Perhaps maybe the face of small business is changing. I'm a small consulting business (me and hubby). But where I live, lots of small retail businesses have had to close because they can't financially compete with large chains. Maybe it's not bad, but it is changing from ownership to worker.
Personally, I'd love to see more Republican support for small businesses.
Well, I think the GOP support for business in general obscures its support for small business, which employs about half of Americans, if I recall. Big business is actually closer to Hobbes' Leviathan, and elicits support from both parties alike as an easy mark to tap for political cash. (Republicans like it because it's business, Democrats like it because it's big and therefore more easily centralized and controlled. But it's mostly about the cash, and its contributions are self-interestedly fair and balanced.)
If I may imprudently help the other side, a Democrat push for "Buy American" (the current [or any] administration could hardly start an ideological trade war with China) would have great resonance in this here USA. Breaking our addiction to cheap but largely crap consumer goods from foreign shores would make economic sense as well as support our fellow Americans of the working class.
Not much downside, except for screwing with Wal-Mart, where America tends to go on Sundays after church, if not instead of...
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Tom, in the mid-90s, when the Republicans were capturing and consolidating the lead in Congress, they used to tout their small-business initiatives heavily. But Connie may have a point that we are hearing less of that lately.
And if I may be permitted a small Spoonerism, more often than not Wal-Mart is a mall wart.
"If I may imprudently help the other side, a Democrat push for "Buy American" (the current [or any] administration could hardly start an ideological trade war with China) would have great resonance in this here USA."
And we'd all nod our heads as we stand in the checkout line at Target instead of Wal-Mart. Whoopee.
"Not much downside, except for screwing with Wal-Mart.."
Unless you're poor and have to pay higher prices for all of your necessities, and travel farther and more often to get them. Of course, at least we'd all feel good knowing that college graduate independent retail store owners have their six-figure incomes protected, and that autoworkers averaging absentee rates around 20% with ridiculous pension schemes are making our products rather than, gulp, one of those foreigners.
Breaking our addiction to cheap but largely crap consumer goods from foreign shores would make economic sense as well as support our fellow Americans of the working class.
Since I know Tom, I'm not going to jump to conclusions about this statement. But I have to say that, had it come from a stranger, I'd be on a tear about snotty West Coast brie eaters and their contempt for the economic realities of low rent life in flyover country. And speaking of "over" -- "Buy American" is a slogan for persuading ordinary people to overpay for goods while overlooking their defects. Ford and GM can bleat Buy American all they want; after the way their shoddy products disintegrated before my very eyes the only American car I'd buy is Jeep, and it's really German now anyway.
Here is more on the experience of one sad lady in search of a cheap plastic bucket in the land of Big Box Hatred.
Hehe, Kathy. I do not doubt that you can't buy a bucket in Virginia. Most of ours here in California are snuck in illegally across the border and sold at freeway exits along with flowers, oranges, and peanuts.
I was thinking more of all those dozens of broken Chinese toys in your kids' room, not our marginally useful union-built US automobiles. Surely we can make crap toys too.
Nor did I think the Democrats would actually say "Buy American" and actually mean it. It just seems like some good political coin. American brie? Hah!
Love,
Tom
Proud Double-Honda Owner
Since 1991
"I also have to admit that I don't understand matt huisman's point."
All I'm saying is that 'Buy American' is usually code for 'Give me more money, even though I don't deserve it.' And not only that, but the notion that we all should 'Buy American' disproportionately affects the poor. If you're poor, shopping at Wal-Mart allows you to buy a lot more stuff than you would be able to at mom-and-pop shops. Your life, materially speaking, is significantly better because of the Wal-Mart-ization of America.
First of all, the 'smaller more accountable local employers' line is a bit of a myth. The local butcher or clothing store is not paying anyone exorbitant sums of money.
Second, Wal-Mart's success is largely due to their abilities in purchasing and logistics, not lower labor rates. Should we outlaw all mass produced goods because they cheat by using superior systems and processes? How do you differentiate between what they do and say McDonald's or IKEA?
As to whether or not Wal-Mart siphons off funds from local economies, isn't that a normal part of trade? Presumably each micro-economy has the ability (and should actively seek) to sell it's wares outside its borders.
Is there something specific to Wal-Mart that you don't like or is it capitalism in general?
"Perhaps but that doesn't change the fact that their compensation is kept awfully low."
Their managerial jobs pay reasonably well, but they don't pay a premium for low-skill labor. Should they?
Many small store-fronts pay more for their staff because they ask them to double as managers when they're not around. Or looking at it another way, they pay managers to sweep the floor because they're unable to figure out how to staff their operation appropriately. Wal-Mart has figured out how to divide the labor, and pay accordingly.
"Walmart doesn't manufacture anything, they are a sales outlet. You can sell the exact same good through a local outlet, and it's healthier for the local economy."
Not exactly. The local outlet can't get their hands on as much as Wal-Mart, and will certainly pay more for it.
"...locally produced goods are often a better purchase precisely because they don't divert local funds to distant manufacturers."
But what is the definition of locally produced, and who gets to decide? We both know that adherence to this logic will lead to fewer choices of lower quality for more money.
And what if the locals just aren't very good at making widgets? Say I live in Indiana, and I'm looking for a bottle of wine...do I really have to buy the stuff from my local Indiana wine grower?
"At the same time they offer little to nothing back to the communities they feed off of. Not coincidentally this is the same thing I don't like about companies like Microsoft and Starbucks."
How does Starbucks use its size to destroy local business? They've helped raise prices. And Microsoft enables businesses around the world to do incredible things that they otherwise couldn't without them. Their products are what they give back to the communities they enter.
"Capitalism has a place in society, I believe, and that place is the production and sale of luxury items. In any other area it is an incompetent and irresponsible way to run things."
I'll bet you that I could walk through your home/office right now and make the case that about 95% of what you have is a luxury item...so I guess I'll agree.
Certainly capitalism has its flaws, but so far, it is the least worst system I've seen.
Tlaloc...you are basically saying that buying locally (and paying more) will lead to a stronger local economy.
I've heard this rhetoric hundreds of times, but never seen a valid explanation.
Exactly how does having less disposable income help the local economy?
In fact, if I can save 10-20% at WalMart (and my wife certainly does when she shops there) I can spend that saved money on, say, dinner at a local restaurant, tickets to the local theater, etc...
"In adition to low wages they also provide lousy benefits. There's absolutely no reason for them to given walmart's obscene profit of about a billion dollars per month."
Well, not quite. I'm sure it's not a good enough reason for you, but their shareholders are hoping that the company continues to grow. In order to do that they need to reinvest in the business. Wal-Mart's net cash flow last year was less than $300k. Looks like their employees will still be forced(?) to work for (gasp) market-based salaries.
"Possibly, but it'll also lead to a stronger local economy and hence be better for everyone in the local community. The only losers are non-local corporations."
Except for the fact that I now have to drink wine made in Gary, IN...and surf the net on computers manufactured in Merrillville, IN...and maybe I should only buy oil pumped within 10 miles...or is it 20...maybe I'll just call you when I'm not sure.
"And more to the point if a large corporation tries to squeeze your local wine producers out while offering only slightly cheaper prices you are best off not patronizing them."
Maybe. But is the reverse true? Should our local producers not sell anything outside of our area? Of course, it's not economical for me to make my widgets unless I build a plant large enough to sell them to nationally...but that's not fair to other would be widget-economies...I guess I just won't make widgets...and of course, I won't need to hire any locals.
You keep viewing your local community as something to be protected. Certainly that is a noble goal, but is it always right? Don't some things occaisionally need to be pruned (or die)? I'm not saying it's always fun or easy, but death is life's change agent...it's necessary. Markets help people make good decisions on where to direct their efforts, and where to cut their losses.
We've existed with greedy corporations for a long time now, and it seems hard to believe that things would be better we had never had them.
Are you kidding? Starbucks is famous for putting stores down right next to locally owned coffee shops. Then purely due to the fact that they are a large company and can absorb a loss much easier they can push their competitor out of business. And it gets worse. Sometimes Starbucks will buy out the leases of successful coffee shops and evict them.
Read up
Macho Taco has been doing the same thing to the best family-run Mexican restaurants in downtown San Jose. Bastards. Bring back The Iguana!
"Matt you aren't paying attention. Wal-mart's employees AREN'T making a market based wage, they are making a substandard wage compared to the market, that's precisely why I say Wal-mart's benefits and pay scale suck"
Hmmm ... according to Tlaloc, Joe Schmo has a choice between working at job A and getting paid X or working at WalMart getting paid Y, where Y < X.
Are you suggesting that if Joe chooses to work at WalMart that he is making the wrong decision?
"Matt you aren't paying attention. Wal-mart's employees AREN'T making a market based wage, they are making a substandard wage compared to the market, that's precisely why I say Wal-mart's benefits and pay scale suck."
Wal-Mart figured out that you don't need to hire full-time college graduates to push boxes, and that there is sufficient part-time labor available to staff their stores. That pushing boxes full-time for a living, just like many jobs before it, has turned out not to be a lucrative career is not Wal-Mart's fault, and it's time for people to set their sights on other things.
And this notion that Wal-Mart somehow magically creates a depressed labor market prior to their arrival doesn't make any sense either. Do some businesses close after Wal-Mart arrives, absolutely. But the good ones adapt and remain successful.
"In other words if Abe's Hardware store goes out of business because it was poorly run or because Stan's hardware market downtown is simply better that's fine. But if it goes out of business because Home Depot puts a mega store across the street, pays their workers a substandard wage, and buys out Abe's lease and evicts him...well I think you'd have to admit that's just a tad bit different."
I'm with you on the lease buy-out (assuming the worst - I don't disagree that there are tactics that should be outlawed), but not on the others. Does Abe's Hardware get squatter's rights and no one is allowed on his turf? If I run an law firm and pay my staff lawyers $100,000/yr and someone else comes along and pays theirs $60,000/yr and uses para-legals and does better legal work, do I get to complain that they're using predatory tactics?
"What I'm arguing is that patronizing predatory foreign businesses will inevitably hurt you by hurting the local economy in which you live."
I understand you're point, and agree that their are risks and consequences in ignoring it. However, I believe history has shown us that competitive pressure does a very good job of encouraging the necessary changes that we all need to make to be able to thrive in this world. I also believe that history has shown that we are up to the challenge, and that the changes we've made have been to our benefit.
"That's just a small list of the things that would have been infinitely better had business never been allowed to run wild."
There's always room for improvement, but I don't see many other utopias out there either.
"Why are you pretending that this is a difficult concept?"
You are saying that Wal-Mart creates an environment where people HAVE to accept lower paying jobs. I'm saying that Wal-Mart has redefined the jobs, and is finding workers willing to accept lower wages than those under the previous paradigm.
In addition, I'm saying that its delusional to believe that 'box pusher' is a lucrative full-time career in retail, and that long-term people are better off accepting that reality and moving on.
I understand your point that this poses a risk to the local community, but I'm optimistic that we'll be able to overcome the short-run changes and be better off long-term. In the end, excessive protectionism only leads to a harder fall once the reality of the situation kicks in.
"For someone who is pro-capitalism you have surprising little faith in markets. Given that Wal-mart pays below market average you are saying that of the thousands of businesses involved in this field only Wal-mart figured out they didn't have to hire college graduates. Sure Matt, sure."
Wal-Mart was among the first to use part-time labor on such a wide scale. Now they are widely copied in the big-box world. When compared to other big-box outlets or other part-time service labor, their pay rates are very similar. If you want to compare them with teamsters or hardware store owners sons or elevator operators or some other category from the past, I'm sure they pay less.
"If the only reason a competitor can afford to compete is because it is a giant company that can afford to take a loss long enough to price war the small guy out of business then that is fundamentally anti-capitalism."
Wal-Mart doesn't need to take losses, their prices are already low enough. Starbucks moves in across the street from you and charges twice as much (let's assume that there is at least one Starbucks that entered a market without a predatory lease scheme).
"On the contrary history definitively shows us that without a lot of regulation and control these supposedly free markets quickly become dominated by monopolistic ventures or price fixing schemes among supposed competitors."
Every system requires a lot of regulation and control...ours provides the most freedom/opportunity. Monopolies are an issue, and I could be convinced that more should be done here, but they are not the inevitable fate of capitalism.
"Certainly but under the rule of business the world is quickly sliding toward a dystopian future. I mean really how much worse a job could any other system do?"
Let's see...we could stand in bread lines all day...or put our name in for the car lottery...or, well, you get the idea.
"Starbucks moves in across the street from you and charges twice as much."
This was in response to your comment regarding predatory pricing techniques. I'm saying that neither company 'outlasts' the competition with prices below what they normally charge. Wal-Mart's prices are not any lower on Day 1 than they are on Day 1,000 (low prices is what they do). Starbucks doesn't even bother to compete on price, so I don't see how they can be cited as a predatory pricer.
"The very fact that Capitalism has to have severe reguklation in order to function at all is an obvious indicator that it's a very poor system."
Don't all economic systems require severe regulation? I may not be looking at this the way you do, but socialism/communism seem like extremely regulated systems.
"Rather than based on negative feedback loops like every stable system it is based on positive feedback loops, and hence immediately runs out of control when left alone."
I guess my answer depends on how much you think our system uses external controls. I could say that we should have expected more frequent and more severe crashes if we operated in a truly positive feedback loop system, but I suppose you would counter that by saying it is heavily controlled.
If we left capitalism alone, you say that we would see monopoly as the end result for all non-luxury items (because the strong get stronger and exploit the weak). I might agree with that, except that my definition of luxury items is probably a LOT broader than yours (for example, In-and-Out Burgers will never be destroyed by McDonalds').
"The Soviet Union wanted to match our disgusting display of conspicuous consumption. And they failed miserably."
Conspicuous consumption of bread? You'd think they'd have been able to get that part right.
"But more important than the failure is the realization that the goal was wrong in the first place."
But this is where your solutions seem to get really tricky. What should the goal be and who should decide?
Maybe I'm not understanding what this place of yours would look like, but my guess is that it would rely on each person to do their share so that we can all prosper. Except that you won't always feel like me and my friends are living up to our end of the bargain. (And how would we determine that anyway?) So what happens then? You either migrate to a form of capitalism (income disparity and all) or one of us learns how to oppress the other.
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