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Big Is Beautiful: Debunking the Myth of Small Business
Why small business is not the basis of American prosperity, not the foundation of American democracy, and not the champion of job creation. In this provocative book, Robert Atkinson and Michael Lind argue that small business is not, as is widely claimed, the basis of American prosperity. Small business is not responsible for most of the country's job creation and innovation. American democracy does not depend on the existence of brave bands of self-employed citizens. Small businesses are not systematically discriminated against by government policy makers. Rather, Atkinson and Lind argue, small businesses are not the font of jobs, because most small businesses fail. The only kind of small firm that contributes to technological innovation is the technological start-up, and its success depends on scaling up. The idea that self-employed citizens are the foundation of democracy is a relic of Jeffersonian dreams of an agrarian society. And governments, motivated by a confused mix of populist and free market ideology, in fact go out of their way to promote small business. Every modern president has sung the praises of small business, and every modern president, according to Atkinson and Lind, has been wrong. Pointing to the advantages of scale for job creation, productivity, innovation, and virtually all other economic benefits, Atkinson and Lind argue for a “size neutral” policy approach both in the United States and around the world that would encourage growth rather than enshrine an anachronism. If we overthrow the “small is beautiful” ideology, we will be able to recognize large firms as the engines of progress and prosperity that they are.
534 pages, Kindle Edition
First published January 1, 2018
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Displaying 1 - 5 of 5 reviews
June 18, 2018
This book is really important and well researched. I agree with about 80% of it--especially when it debunks the myth of small businesses being more egalitarian and better for democracy. My own work has tried to dispel this myth over and over again. I blame Thomas Jefferson.
However, I don't think the authors take seriously enough some of the threat of monopoly and monopsony--namely that once companies get large and dominate a certain industry, they can choose customers and leave out certain people (usually low-income) and regions as well (again, poor ones). Banks especially create inequalities when they do this. I think they have done something very useful here, but I believe there is some critical missing analysis.
However, I don't think the authors take seriously enough some of the threat of monopoly and monopsony--namely that once companies get large and dominate a certain industry, they can choose customers and leave out certain people (usually low-income) and regions as well (again, poor ones). Banks especially create inequalities when they do this. I think they have done something very useful here, but I believe there is some critical missing analysis.
June 12, 2022
Big is Beautiful is a really good book summarizing all the ways that small business has received unfair preferential treatment at the cost of national productivity, global competition, innovation, consumer prices, workplace harrassment, salaries, and more. All arguments are backed up by a large amount of data, and the author propose a national developmentalist agenda to alleviate this: 1) Be neutral to corp. size, 2) improve productivity over short-term gains when doing anti competition regulation, 3) concentration is not necessarily bad, 4) interfirm collaboration is not necessarily bad, 5) merger analysis should not condemn any market power accumulation, and 6) govt. should be humble about ability to predict the future. Part of this project is also to increase min. wage, make it easier to comply to size-neutral regulations, focus on high-growth small business, let corps. tout their benefits, have corps. stay in the country, and more. This enables an even playing field where small business compliance with big business regulation should be there but easier and the benefits of small business is reaped properly.
July 26, 2018
The arrival of Big is Beautiful by Robert Atkinson & Michael Lind should be appreciated by all readers who enjoy thinking beyond old and outdated, yet still popular conventions. This new release from the MIT press serves as a long overdue rejoinder to the misplaced yet ever-present romanticism that in business Small is Beautiful. The obverse implied, that Big is Ugly, has held sway for well over a century and the “Big” desperately have needed their day in court for quite some time, as well as an able defender(or defenders) to make their case adequately before the bench of public opinion. Atkinson and Lind more or less do their clients proud.
This interesting micro aesthetic has attached itself to popular economics through the widely successful book by E.F. Schumacher. Atkinson and Lind take apart the multitudinous assertions that claim small businesses create more jobs than big: they don’t. They assault the notion that small business owners are “the little guy” who frequently live hand to mouth: they aren’t. They demolish the conceit that small business responds better to the local social needs of community: typically they can’t afford to, or just won’t. Big businesses employ more people, pay better wages on the whole, produce more goods of high quality with more efficiency than perhaps even possible in a small business. A tough pill to swallow and clear, this I understand. Part of the popularity of this myth emerges around the ubiquitous dream held by many of finally quitting their “day job” with the corporation to open and own that “small” bookstore, or coffee shop, or hardware store, or whatever. As owner of any of these fine enterprises, and since it’s a dream anyway, you’d undoubtedly take the time to get to know all your customers, treat them fairly and always with equal care, make their customer experience as pleasant and fulfilling as you or they could possibly hope for. You’d be like young Haruki Murakami, though perhaps without the fledgling novel brewing inside you. But then, suddenly, the snake appears in Eden. Barnes & Noble opens up across the street. Or a Starbucks. Or a Home Depot. Flow start to diminish. Your business drops off. Your profits begin to dwindle. You begin to contemplate rather bitterly a new career in real estate selling warehouse structures to Barnes & Noble; or Home Depot. Unfortunately, for those dreamers, businesses of growing scale will almost always sell their products cheaper than smaller businesses; they will also often have more choice and stock. Success spurs growth as a necessity, while stagnation requires subsidies, often both private as well as public, which can encourage further stagnation. Small businesses are frequently a premium boutique business that is kept going at the expense of the community it serves. Hence the number of vintners scattered about the Hamptons.
Atkinson and Lind use the bulk of this book to plead for “size neutrality” in applying government regulations and subsidies. They argue that far from government catering to the Big, its the Small that has continuously siphoned off the lion’s share of taxpayer dollars for years without much to show in return. They argue that government assistance should be predicated upon a business’ potential for growth rather just a promise of staticity. R&D offers promise of future dividends and national enrichment; a pizza shop offers the future its slices. Too often the latter has been categorized as an entrepreneur and unjustly reaped public monies through this confusion of terms. The authors may come off as bordering on the ruthless sometimes. To appeals that neutrality might mean small businesses going under or some employees being let go, their quick response is that displaced workers can find employment with bigger companies that will pay better, provide better benefits, and undoubtedly offer more opportunity for advancement. Neither mom nor pop is likely to step down and turn the reigns of their pizza shop over to you no matter how hard you work.
Yes, this is a work of economic partisanship. This book is also well-researched, splendidly organized, and cogently presented. The authors show numbers and provide links for a reader to explore beyond the covers. This book will also pop many balloons, so many will undoubtedly cry foul before getting to the end. Still, I’m glad this argument for the importance of large businesses in the American economy and throughout its innumerable local communities was finally made. And made so well.
This interesting micro aesthetic has attached itself to popular economics through the widely successful book by E.F. Schumacher. Atkinson and Lind take apart the multitudinous assertions that claim small businesses create more jobs than big: they don’t. They assault the notion that small business owners are “the little guy” who frequently live hand to mouth: they aren’t. They demolish the conceit that small business responds better to the local social needs of community: typically they can’t afford to, or just won’t. Big businesses employ more people, pay better wages on the whole, produce more goods of high quality with more efficiency than perhaps even possible in a small business. A tough pill to swallow and clear, this I understand. Part of the popularity of this myth emerges around the ubiquitous dream held by many of finally quitting their “day job” with the corporation to open and own that “small” bookstore, or coffee shop, or hardware store, or whatever. As owner of any of these fine enterprises, and since it’s a dream anyway, you’d undoubtedly take the time to get to know all your customers, treat them fairly and always with equal care, make their customer experience as pleasant and fulfilling as you or they could possibly hope for. You’d be like young Haruki Murakami, though perhaps without the fledgling novel brewing inside you. But then, suddenly, the snake appears in Eden. Barnes & Noble opens up across the street. Or a Starbucks. Or a Home Depot. Flow start to diminish. Your business drops off. Your profits begin to dwindle. You begin to contemplate rather bitterly a new career in real estate selling warehouse structures to Barnes & Noble; or Home Depot. Unfortunately, for those dreamers, businesses of growing scale will almost always sell their products cheaper than smaller businesses; they will also often have more choice and stock. Success spurs growth as a necessity, while stagnation requires subsidies, often both private as well as public, which can encourage further stagnation. Small businesses are frequently a premium boutique business that is kept going at the expense of the community it serves. Hence the number of vintners scattered about the Hamptons.
Atkinson and Lind use the bulk of this book to plead for “size neutrality” in applying government regulations and subsidies. They argue that far from government catering to the Big, its the Small that has continuously siphoned off the lion’s share of taxpayer dollars for years without much to show in return. They argue that government assistance should be predicated upon a business’ potential for growth rather just a promise of staticity. R&D offers promise of future dividends and national enrichment; a pizza shop offers the future its slices. Too often the latter has been categorized as an entrepreneur and unjustly reaped public monies through this confusion of terms. The authors may come off as bordering on the ruthless sometimes. To appeals that neutrality might mean small businesses going under or some employees being let go, their quick response is that displaced workers can find employment with bigger companies that will pay better, provide better benefits, and undoubtedly offer more opportunity for advancement. Neither mom nor pop is likely to step down and turn the reigns of their pizza shop over to you no matter how hard you work.
Yes, this is a work of economic partisanship. This book is also well-researched, splendidly organized, and cogently presented. The authors show numbers and provide links for a reader to explore beyond the covers. This book will also pop many balloons, so many will undoubtedly cry foul before getting to the end. Still, I’m glad this argument for the importance of large businesses in the American economy and throughout its innumerable local communities was finally made. And made so well.
September 25, 2019
This was thought-provoking. It helped to change my mind and overcome some fears about “big” business. It shared great facts about how larger firms are often add more value to society than small firms. This value includes efficiency, higher wages, innovation, worker safety etc
March 29, 2020
From now on (2020), governments will go along with corporations instead of fighting them. As Britain learned 200 years ago, U.S. (government) has figured that trying to keep corporations home is futile, so government will assist in global expansions of corporations in this globalize game world.
Displaying 1 - 5 of 5 reviews