During the holiday season in particular but occasionally throughout the rest of the year as well, people in the establishment media tell us about ‘giving back to the community.’ The idea is for business owners to support local charities or help the needy directly. There is nothing wrong with this sort of action. In fact, it is more likely to be efficient and effective than a government welfare program, and it is certainly morally superior. Private charity operations must compete for donations, which incentivizes them to be more efficient and effective in their efforts. They also have a better sense of who can be helped out of poverty versus who will only exist parasitically upon the good will of others. But the phrase ‘giving back to the community’ is misguided and dangerous. Let us examine why.
That one is giving back something to people implies that one has taken away something from those people. This can lead to a perception of legitimate business owners as thieves who do not rightfully own what they have, when the truth is quite the opposite. To the extent that businesses in a free market thrive, they do so by voluntary trade. They give customers what they want at prices they deem reasonable. The customer wants the business owner’s products more than he wants his money, while the business owner wants the customer’s money more than he wants his products. They trade assets and both are improved from their subjective points of view. As such, a business is always giving to the community and its profits are evidence of the value that its customers have received from the business, not evidence of any sort of theft.
If the charitable nature of business ended there, it would be good enough, but there is more. A successful business will be able to employ people. This allows people to accept a constant rate of payment for work done without having to take on the capital risks of starting and running a business oneself. This also gives the poor and the mentally deficient, who cannot start their own businesses, a path to prosperity and a sense of dignity. Employees working together in a business are also organized to be more productive than they would be if they were working independently, which results in better returns on the labor and capital invested by everyone involved. Finally, as mentioned earlier, local businesses have their ears to the ground in their communities in a way that faraway politicians cannot, making them better at providing solutions to local problems.
The idea that such benevolent activity to improve one’s community is somehow exploitative of that community is nothing short of communist propaganda and should be rejected as such. Businesses that donate to charities are not ‘giving back to the community’; they are giving the community even more.