The True Cost of Doing Business

The True Cost of Doing Business
David Schlecht

While walking around our neighborhood, today, I noticed a business driving around tossing out little plastic packets of coupons, leaving them in the gutters, on the sidewalks, in our driveways, on our lawns, in our flowerbeds, and who know where else. In a “reasonable” society, this would be fined as littering. In our world, this is considered “doing business”.

This particular business has arranged to have the neighbors and the tax payers pay to puck up the by-product or the cost of doing business. What a deal. If you and I decided we could save a couple bucks throwing our trash on the businesses properties and driveways and homes, we would be hauled off to jail, so why can they get away with it?

This is only one very simple example of businesses sloughing off the cost of doing business onto society. In the case of this particular business model, the tax structure for the business must include the cost of cleaning up after the business, or better yet, requiring that the business clean up after itself. They should also be required to reimburse the society for the time and cost they put into the cleanup process. Sure, it’s only a couple dollars per packet, but it would better define the success of the business model if they had to clean up after themselves.

We can take this example to the next level. There was a gravel pit up the road where a construction company was mining out gravel for doing some nearby road work. Now that the road work is done, the gravel mine is abandoned and the damage from the strip mining gapes like an open wound at the drivers who pass by, on the newly repaired roadway. The construction business, like any mining operation is causing damage to the environment that they should be repairing. First off, the businesses should be required to repair the damage they do and the tax structure should be set up so that regulation of these repairs is paid by the business, not the rest of society.

Let’s look at this topic from a higher perspective. All businesses should be required to retain the environment in a pristine condition. Costs to the environment must be taxed to the businesses, and those taxes must be used to restore from the damage. Where else does society pay for the cost of doing business? Let’s list just a few.

  1. Regulatory agencies for policing the businesses
  2. Infrastructure for providing access and services in and out of the business
  3. Legal infrastructure for providing a means of redressing grievances with and between businesses. This, of course means the cost of police services, fire services, legal services, laws, courts and such.
  4. Medical services to those affected by the businesses. In the case of nuclear power plants, surrounding neighborhoods pay for centuries after a nuclear power plant fails. This also includes the cost of medical services to heal the millions who become sick each year from the sale and burning of gasoline, ethanol, coal and other fuels.
  5. The cost of cleaning all the carbon out of the environment.

This short list obviously only addresses a small fraction of the costs that businesses should bear but that are pushed off on society instead.

Why do we let this happen? If  businesses can’t remain profitable while cleaning up after themselves, they shouldn’t be in business. It’s that simple.

Now that we’re in the process of cleaning up our financial system, maybe it’s time we started requring businesses to pay their won costs of doing business.

3 thoughts on “The True Cost of Doing Business”

  1. Good post! One of the biggest expenses is what we pay to keep the oil companies in business. The majority of our military expense is spent on keeping the oil flowing. Shouldn’t the oil companies be paying this with their billions of dollars of profits?

  2. Are you sure you’re ready for so many companies to go out of business? And how about living without oil or minerals?

  3. You missed the entire point of the post! We’re already paying those prices, it’s just that it’s not included in the price at the pump where it really should.

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