We may equally say: the enterprise is the only entity whose raison d’être is economic exchanges.
1. This proposition is a definition in the vocabulary of economics, in the type-theoretic sense of SysFEAT.
The definition of the type of enterprises, by a property that every enterprise has and that enterprises alone have, applies to any enterprise regardless of the following characteristics, each of which partitions the type into subtypes:
Since a definition is also a vocabulary convention82, let us reserve, in economics, the unqualified term “enterprise” for the commercial enterprise, whose other main specificities are reviewed in the rest of the chapter.
2. Not all human enterprises are commercial.
Families do not exist solely for the practice of economic exchanges. Human beings engage in other kinds of exchange. Their enterprises are far from all being commercial. States do not exist solely for the practice of economic exchanges.
3. The state cannot be treated as an enterprise.
Economic exchange is not the raison d'être of the state (preceding argument). The state buys labor, supplies and credit, but these exchanges are means to it. It does not buy placement in capital, the elementary commodity that only enterprises buy (3.7); it therefore has neither capital (5.7), nor profit, nor earnings. Its resources come mainly from the public levy, that is, from taxes and loans, and loans are repaid out of taxes. A tax is a forced transfer (1.3), which only the public authority has the power to levy83.
It follows that the management rules of the enterprise that derive from its economic character—rate of return, profitability, earnings targets—do not apply to the state. Applying them confuses rate of return, which relates a margin to investments, with the effectiveness and efficiency of the public authority: the attainment of its objectives, and the relation of this attainment to the levies consented to.
This assimilation nonetheless remains frequent, because the specificities of the enterprise are still little recognized. The enterprises that the state owns or operates (3.1; 3.8; 4.1) fall, for their part, under the rules of the enterprise: they remain distinct from it, as every enterprise is from its owner (3.6).
4. Enterprises are crossroads of markets.
Savers make placements in it in return for income. Workers provide services in return for their wages. Other suppliers supply it. Customers buy from it what it offers for sale. Only in enterprises are there economic exchanges of these different categories.
5. Enterprises create outlets.84
This creation is carried out through three types of offers. The first are made to savers, the second to workers, the third to customers.
These offers are indispensable to the increase of the purchasing power in circulation, whose makers are, in the last resort, savers and workers. Managers are its organizers.
Enterprises are economically indispensable because of the outlets they create and maintain.
6. Wealth extends beyond economic exchange value, and creating that value is not the preserve of enterprises.
When enterprises are said to create wealth and value, the wealth meant is market wealth, and the value is economic exchange value, joined to utility, or use value. Market wealth is a part of wealth: the tools, food and clothing that their owners produce and keep for themselves are wealth that never enters exchange (1.1). Enterprises take part in creating market wealth and its value: they buy commodities and sell composite commodities (2.14), which carry utilities. This participation makes them economically indispensable. But the act that creates economic exchange value is the exchange of elementary commodities, labor and placements (2.13): the wage-earner or the saver who supplies one in exchange for its remuneration creates exchange value (5.5). The population derives its income from the sale of these commodities (2.17). Enterprises are not their only buyers: households, non-commercial associations and public administrations also employ wage-earners (2.13, 9.8) and buy placements in credit when they borrow. To call enterprises the creators of wealth and value is therefore tendentious: it turns the enterprise into the deus ex machina of economic life, one of the faults of economism.
7. The morality of an enterprise lies first in the equity of its exchanges.
Economic exchange and the economic gift have a morality that is potentially as positive in the one case as in the other (1.2). Since the enterprise exists solely for economic exchanges, its morality lies first in the equity of the exchanges it practices: wages, prices, interest and profit (Part I, “Economy and justice”; 6.3). Management that fails to recognize this looks for morality outside exchange and manages exchanges as if they had none. Several current practices follow from it: – philanthropy, sponsorship and social-responsibility programs are presented as the moral part of the enterprise, while its wages, prices and dividends are judged by financial yardsticks alone: the end, a good use of the money, would justify the means (3.2); – wages are managed as a “cost of labor” to be minimized rather than as the price of an elementary commodity owed in fair exchange (chapter 9; Guideline 4); – earnings are retained and placers in capital are left to be paid by a capital gain: the placement is used without being paid for (3.2; 3.7); – labels such as “fair trade” or “social and solidarity economy” stand in for selling prices close to their sufficient levels, which are fairer for customers, wage-earners and placers in capital alike (11.11; Guideline 7). Conversely, a gift is not moral by nature either: public subsidies to enterprises, sought as support, are transfers that distort the exchanges they accompany (Guideline 4).