Thursday, June 6, 2013

Thought for Day Four: The Business of Giving People the Ability-to-Pay

Again, if the problem is the ability-to-pay rather than simply solving extreme poverty, a different path of thought develops. It is no longer about giving people the food that they need to survive but about need to develop economic activity that will sustain the population in a way that will allow them get what they need.

The solutions are different depending on local realities but one core reality is common. In order for any or all people to have the ability to pay for anything, real value-adding economic activity needs to occur. All salaries and wages in a society need a source of funding. Funding is money. A sustainable source of funding requires a steady positive cash flow. Governments need revenue (taxes or otherwise) to deliver services. Government revenue (taxes or otherwise) need income to take from. The one core reality is that all self-sustainable local economies have organized profit-making (value-adding) activity.

Business could be defined as the pursuit of profit-making economic activities. While arguments can be made that highlight specific economic inefficiencies, it still remains that economic growth is needed to fuel the ability-to-pay for a greater number of a growing population (global or local). Economic growth requires growth in real value-adding economic activity. And no matter where an individual's views sit on the ideological spectrum, the cold fact is funding is needed to sustain a society.

The complex challenge can be framed by looking at the combined facts that healthy business activity is required to provide a population with the ability-to-pay, and that food must be produced in a quantity to sustain a growing population into the future. To complicate things even further, business generally needs a growing population with the ability-to-pay in order to grow.

That means business cannot be shackled in a way that limits its ability to provide the funding to pay for what the people need and that business must not trample on on the ability to produce food in a sustainable way into the future. In the end, this also requires a global perspective and involves finding ways to give more people the ability-to-pay in an environmentally-sustainable way.



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