A real business is either a response to an existing market demand, or a response to a predicted market demand. Both have the potential to create wealth.
There is a third type of business. These are brought into existence in order to comply with, or avoid, regulations or taxes. Examples would be such things as tax accountants, bookkeepers, tax lawyers and regulatory consultants. Specifically, my industry has a growing demand for consultants to explain how to cope with the demands of the Health Department. These quasi-businesses are expensive. During my business life, my admin costs have gone from a few dollars a week to around $1,500 a week – probably closer to $2,000 now.
This third type is not a business in the sense that it is creating wealth. Nothing of value is being created. On the contrary, they help people minimise losses to their wealth. In the process, a part of that wealth is transferred to the consultant, bookkeeper, tax expert etc. No wealth is actually created, but, if the job is done properly, less wealth is destroyed.
Essentially these businesses have been brought about not by the perception of a market need, but by the perception of a need to neutralise, if not circumvent, government.
The above was an observation that I made from behind the cash register in my business. I noted that more and more of my customers (well-paid people) were employed by ‘businesses’ that no longer created any wealth.
People create wealth; governments destroy it. How much wealth destruction can a society tolerate before it cannot?