Why business is the biggest charity

  New York University economics professor William Eastley once worked at the World Bank for 16 years as an economist at the World Bank. You should know that the World Bank is not a bank in a complete sense, but an international poverty alleviation agency whose purpose is to provide assistance to the poor countries of the world and help the people there to get rid of poverty and become rich.
  For the performance of this poverty alleviation organization, Eastley has written a book-“The White Man’s Burden.” He said in the book that in Africa, if every child can get 12 cents to get a shot, the number of people dying from malaria will be reduced by half. But in the past 50 years, Western aid to Africa has reached US $ 2.3 trillion, but this has not been achieved.
  However, Eastley went on to say that on July 16, 2005, Britain and the United States delivered 9 million copies of “Harry Potter and the Half-Blood Prince” to readers. Eastley asked: There has never been a Marshall plan for Harry Potter and the Half-Blood Prince. This is just an entertainment activity, but the two countries have done it very efficiently; Serious things are very inefficient. What is the reason?
  It cannot be said that the World Bank officials lacked love and ruined things; not to mention that the love of the British and American publishers was extremely large and that things were handled very efficiently. Human love is not much different. In fact, the reason is not the size of love, but the essential difference between the two modes of doing good and business.
  In practice, there are at least four reasons why doing good to alleviate poverty is difficult to achieve results.
  1. Lack of feedback mechanism. The most important point is that the market has a good feedback mechanism, while poverty alleviation does not.
  For example, in the market, a bowl of beef noodles is 10 yuan, and customers have two choices after eating: continue to eat next time, or stop patronizing. After seeing the customer leave, as a businessman, there are two options: either improve the quality or reduce the cost, otherwise the business will not be able to continue. However, philanthropy has no such feedback mechanism. Give away a bowl of beef noodles, no matter what the quality is, someone will definitely want it. Will the next bowl be given away? Most people would say, more. But charities do n’t know if it ’s right.
  In the business field, it is easy to pick out people who are good at doing business, because the standard is very clear: there are 10 people, each person is going to do business for 20,000 yuan, and they will come back in half a year. Just look at how much money each person makes. Can judge who is the person who can do business.
  In turn, if 10 people are given 20,000 yuan each to do good deeds. Coming back half a year later, there is no clear standard for judging who is the best person to do good deeds.
  2. Principal-agent problem. Many people who are responsible for specific good deeds, because they are not spending their own money, will be seriously compromised.
  3. Trusted non-human issues.
  4. The effect of raising lazy people. Continued poverty alleviation will cause people’s dependence and increase people’s inertia. People are unwilling to work hard on their own, nor do they want to fight anymore. On the contrary, what people are striving for is not striving upstream, but striving downstream. What they strive for is how to maintain the title of poor areas and how to continue to receive assistance.
  Due to the above-mentioned problems, the effect of doing good for poverty alleviation is often greatly reduced, and the expected goal cannot be achieved. As for business behavior, due to the coordination of market mechanisms and the encouragement of division of labor and cooperation, people’s living standards have been greatly, continuously and efficiently improved.
  Looking around, our daily food, clothing, housing and transportation rely on business support, and business has fundamentally changed our lives. The once-popular “sharing economy” cannot be separated from the capital support behind it. The original Shunfeng car still had free projects that passed the road, but over time, only “full-time drivers” remained in the market.
  From this perspective, business is the biggest charity.