Did Reagan kill small business?
- Thread starter green
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Globalization
green
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I got this as a small business owner, who is fighting an uphill battle against corporations who goes into new areas with plans to lose money for the first 3-4 years, with bargain prices with the goal of pushing out their competition.
So, no. I didn't. I got it from the fact that wherever there is a Wal-Mart, small businesses struggle.
Look, I am as red as red gets. BUT, to say that small businesses aren't going away is being silly.
Now, I have no clue as to why this is happening, but I am curious for intelligent responses/guesses.
How many billion dollar a year in revenue companies existed before deregulation? How many now? How many semi-monopolies existed before? Now?
We have a problem with this country, and silly responses are what's killing it.
I'd like to have an intelligent conversation with those who know more than me on this topic and see if there is a solution. Or, are we just doomed to all work for 2-3 corporations that own everything?
p.s. True capitalism leads to monopoly. Once a company gets big enough, the little guy can't compete anymore, so the little guy goes under. You HAVE to have regulations.
green
Well-Known Member
This is what I am wondering. By deregulating, did we encourage consolidation, which reduces competition (or, in my case, allows a bigger competitor to operate at a loss for years knowing that will lead to other businesses going under, reducing competition). Did we effectively kill small business with deregulation?
Or was it dropping the taxes, which made a larger company make more sense and higher profits, whereas before, the taxes were so high, there was never really any reason to consolidate (small businesses were more profitable than large corporations)?
I don't know why it has to be political, which tends to have a way of crowding the facts out.
You're in a mature business and I would expect big business competition to out compete you. It's no different than any other retail -- grocery, hardware, auto parts... they've all been gobbled up after their industries matured.
Craft brewpubs, on the other hand, are on the leading edge of innovation and are growing at an exponential rate. Same goes for tech startups.
If you want to start a farm today you don't grow corn. You open a greenhouse selling organic foods and rarities, start an herbs farm that grows high demand essential oils, raise exotic food animals or breed the smallest dogs you possibly can. You have to go into new markets if you don't want to compete with big business.
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I'll see if I can find the gauge of small business startups. It's been years since I looked at it and forgot what it's called.
The Thriller
Well-Known Member
Ah yes. The 3 evils, globalization, automation, the Internet.
Whenever anyone brings up economic sorrows, these 3 evils show up to bail out conservative (failed) policies.
The problem is... Where's the evidence that globalization, automation, and the Internet are the primary causes?
Last I checked, Canada has access to technology yet their economy is fine. Australia too. Many European nations are fine. Germany? If there's a country that would exploit the 3 evils to cut down on costs and kill small businesses it would be them. Yet... They haven't
The truth is, here in America we have let a few companies become nasty monopolies. Unchecked and unaccountable to anyone. We used to break up the monopolies of the gilded age. Now, we have reverted back to the (failed) conservative policy of monopolies being more efficient and better and all the wealth being concentrated at the top being ordained by god.
Why does walmart thrive? Because of dirty underhanded tactics or because they provide the low cost goods that consumers want and that allow lower income people to enjoy a better quality of life?
What are some of the nasty monopolies? Name them. Describe why they are destructive and not in the best interest of their industry of the consumers they serve.
I'm not saying that I know that no nasty monopolies exist, I just see a lot of people bemoaning large business that succeeds because it's the best at giving the consumers what they want.
green
Well-Known Member
Why don't we stop this then? Again, I'm not very knowledgeable on this subject (or fancy words, ha ha), but why don't we just put a big tax on everything imported, and force companies like Nike and Apple to manufacture their products here? Aren't we one of the top consumers in the world? Why don't we leverage the power we have?
green
Well-Known Member
Here's the thing, they give customers what they want, but at what cost? What happens when all that is left is Walmart? Do you think prices will remain low?
The real question is this: Are we better off now with Walmart, and will this continue in the future as Wal Mart grows?
green
Well-Known Member
I do agree with all of that. BUT, where do all those businesses end up? They end up being bought out.
Now, my real question is this: Has it always been this way? Am I just over-romanticizing the good ol days, or has our economy really changed? Is it start-up, knowing that the end goal is selling to a corp before they put you under or is your only other option joining the corp from the get go? Has it always been this way?
If it has, then this conversation is over. I'm not based in reality. But if it has changed, is it a good change?
BTW, just wondering, have you ever owned a small business?
Here it is: https://www.kauffman.org/multimedia/infographics/2013/kiea-interactive
The rate is entrepreneurs per 100,000, so .30 would be 300 per 100k.
The rate is entrepreneurs per 100,000, so .30 would be 300 per 100k.
If all we're left with is walmart and they raise prices then that opens the door to competition. They only dominate because they offer low prices and large selection at locations that are convenient.
LogGrad98
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This all reminds me of a case presented in one of the Freakonomics books, regarding sweat shops. They posit that the reason sweat shops even exist is because they are better than the alternative, that if there were better places to work with better conditions and higher pay then no on in those countries would work in sweat shops, and that maybe if we push to shut them all down, then we will lower the standard of living in those areas by removing the "best" employment opportunity many people there will ever get.
Over time, as the people who work in those sweat shops gain a little financial stability and acquire things they want, like running water, nutritious food, etc. they will expect more and just as in the developed world wages will rise and conditions for everyone will improve.
This isn't some Utopian vision. It's ugly and dirty and suffering continues throughout. It's just that there isn't a better option that's based anywhere near reality.
green
Well-Known Member
I will be completely honest here. I care as much about their economies as the people in sweat shops care about mine.
I am just trying to figure out if the Wal Marts and tv oligopolies are a good thing.