On July 10, 2012, John H. Bunzel writes an editorial in the Los Angeles Times stating that it is big business, not small business, that drives economic growth.
In an American Express ad promoting Small Business Saturday, a man in a cowboy hat declares: “Small businesses are the lifeblood of our community.” A woman sitting in a clothing store declares such enterprises “absolutely crucial, vital.” Over a montage of shops, a young woman explains how local shops “make you happy to live where you live.”
But is small business really the solution to the nation’s economic woes? Probably not. In a recent Harris Poll of more than 1,400 small businesses, two-thirds said they would not increase hiring this year. And even when small businesses hire, they tend to hire small numbers of people.
Moreover, there are some things small businesses just can’t do. You may favor the homemade pastries at the bakery down the street, but it’s unlikely you’ll ever buy a car made by your local machinist, and if you could, the cost would be astronomical. Some things just require economies of scale. People also are more likely to buy their televisions from the nearest big-box merchant than from an independent store. Why? The cost. Large sellers can negotiate more competitive prices, and they can make up for smaller profit margins through greater volume.
http://www.latimes.com/news/opinion/commentary/la-oe-bunzel-small-business-20120710,0,4401305.story
