sentence, the role of business is vital to our society and economy. Businesses don’t just satisfy our needs and wants through the products they produce. But, they also create jobs and income in the economy. In addition, competition between them encourages innovation and efficiency, making goods and services cheaper and of higher quality.
Satisfying our needs and wants
Businesses sell goods and services to satisfy our needs and desires for profit. So, without them, we would have to produce everything ourselves, including our food and clothes.
Then, businesses also have to compete with each other. To keep the money flowing, they must deliver higher satisfaction than competitors do. Competition forces them to be more efficient and innovative, leading to lower prices and better quality.
