On September 5, 1955, the indomitable Walter Reuther, a prominent labor movement leader and leader of the Congress of Industrial Organizations (CIO), began his Labor Day message to Americans by commemorating all that the unions had achieved of higher wages to higher wages, greater dignity in the workplace. Reuther, who had been the architect of the sit-in strikes that unionized the auto industry and who became a key ally of Martin Luther King Jr., then turned to another issue: the conditions faced by the country’s small business owners. “Big companies get more and more from the market”, he complained.
The CIO wanted to fix this problem. The legislative platform during those years called for the tax burden to be reduced on small businesses, for them to be given more credit and for enforcement of antitrust law to be stepped up. In 1957, the union federation, which had now become AFL-CIO, welcomed a Supreme Court antitrust ruling against General Motors and DuPont. The decision, the association reported, set a legal precedent that would help small businesses not to “huddled mercilessly. “This year the AFL-CIO required a “thorough investigation of the monopoly and legislation protecting the legitimate interests of small businesses”.
Reuther’s support for small business wasn’t a strange anomaly in left politics. For much of the 20th century, working with small businesses was allied in the struggle for a fair economy. For decades, beginning in the 1930s, the Democratic Party counted organized workers and small businesses as a core component and made their welfare a central concern of its political agenda. This fact surprises many today because it is a story that has long been abandoned. The shift took place in the 1970sWhen the Democrats welcomed the rise of large corporations, they argued that these large entities would be easier to unionize and provide more for consumers. In return, the Liberals saw small businesses as not worth fighting. They have been irrelevant to the left’s vision at best and an obstacle to it at worst.
Around the same time Conservatives realized that they could lay claim to and reformulate small business policy to advance an agenda that serves the business elite: tax cuts, weakening of democratic institutions and dismantling of work and environmental protection measures. The dark irony of this platform was that it increased big business’s market share at the expense of small. But the right-wing small business rhetoric was so successful that many on the left believed in it, and it reaffirmed their notion of small businesses as inherently regressive, contrary to workers’ interests and against democratic values.
However, a look at trends over the past 100 years suggests that a reassessment is warranted. The fate of working people and small independent businesses has risen and fallen more or less simultaneously. The heyday of the trade unions in the mid-20th century was also a time of flourishing small businesses. The 1970s was also a turning point for both of them, albeit a terrible one. The number of unionized workers and small businesses has decreased over the past 40 years. Inequality has again increased sharply.
It seems the left got it wrong. Independent companies have been crushed by the same concentration of corporate power that has weakened unions. It’s not just that these groups have common enemies, from Amazon to Tyson Foods. A resilient small business sector distributes power, which has significant economic and political benefits for the working population. Rebuilding small businesses is therefore vital to realizing the left’s vision of broad prosperity and thriving democracy. This is also the key to developing a coalition and policies that can make the Democratic Party more attractive and deliver reliable majorities in Congress, especially in the Senate.
This task has become urgent in the wake of the catastrophic reaction of federal politics to the Covid-19 pandemic. Tens of thousands of small independent businesses have already been wiped outwith black-owned companies take the biggest hit. Many more are at risk. Her death would further cement wealth, reduce worker leverage, and accelerate the breakup of small towns and neighborhoods. Ready to fill the void are some of the most predatory and extractive forces in our economy, including tech giants, private equity firms, and dollar retail chains. At the same time, the shocking presidential election made it clear that Democrats have to govern differently if they want to fundamentally change the voting card. All of this has long since made it a thing of the past for the left to take a fresh look at the economy and politics of small businesses.
IFor many, it may be difficult to imagine work and small business as natural allies. But at the time of the New Deal and in the decades that followed, the Democrats believed that concentrated private power was the greatest threat to the nation’s democracy and the well-being of its people, and they made the dispersion of economic power an overarching goal of their agenda. Strengthening unions to give workers more say was one way of doing this. Another was to protect small businesses and family businesses from the predators of Wall Street and monopolistic corporations. So these two strategies fit together.
As Franklin Roosevelt Put itThe struggle was between the great “units of finance and industry on the one hand and the great mass of workers and small business owners on the other”. A central goal of the New Deal, he saidwas to secure “economic freedom for the wage earner and the farmer and the small business owner”. He and his allies in Congress pursued this agenda, using antitrust laws to review corporate power, pass fair labor laws, and pass policies that kept banks small and locally focused. Campaign in Cleveland in 1940, He described his vision of an America free from poverty and domination, “Where no businessman can be oppressed by the hard hand of monopoly … where the workers are really free and … their big unions are not dominated by any outside force.”
This way of thinking and governing has been prevalent in the Democratic Party for decades. James Murray, Democratic Senator for Montana from 1934 to 1961, was loved by his state’s mining, logging, and railroad workers for his strong advocacy for workers’ rights. He was equally vigorous in advocating for small businesses and spent six years helping to set up the Senate Special Committee to study the problems of American small businesses. The results of the committee Years of aggressive antitrust enforcement against large corporations fueled the foundation for the creation of the Small Business Administration. Another Democratic leader of the period was Estes Kefauver, who served in Congress from 1939 to 1963. The son of a hardware store owner in Tennessee, he was a lifelong advocate of organized labor and small business. In 1950 he co-authored a major expansion of the country’s antimonopoly laws.
Income inequality shrank dramatically over these decades. Though people of color and women were deliberately excluded from many of the benefits of the New DealThe gap between black and white earnings has also narrowed in these years. Some have attributed the achievements of that time to monopoly capitalism, pointing to industries like auto and steel where large unions negotiated with large corporations. However, this is a completely incomplete picture of the economy of the time. In many sectors – particularly banking, agriculture, and retail – the New Deal policies made small businesses predominate. More than 70 percent of retail sales went to independent retailers with a single location in the mid-1950s. Of the nearly 9 million people in retail at the time, nearly 2 million owned the business in which they worked, either as sole proprietorships or in partnership with others. The expansive middle class of this era was therefore based on two types of business agencies: the ability to bargain collectively and the ability to start a business.
P.Because of the success of this policy, concerns about economic concentration disappeared from public discourse in the 1960s and 1970s. While antitrust enforcement remained vigorous, Mentions of monopoly in newspapers and books decreased as Americans turned to other subjects. This paved the way for a new faction within the Democratic Party in the 1970s. This new group of liberals distanced themselves from both workers and small businesses and instead included large corporations that they viewed as good for growth and rejected concerns about the political nature of their power. That faction redesigned Congress and elected Jimmy Carter, who, amid the confusion of the oil shock and runaway inflation, began dismantling finance and transportation regulations.
Ronald Reagan continued this project in a comprehensive way. Under the influence of Robert Bork and other Chicago School scholars, his Justice Department has all but gutted our nation’s arsenal of antitrust laws. Bill Clinton went even further. In 1992, for the first time in over a century, the Democratic Party’s platform contained no evidence of monopoly power. He then carried out a multi-year effort to repeal the Depression-era laws that had restricted the size and reach of banks, protected the economic security of smallholders, and ensured the dispersion of ownership of the news media. Barack Obama followed suit and allowed Amazon, Facebook and Google to grow unhindered and take control of much of the infrastructure for trade and communication.
The Democratic Party’s new stance was that independent corporations did not play a major role. To the extent that the party continued to talk about them, they were mostly growth-minded “entrepreneurs” creating a “new economy”. The message was clear: small businesses are only valuable insofar as they can grow big. The neighborhood bodega and local hardware store had become irrelevant. Their contributions to a democratically structured economy and their role in the life of their communities were no longer recognized, let alone protected. In 2001, Senator John Kerry underscored that shift when he did changed the name of the Senate Committee on Small Business to the Committee on Small Business and Entrepreneurship to better illustrate its focus on “high growth companies”.
When the left gave up small business, the right took the opportunity to reinvent small business policy. “Small business owners like you are the risk takers in America.” Reagan stated in a speech to builders in 1983. “Who better to explain it? [to] Washington’s political elite that … free enterprise, not government, is the source from which our prosperity emerged? “
Before the 1970s, the U.S. Chamber of Commerce had no interest in discussing small business problems. However, when it decided to become a lobbying powerhouse in the 1970s, it focused on focusing its news on small businesses, which served to disguise an aggressive pro-corporate agenda. As historian Benjamin Waterhouse explains, “By defining small business interests in terms of deregulation, regulatory reform and lower taxes, these political entrepreneurs can [including the Chamber and right-wing ideological groups like the National Federation of Independent Business] successfully blurring the distinction between large and small businesses. “
One reason the Chamber has been so effective in convincing Americans to view small businesses as a conservative faction allied with big corporations in search of an elite agenda is that small businesses have never been well organized. Now and in the past, they were part of a scatter-shot collection of small organizations. Meanwhile the chamber counts only a tiny fraction of American small businesses as membersand it sources much of its massive budget and board of directors from large corporations.
Significantly, the success of the Chamber’s political agenda and the triumph of neoliberalism in general have devastated the ranks of small businesses. Between 1982 and 2017, the proportion of US companies in companies with fewer than 100 employees fell from 40 to 23 percent, according to the Census Bureau. And the trend is accelerating. In the past decade alone, the number of small independent retailers has fallen by nearly 65,000 – about a sixth. Existing small businesses don’t just fail. the number of companies created each year has shrunk by almost two thirds since 1983.
Our economic development is thus the result of a two-pronged attack on workers and small businesses. Today there are signs that some Democrats are making that connection. Senator Elizabeth Warren launched her presidential campaign by stating that it was time to “put more economic power in the hands of the American people – workers and small businesses.” In 2016, she gave a speech that resulted in the return of an antimonopoly plank on the party’s platform 24 years after Clinton put it down. Representative Pramila Jayapal has also taken on the matter and this year fought for long-term federal support for small businesses affected by the pandemic. (Your invoice has been blocked by House Speaker Nancy Pelosi.) Rohit Chopra, a minority Democrat on the Federal Trade Commission, has issued a number of landmark dissidents calling on the agency to do so Take an aggressive stance on corporate misconduct so that “independent company [can] Chart their own fate and contribution[e] to their communities. “
In late July, Americans got a glimpse of what it might be like for the Democratic Party to flex its muscles on behalf of independent corporations. At a hearing of the House of Representatives Antitrust Subcommittee, led by Democratic legislature after Democratic lawmaker after David Cicilline, Amazon CEO Jeff Bezos was asked about his empire’s predatory tactics against small businesses. The committee even played an audio recording of the immigrant owner’s one School book company that described how their family’s livelihoods were wiped out after Amazon, which also sells textbooks, suddenly removed their product lists with no explanation. When a small business owner watched the hearing, “brought tears to my eyes,” he emailed one of us that evening. “It was waited so long before you had the feeling that the pitch was leveling.”
If the Democrats started fighting for small businesses – if they worked to free Tyson Foods from chicken farms, break up and regulate the tech giants, and channel capital into black-owned companies – they could reconfigure the political map and become more competitive in rural areas and core cities by defining a policy that brings people together to develop a vision of freedom from corporate domination.
The stakes are significant. If small businesses continue to disappear from the landscape, it will lead to more extreme inequalities and further cement the corporate giants that rule our lives and threaten our democracy. To turn the tide, the left must first challenge deep-seated misconceptions about small businesses and provide a clear account of what is driving their decline. And Democrats must deliver by focusing on focused corporate power.
ONEMericans are so ingrained in the ideology of greatness – the idea that large corporations are inherently more efficient and effective – that they are often unable to see beyond their prejudices. They tend to interpret another small company’s formwork as further confirmation that small businesses can’t and can’t keep up. When an independent business disappears, or a local funeral home becomes part of a conglomerate, or a dairy farm goes bankrupt, there is a resigned feeling that this is the pain of progress and is therefore inevitable. To combat the decline of these companies, one has to engage in sentimental protectionism and preserve something strange instead of something valuable and productive.
However, a closer look often reveals a different story. Take the case of independent pharmacies that are noisy Consumer reports and offer others significantly lower drug pricesMake fewer mistakes and get better health care than chains like Walgreens and Walmart. However, the number of local pharmacies is decreasing and their market share has dropped to around 18 percent. How can it be that they are both superior and losing ground? The answer has to do with a handful of obscure companies known as Pharmacy Benefit Managers that reimburse pharmacies on behalf of insurers. The largest of these is CVS Health. CVS has lowered reimbursement rates for independent pharmacies and its contracts with Insurers to direct patients to their own drug stores. They “really squeeze us,” said Ben Okafor, who opened a pharmacy six years ago in a poor, underserved corner of Maine. The two agencies charged with monitoring monopoly behavior, the Federal Trade Commission and the Justice Department, have largely been inactive. In 2018, they gave CVS permission to expand their realm through the acquisition of Aetna, a major health insurer.
In our research, We discovered a similar dynamic in a wide variety of industries. Small banks outperform large banks in several important ways: they offer lower fees, have better interest rates, and use more capital on productive, community-based loans. Still, a third of local banks have disappeared in the past decade. Ranchers like slaughterhouse workers are being pressured by the four companies that dominate beef processing. Even sectors that appear like business success stories are often characterized by abuse of market power. Craft brewers have revolutionized beer drinking, Still, they were banned from the supermarket shelves in states where their huge rivals Anheuser-Busch InBev and Molson Coors control the wholesale trade and have chosen to store stores with their own “craft” beers.
Independent companies also have to submit to a multitude of digital gatekeepers, which are collecting increasingly higher tolls. App developers give a significant part of their revenue to Apple. Amazon is reducing retail sales on its website by 30 percent. from 19 percent five years ago. Visa and Mastercard charge small merchants with credit card swipe fees six times higher here than in Europe where they are regulated.
Policy makers have not only failed to stop such abuse. They have also left small businesses with tax and regulatory disadvantages. For example, Amazon has paid virtually no income tax under federal tax regulations in recent years. The average effective tax rate paid by competing local companies is around 20 percent. These differences are not simply a result of Republican politics. States and cities, including many run by democratic officials, are spread out upwards Economic development subsidies of $ 90 billion per year. Almost all of it goes to large corporations.
IIt is difficult to overestimate the broader consequences of this policy. For one thing, they exacerbate racial injustice: Black and Latin American communities are more likely to get by without essential services like pharmacies and grocery stores and are overrun by dollar chains, payday lenders, and other businesses that are gaining wealth rather than building it. These policies have also concentrated economic activity and prosperity in some metropolitan areas, while many other cities and towns collapse when local businesses disappear. And they hinder exactly what market economies are good at – innovation. Sectors populated by small companies generate new ideas faster than those that consist of only a few large companies.
The lack of political leaders proclaiming monopoly power and struggling to contain it has made it easier for the law to identify measures like the minimum wage and worker protection as causes of the plight of small businesses. These can of course be legitimate points of tension. For local retailers affected by rapidly rising rents, high credit card fees, and the like, large wage increases can be out of reach and feel like another way that policy makers don’t understand their challenges. Even so, independent entrepreneurs are far more in tune with workers than the law would lead us to believe. A majority of small business owners advocate an increase in the minimum wage, according to Public Policy Polling and others. Indeed, even though the Democratic Party marginalized them, 29 percent of small business owners identify as DemocratsThis is a percentage that is only slightly below the 33 percent of voters who do so overall. (The electorate is roughly divided into thirds if “independent” is one of the options.) If the party started advocating for them, that number would certainly increase.
Still, the persistent belief remains on the left that small businesses are incompatible with a pro-worker agenda. One reason people often quote is that big companies pay higher wages. This is true, but it is an argument that on closer inspection dissolves. One fold is that this is only the case when wages are averaged across entire companies. If you only look at the lower half of wage earners, They do about the same with small firms as they do with large ones. In other words, the median income of large companies is higher simply because of the inflated income of those in the upper echelons. Another wrinkle is that this gap has narrowed and in some sectors has disappeared or even reversed. This is the case in retail, where the average income of small retailers (fewer than 100 workers) is 27 percent higher than that of large chain workers (10,000 or more).
More importantly, this argument overlooks the central role that small businesses play in local labor markets. Small businesses act as a kind of driving force: as they form and grow, they expand employment opportunities and competition for labor, thereby increasing overall wages. In other words, a strong small business sector gives workers leverage: they can work for someone else, or maybe even start their own business. Indeed, recent economic research suggests that consolidation is a major contributing factor to declining wealth among working Americans. A 2018 Harvard Law Review Paper put today’s median annual wage at $ 30,500 would be about a third higheror $ 41,000 if it isn’t about over concentration.
IIndependent companies have never been more politically oriented than they are now. Your fate depends on it. Without pandemic relief efforts, many will face bankruptcy in the months ahead Death of unprecedented proportions. At the same time, the growing antimonopoly movement and the work of the Cicilline subcommittee have enabled small business owners to envision a viable future and to re-examine the role of government in structuring the economy.
That makes this a crucial moment for the left. By advocating for small business, the Democrats would encourage a dormant constituency that seeks to save the economy and government from corporate tyranny. This is important in order to secure the left’s vision of widespread prosperity and thriving democracy.
It’s good policy too, especially given President-elect Biden’s razor-thin profit margin. The struggle for farmers and small businesses would help the Democrats develop a coalition that can tilt the balance firmly to the left in Congress and the White House. Doing so would help overcome geographic and cultural rifts and undermine the ability of the law to fuel racism and anti-immigrant sentiment in order to evade accountability to corporate power. The antimonopoly policy has a strong pull in rural and red America. When Chopra gave a speech to the FTC in August about agricultural monopolies, for example a rancher from Kansas proclaimed on Twitter, “I have a new hero @chopraftc. Ranchers, we finally found a champion! “
To return to the small business party, the left must do four things. First, a political agenda needs to be developed that addresses the major issues that hold it back. In the short term, this means pushing for pandemic relief, including direct financial support and measures to protect businesses from digital gatekeepers.
In the long term, the small business platform of the left should emphasize the elimination of monopoly power by revitalizing antitrust laws and taking measures to break up dominant companies, limit their size and forbid coercive contracts. It should also advocate measures to make the corporate tax system fair. Expanding access to capital by strengthening community banks and establishing public banks; Build a strong social safety net so aspiring entrepreneurs can take risks; Creating a built environment for small businesses, including affordable commercial space; invest in critical infrastructures such as public broadband and a publicly controlled payment system; and provide targeted support to enable minority, low-income and rural entrepreneurs to start and grow businesses.
Second, the left needs to invest in a deep strategic small business organization. This differs from the short-term tactical mobilization that the left has occasionally used to generate support for small businesses for measures such as paid sick leave. Stattdessen ist ein langfristiger Aufbau der Basis und die Entwicklung von Führungskräften erforderlich, die von den Problemen bestimmt werden, die lokale Geschäftsinhaber als die größten Bedrohungen für ihr Überleben ansehen.
Drittens muss die Linke Kampagnen entwickeln, die kleine Unternehmen mit Organisationen der Arbeiter- und Rassenjustiz vereinen. Ein vielversprechendes Modell ist Athena, eine Koalition, die die übergroße wirtschaftliche und politische Macht von Amazon herausfordert. (Unsere Organisation, das Institut für lokale Eigenständigkeit, ist Gründungsmitglied.) In den Wochen vor dem Big Tech Anhörung im HausAthena organisierte eine Pressekonferenz mit Kleinunternehmern, hielt ein Briefing für Gesetzgeber über die Schnittstelle von Rassismus und Monopol ab und engagierte Millionen von Menschen in sozialen Medien, als die Anhörung ausgestrahlt wurde.
Die wachsende Antimonopolbewegung bietet einen fruchtbaren Boden für die Wiederherstellung eines Bündnisses von Arbeit und Kleinunternehmen. Im Februar Change to Win und eine Gruppe von Gewerkschaften, darunter die Teamsters und die SEIU, reichte eine Petition bei der FTC ein fordern eine Untersuchung von Amazon. In einer Sprache, die an Walter Reuthers Ansprache zum Labor Day erinnerte, sie drängten die Agentur, um „Arbeitnehmer vor… ungezügelter Marktmacht zu schützen“ und „gleiche Wettbewerbsbedingungen für… kleine und mittlere Unternehmen zu schaffen“.
Schließlich muss die Linke politische Führer kultivieren, die dieser neuen Politik eine Stimme geben. Hier geht es um mehr als nur um die Ansprache eines Wahlkreises, dem eine echte politische Heimat fehlt. Kleinunternehmen haben im amerikanischen Diskurs ein besonderes Gewicht, weil es etwas hervorruft, das wir uns sehr wünschen: die Freiheit, unser eigenes Schicksal zu regieren, vorbehaltlich keinem Meister. Die heutigen Demokraten haben die Möglichkeit, sich daran zu erinnern, was ihre New-Deal-Vorgänger immer wussten. Der Kampf für kleine Unternehmen signalisiert, dass sie für den tief verwurzelten Wunsch der Amerikaner kämpfen, uns selbst zu regieren.