Business and Social Justice

Basant Potnuru
‘Business management’ means to coordinate work in a more organized way to achieve a set objective – in most cases private profit, using available resources parsimoniously. The classical and non-classical economists starting from the days of Adam Smith believed that what was profitable for an individual was also conducive to the economic welfare of the community at large.  That is, the sum of individual welfare is the national welfare. By this idea, there is perfect harmony in the economic system with the pursuit of self-interest by all individuals. But, the question is, does this harmony meet the social justice?
Social justice means all people should have equal access to wealth, health, well-being, justice and opportunity. Equal access here means that everyone has access to health, wealth and well-being according to their needs without depriving anyone of them. The problem is that, since the self-interests are guided by an ‘invisible hand’ – the market forces, and the market forces are not equitable in responding to all wishes and needs. Because it only responds to those wishes and needs that are being expressed through sale and purchase of goods and other that could not reach to the market are unattended. In other words, market forces treat people without resources as untouchables and do not recognize them as economic actors or agents. When this happens in society, it limits the size of the market just to the participating actors, and do not cover the entire potential market.
This kind of unequal development is socially unjust, inequitable and economically unstainable. J. M. Keynes commenting on this kind unequal capitalistic development said, “The world is not so governed from the above that private and social interests always coincide”. He, however, recommended a compromise formula putting the onus on the state to introduce checks and balances on the objective of private profit, and doing pump-priming – the autonomous investment. Today, with greater integration of economies and rising economic inequality on the one hand and the constrained role of the state on the other, the effectiveness of the state pump-priming to address economic inequality and social justice problem is however limited.
Therefore, the private sector has a role to play in addressing this problem. The young and aspiring business managers with innovative ideas can plan and strategize their businesses in such a way that it is not only just or equitable for the society but also profitable and sustainable for themselves. The following propositions would be helpful for the young entrepreneurs to make their businesses socially inclusive.
Avoid competition and find a new market
Finding a new market means bringing in new actors who could not participate in the market earlier because the market was either expensive or inaccessible. A best possible way to do this is to expand new and innovative ideas of businesses to the rural areas enabling the rural people to become the customers and participants of the markets. This is a viable option for the young entrepreneurs because they can start business with a small investment and little competition. Such initiative, when earn repute being beginners and pioneers of the new market, have a larger chance of success and sustainability. The work of Arunachalam Muruganantham (on screen Padman) is a glaring example.
Use of indigenous technology
One need not go after high-end technology all the time to make the business attractive and successful. These days, there is a mad rush among the young business managers to adopt cutting-edge technology, build apps, introduce automation, etc., irrespective of the fact that they are actually needed or not. Such startups will find it difficult to sustain. Use of high-end and high-cost technology is called for only when there is no other alternative. Use of indigenous technology is the way forward for socially equitable and sustainable business.
Avoid assuming monopoly
Monopolies not only causes waste in value creation and impose a deadweight loss on the society but also narrows down the size of the market and raise income inequality. Companies with a high concentration of economic power tend to limit the market to premium customers with inelastic demand, instead of increasing the scale and expandingthesize of the market.
These aspects and many othersone can think off in these lines may help address the social justice problem through equitable businesses.
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