I grew up in a family that was running its own business. Business was therefore a natural part of our family conversation. It could be my father’s worry about a customer that were paying too late, a large project that was delayed, employees that didn’t perform well etc. Or the joy when a new project or a new large customer had been successfully assigned. I experienced both economic constraints and upsides in my family as a child.
My father had one rule however (that I have adapted myself); we were not allowed to discuss money when we were sitting around the table to eat. Anything could be discussed, but not money or worries related to economic questions.
Business Was Not About Becoming Rich
By the way, I never remember we ever talked about doing business to become rich. It was almost a taboo I believe. But I do remember we were “indoctrinated” about how we had to be careful with resources and not to become “complacent”.
From I was 16 years old I helped my father to do the VAT (Value Added Tax) declaration for his company. It had to be done every second month, and this way I got a first-hand insight into the earnings and the costs of the business. I had to learn when doing. My father was not very organized when it came to paper and I had to establish some simple procedures to make sure I did it right. The repercussions from the tax authorities would be serious if we reported something systematically wrong. It was a lot of money involved so integrity and honesty in what was done was imperative. I must admit that even though I liked to do this kind of work, I was relieved when he eventually had a full-time staff to take care of it.
The Importance of Business in Our Lives
To my brother and sister and myself it became a part of our DNA that business is a necessary part of life in order to put food on the table. We understood quite early that money does not come just because someone is paying you a salary. You need customers that want to buy what you make, you need delivery capabilities, you have to pay people a salary for their work, the suppliers need to get paid for their services and the authorities want your taxes. I think we learned to handle complexity and that business is not about “making money” but about behaving professional and treat people with respect. Money will be the result, but the input is hard work and respectful behavior towards the resources you handle. By the way my siblings and I are all running our own businesses today, in different corners of the world.
When I was young, I participated in political youth work and I also worked for a short time in the public sector. With my background it was easy to see that there was a very poor understanding in these environments that everything is actually paid by the many small and large businesses. Without men and women that take huge risks and work really hard in order to make a business, there would be no taxes to provide the public sector services. It would be no resources for politicians to promise and demand improvements of welfare and increased taxes.
The Paradox of Welfare and Business
It is a paradox that when the welfare reaches a certain level. The understanding of how welfare is connected to businesses first creating wealth is lost. Education, healthcare, entertainment, infrastructure, is all there. “Everything” is taken care of, so why worry about where the money comes from. As a matter of fact, business becomes something bad, and something that needs to be micro-controlled. Business, the very source of our welfare, is undermined because it becomes a source of continuously increased taxations and regulations.
If business is seen as something speculative and only about making money, then “money” will become speculative as well.
The Importance of Global Trade
The global markets through which we can trade and share diversity of skills. And products are the source of our standard of living. That some parts of the world are poor is not because of this global exchange. It is because of bad leadership and ineffective structures. We need more global trade, not less. The trend to become more and more local and national is worrying in this regard. If we only trade locally with each other. The products and services very soon will become poorer, the prices higher. Because choice and diversity is what benefit the consumer and promote good business. I do not believe in the so-called “short travelled products”, that are increasingly popular at least in Europe.
I do strongly believe in giving children an early understanding of what money is. Explain that the purpose of money is not to make you rich. Money is a mean to establish a value on what we buy and sell to each other. Instead of exchanging products and services with each other (called barter economy), we use money to buy and sell products and services.
The Genius of Money as a Human Invention
To me money is the most genius of all human inventions ever. An imaginary, abstract value that we cannot eat or consume in any way. But we can all agree that money has a certain value, so we can exchange it with some real value that can be eaten or consumed. We mutually trust that everyone will accept it as a mean of payment, in order to simplify and promote trade.
This is the single reason we are not still all making our own fish-hooks, catching our own fish, hunting the hare, milking our cows, making our own clothes and bringing it all to the market to exchange it for animal oil to light our poor cabins. That was not romantic or a good life, it was a life with time for nothing but hard work. Health conditions were terrible, and people died young. That this is still the reality in large parts of our shared planet makes me sad. There is no larger political mission in my opinion than to bring people out of poverty.
The Value of Hard Work and Human Ingenuity
Values are created through hard work and human ingenuity delivered through companies doing business with each other, and with you and me. Make children understand what business is about, and that more diversity and more choice is good for us all. More trade and more business make us all wealthier. The “small” challenge is of course that it requires justice and fair distribution of wealth and no corruption that will poison any system.
There has always been I believe, a tendency to make everything problematic and negative. Our children today are afraid of global warming, pollution, waste, and self-inflicted illness. Because they are indoctrinated with this through schools, media and adults. Explain to your children that the waist, pollution, injustice, poverty is not because of business or money but because of human arrogance, stupidity and greed and that the answer is not to regulate our freedom to do business with each other.
ABOUT AUTHOR
KJETIL SANDERMOEN
Kjetil Sandermoen is a global strategic management consultant, founder of the University of Fredericton and Sandermoen School of Business. A Norwegian by birth and staying in Switzerland for over a decade, he founded Sandermoen publishing and Sandermoen Learning solutions. He authored many management books and is a regular columnist in several international magazines.