The fundamental Principle of Business

Business is one of the most important fields in our lives.  We buy, sell, and trade every day.  It seems that business is an integral part of human nature; there are evidences of business activities of ancient people (over 4000 years ago) who calculated interest by time.  It is not difficult to understand why business is part of human nature since it shares the basic instinct of survival – to outcompete and thrive.  Throughout this article, we will explore ‘how did the business begin and why?’ and take a look at a broad picture of ‘what does current business look like?’

The beginning of business

Records of business activities dating from 3000 B.C. have been found.  This implies that there were business activities even before the recording started.  The question is ‘how did ancient people know how to do business?’  To answer to this question, we will need to take a look at the business itself.  Business includes buying, selling, and trading something.  Ultimately, the basis of business is money.  However, when we consider the time when people did not have money as a symbol of value, there shouldn’t be concepts of buying and selling.  Instead, their business sense would simply be to give, receive, and exchange.  Thus, the real question is that ‘why did they do these activities which were same as business activities?’  The answer could be as simple as ‘to increase survival chance’.  Humans are physically not as strong as other animals, instead it is our ability to think that has allowed humans to thrive. One way humans increased their chances of survival was to work together to hunt, to farm, to protect the community.  Once the basic needs of survival were ensured, humans had time to develop new skills and knowledge that was shared within the community.  As tools evolved, ancient people started to do more than just sharing.  Because some people would be good at hunting, some would be good at farming, and some would be good at making tools, they needed to develop certain ways to support each other more than simply sharing.  They started to exchange and this is when business (as we know) was born.  They exchanged their products not with money but with products.  If we consider that some products are seasonal, it is easy to understand that the ancient people must have developed ways to exchange for later payment.  For example, if it was not the season for certain crops to harvest, farmers would get some meat from hunters now and repay later when they harvest their crops.  To make the process easy and simple, people developed money to symbolize the values of their products.

Business in modern-day

Businesses of today seem to be represented by monetary value.  In other words, making money is the goal of all businesses.  This is understandable since money represents all the products and services that people can buy.  However, there is one important fact that we tend to forget as consumers because of money.  That is determining the “VALUE” of products.  Since ancient times, the value of products was determined by the consumer and producer/seller.  For example, if I am a farmer and I want to buy some meat, I would have to negotiate with the hunter.  This means that the value is not fixed and it is also highly dependent on my need of the meat.  When there is an agreement reached between the hunter and farmer, the trading occurs.  This is the rudimentary basis of businesses.  However, we find a little odd consumer activity these days.  Some people buy products simply because they are on sale.  Since money represents ability to buy products and considering that the product is on sale, it seems to be good decision to purchase this product for a lower price.  However, this is the way that makes people’s banking accounts dwindle.  For example, I bought a smart phone that was on 80% sale.  I already had a similar product but I bought the new one because it seemed to be a great deal (only $50.00).  However, after using it a few times, I realized this is not very different from the current one that I use.  So, I decided not to use it for now and save it just in case that my current one breaks.  After about a year, there is a new smart phone model on the market with more functions that I had to buy and ultimately tossed the old ones.  In this scenario, I bought a product that seemed to be a great deal but I didn’t use it much.  This means I spent $50.00 for this product simply because it is a good deal.  Basically, I am out of $50.00 for nothing.  This happens because people symbolized the money for everything.  It is not “I” who determines the value of some products but it is the money determining my will to buy something.  Thus, I am now a slave of money.

Business should be The money system can collapse at any time since many people are enslaved by it these days.  It is simply because people do not determine the value of products by need.  They determine the value of products by the value of money.  When the economy is not healthy enough and consumers don’t buy products they don’t need, it causes a chain reaction that result in the collapse of many businesses.  Since these businesses are based on the value of money (not based on need), our current monetary system could collapse together with businesses anytime.  Furthermore, when the value of money collapses, the whole system as we know it will go down together.  We call this recession.  During the recession, any businesses that rely on the value of money will suffer severely.  On the other hand, any business that determines the value based on peoples’ needs will survive relatively easily because these businesses are not slaved by money.  Thus, to have stable businesses or individual economics, people need to train themselves to determine value of the products by ‘NEED’.  This is the way all business practices should be.