American admiration for small business is rooted in anachronistic ideals passed down from the nation’s preindustrial founding. But the diagnosis is wrong-and the prescription is malpractice. Many of the evils identified by these reformers are real and must be addressed.
Channeling antique figures such as Louis Brandeis and William Jennings Bryan, this school claims that “monopoly” and “concentration” are rampant and that aggressive antitrust enforcement is the only cure. Meanwhile, an influential school of scholars and advocates now blames a variety of ills-from stagnant wages and lagging productivity to growing income inequality-on the domination of markets by large firms.
#SMALL BUSINESS VS BIG BUSINESS FREE#
To Republicans, they’re the purest expression of the creative potential of the free market to Democrats, small businesses are a bulwark against the encroachments of greedy, heartless corporations. Small businesses, by contrast, have remained an exemplar of American ingenuity and pluck, the rare hero championed by both sides of the yawning political divide. The globalization of the economy has at the same time turned American corporations into multinational enterprises with interests that do sometimes run counter to those of their home country. Nor has the rise of the shareholder-value movement, which tolerates no mission other than producing profits, preferably in the near term.
#SMALL BUSINESS VS BIG BUSINESS SERIES#
How did large firms go from being a symbol of American strength to being the object of almost universal scorn? A series of high-profile corporate scandals-Enron’s accounting chicanery, Goldman Sachs’s manipulation of derivative markets, among others-certainly hasn’t burnished the image of Big Business. Only 21 percent of respondents to a 2017 Gallup poll said they have a “great deal” or even “quite a lot” of confidence in Big Business. A majority of Americans now view large businesses as self-serving and self-dealing. Today, you need not travel to the lunatic fringes to find suspicion of Big Business. “There is, in fact, no disagreement, except on the lunatic fringes of the Right and on the Left.”Ĭheck out more from this issue and find your next story to read. “We believe today, both inside and outside the business world, that the business enterprise, especially the large business enterprise, exists for the sake of the contribution which it makes to the welfare of society as a whole,” the management scholar Peter Drucker wrote in 1952. One 1950 poll found that 60 percent of Americans had a favorable opinion of large businesses more than 70 percent had a favorable view of GM.
But this sunny view of Big Business was shared by the public. To contemporary ears, this may sound like standard C-suite spin. He added that he could hardly imagine a situation in which the two would be in conflict: “I thought what was good for the country was good for General Motors, and vice versa.” Wilson assured the chamber that he would always put the interests of citizens ahead of those of his company. During his confirmation hearing, Wilson was asked whether, as secretary, he could make a decision adverse to GM’s interests. In 1952, Charles Wilson, then the president of General Motors, was nominated by Dwight Eisenhower to become secretary of defense.
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