Small Business as a Check Against Corporate Power

[¿Que?]

I was in a discussion with an objectivist friend, who told me that government regulation was unnecessary in a truly free market. She said that small business would check corporate power in such a scenario. From a radical perspective, this seems to me to be irrelevant, because no matter how favorable conditions get under capitalism, labor will still be exploited and alienated. However, from a reformist perspective, I can see how this position would hold a lot of appeal and I personally consider it very dangerous around liberals. Can someone help me out with this?

[Thirsty Crow]

I was in a discussion with an objectivist friend, who told me that government regulation was unnecessary in a truly free market. She said that small business would check corporate power in such a scenario. From a radical perspective, this seems to me to be irrelevant, because no matter how favorable conditions get under capitalism, labor will still be exploited and alienated. However, from a reformist perspective, this position holds a lot of appeal and I personally consider it very dangerous around liberals. Can someone help me out with this?
How the hell would small businesses check corporate power?
There's nothing to help you with here since the person didn't provide any kind of arguments (or did you leave them out?), let alone evidence. Just a claim.

[jake williams]

The notion that "small businesses" could check "corporate power" is predicated on the notion that small businesses will not be shut out of the whole economy because within some areas of the economy, small businesses are more efficient than large businesses (otherwise "small businesses" don't exist and the whole discussion is moot). That in itself is a debatable proposition. It has some prior plausibility, and we can certainly see sectors where small businesses are more efficient - especially new, rapidly innovative sectors - but even bourgeois economists recognize that this may have more to do with corporate culture than some economic law that fundamentally counteracts the concentration of capital. There's very little reason to believe such a law exists, and we regularly see sectors previously thought to be solely the purview of "small businesses" being out-competed by large businesses and corporations - not just manufacturing or retail, but increasingly even things like legal services.

At any rate, what the concept even means isn't clear. For one thing, the "corporation" is a particular legally-recognized organizational form of a business. HUGE businesses can exist without being corporations - look at Cargill or the Koch brothers. It's not clear what motivation non-corporate big businesses would have to act against corporate big businesses, at least that your friend would be referring to. In general objectivists tend to be centrally concerned with things like rent-seeking and the control of particular businesses over the state. That is, the minimal state should be a neutral arbiter between businesses. There's no special reason to believe that small businesses would or could actually force this to be the case, and really, the fact that individual businesses are acknowledged to be able to control the state, as far as I'm concerned, makes quite clear that capitalism is intrinsically anti-democratic and can't be corrected. You can't deny that a single class wouldn't be able to control the state if you think a few large businesses could.

If what your friend is really saying is that (large) businesses do have an interest in preventing each other from gaining special control of the state, to a degree she's right - that's basically the society we live in, one where individual segments of capital are constantly fighting with each other and mostly maintaining a balance of control. That's a capitalist society.

I'm not really sure what else to say, although I can think of quite a few things. It's unlikely small businesses can even exist in an "unregulated free market", much less force non-state regulation on large businesses. Such an unregulated free market can't exist though, because it's not in the interests of either of the two dominant classes in capitalist society - that representing big business, and that representing workers. Insofar as small businesses agitate against regulation in general (which they do for the same reasons that would prevent them from even trying to check many aspects of "corporate power), they agitate against all potentially dominant forces in capitalist societies - which is why "libertarians" and "objectivists" are shut out of political power, and why they have such a persecution complex.

So the whole notion is idiotic. It couldn't happen, and even if it could happen it wouldn't happen, and even if it did happen it would be shitty, because small business people are mostly reactionary fuckers who have an even more desperate and immediate need to abuse their workers, the environment, criminal law etc. to stay in business in the first place.

[ar734]

Small business (what they used to call the petit bourgeoisie) is constantly in danger of being taken over by the gigantic corporation. In fact, small business cannot compete with the monopoly capitalist. Once a small business gets started it can only survive under today's economic conditions by expanding and becoming a monopoly itself. The best examples are WalMart and Microsoft.

The image of the gutsy, hardworking small business competing to keep WalMart honest is one of the great fictions of the ideology of modern capitalism.

Here is a brief passage from The Communist Manifesto:

"In countries where modern civilisation has become fully developed, a new class of petty bourgeois has been formed, fluctuating between proletariat and bourgeoisie, and ever renewing itself as a supplementary part of bourgeois society. The individual members of this class, however, are being constantly hurled down into the proletariat by the action of competition, and, as modern industry develops, they even see the moment approaching when they will completely disappear as an independent section of modern society, to be replaced in manufactures, agriculture and commerce, by overlookers, bailiffs and shopmen."

[Red Commissar]

The only way to realize that cushy small-business utopia would be government involvement ironically. Business will tend to expand and become larger if the market is available (ie if they manage to compete better than the rest), into the hated "corporations" or "big businesses". It ignores everything we've seen so far.

I don't generally watch South Park but I'm reminded of an episode when the community comes together to fight a Wal-Mart (Wall-Mart) parody. Go to 20:30 in the clip:

http://www.southparkstudios.com/full-episodes/s08e09-something-wall-mart-this-way-comes

[¿Que?]

Thank you guys. I appreciate your responses. :thumbup1:

I think maybe this should have gone in learning as I have little to contribute on this subject, but I think I've been enlightened a great deal with your responses, and I am better prepared for the next time someone comes at me with this argument.

Thanks.