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Small business, a better option?

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Issue 1724

what do socialists say?

Small business, a better option?

“THE NEED of a constantly expanding market for its products chases the capitalist over the whole surface of the globe. It must nestle everywhere, settle everywhere, establish connections everywhere.”

That description of how business spreads right across the world was written by Karl Marx in the Communist Manifesto over 150 years ago. It is an accurate picture of the world we live in today.

A handful of giant multinational corporations are responsible for the food we eat, the water we drink, how we travel around, and the TV we watch. Many people are furious that the lives, and deaths, of many people are in the hands of so few businesses.

Some of these believe that an alternative to the power of multinationals could be in locally based small businesses. These would be based on rebuilding local economies that could be geared towards the needs of the local community, not the dictates of profit.

One example of this is given by journalist and campaigner George Monbiot. He points out the stranglehold that the big four supermarkets have over farmers. They have driven local specialist shops like butchers and bakers out of business, and they use their monopoly over food distribution to squeeze their farmer suppliers.

Small businesses can provide vital services to local people. Pensioners, single parents and the unemployed often rely on local shops to buy their shopping from or get their benefits.

Many small shop owners are included as part of the community. But small businesses are also forced to compete alongside the big firms in the system we live in.

That means they too have to turn over a profit by selling on their goods at a higher price than it cost them to buy or produce. It means some are driven to compete on the same ruthless level as the big companies.

Gregory Palast, the US investigative journalist, describes this process in a recent article in the Observer about the small US town he lives in.

He says that local people mounted a campaign to stop a McDonald’s restaurant being built in their area. But the small businessmen locally-real estate agents, shopkeepers and farmers-sabotaged the campaign.

This was because they would make a profit from the multinational moving into the area and buying up their premises. The owner of the town’s lumber yard welcomed the McDonald’s opening and the shopping mall that followed in the multinational’s wake.

But the big firms’ dominance of the local economy grew. They began to gobble up the same local businesses that had encouraged them to settle in the town.

So the lumber yard owner was faced with a giant Do-It-Yourself chain taking over a nearby field and driving him out of business. George Bush and Al Gore in the US presidential race tried to shore up their vote by offering tax breaks to help small businesses.

Gore promised to “save family farms and businesses” by slashing inheritance tax on businesses worth up to 1.8 million.

Bush gazumped him by promising his limit would be around 3 million. But both Bush and Gore get the majority of their funding and support from the big multinationals like the oil companies.

In Britain too New Labour praises “entrepreneurs” and has made a series of concessions to small businesses. The government pitched the minimum wage at the pitiful level of 3.70 an hour by claiming it didn’t want small businesses to suffer.

And the government’s trade union rights at work legislation does not apply to companies who employ less than 21 workers. But New Labour saves its biggest handouts for big business.

Small businesses have to operate in the system we live that has the drive for profit at its heart.

Socialists argue for an end to that system, for a revolution to tear down capitalism and put workers in control of society. But that does not mean we would take over every corner shop and force the owners out on to the street.

The multinationals who drive the economy would be taken over. Their corporate power would be dissolved and their assets put to use for need. That would mean production in society could be geared towards the majority in society and not for profit for the rich few.

The transformation would benefit people running the corner shops too as the needs of the majority would be put first.


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