Capitolism

Independent in All Things, Neutral in Nothing

Uncertainty and Business

with one comment

The Wall Street Journal’s article on uncertainty causing issues for small business excellently examines how and why political decision making impacts small business decision making so profoundly. Certainly, large business can feel the effects of political intervention or policy debate, too.

The article does not explore another source of tremendous uncertainty – unstable monetary values. If business owners cannot predict, with some level of assurance, what their dollars will be worth in six months or a year or two, they cannot make wise investment decisions.

Many writers and many of my friends know far more about this subject that I do. But I posit that monetary uncertainty has caused at least as much hesitation on the part of small business owners as any political decision made or under consideration.

Of course, a business never has complete clarity in its decision making; uncertainty, fickle customer behavior, and tough-minded competition necessarily injects uncertainty into the business environment. But those forces, ultimately, derive from the market, which sends necessary signals for effective response to wise business leaders. The pernicious aspect about monetary uncertainty, in the modern world, is that business cannot adequately analyze all the possible outcomes and still manage operations – especially in small businesses.

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Written by Russell S.

October 30, 2009 at 3:40 am

One Response

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  1. You’re right. If the dollar’s value can swing 30 percent as it has in the past 12 months, it’s like trying to navigate with a compass that doesn’t point true north. Better off staying where you are.

    Sean R

    October 30, 2009 at 2:57 pm


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