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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Wednesday, November 01, 2006

Levelling the Playing Field for Local Enterprise

Dave Pollard, in "Why Local Sustainable Enterprises Are at a Disadvantage, and What to Do About it," reviews Michael Shuman's The Small-Mart Revolution, a book about "the reasons entrepreneurial businesses face an uneven playing field and an unfair competitive disadvantage versus the multinational corporatist oligopolies (MCOs)."

The first part of the book outlines the 13 market distortions that multinational corporatist oligopolies (MCOs) have been able to create and exploit to enormous advantage, to the great detriment of entrepreneurs who actually add value to the communities in which they operate -- and offer customers much greater value for their dollar:

1. Government Subsidies: More than $300B in corporate subsidies, almost all of which go to MCOs, are paid by North American and European governments each year to protect and incent these rich and powerful corporate goliaths. These subsidies are 'purchased' with MCO campaign donations, junkets and lobbying.

2. Access to Cheap Capital: MCOs can borrow money much cheaper and under much more favourable terms from the big financial corporations than entrepreneurs can. These rates reflect formulaic conventional lending wisdom and not actual risk....

5. Subsidized Transportation and Energy Infrastructure: Because the cost of gasoline is suppressed by political deals with OPEC, and energy and highway projects are heavily subsidized with tax dollars to favour long-distance transportation carriers, the true cost of imports is hugely distorted, to the advantage of MCOs....

10. Naive Local Planners and Zoners: Because they're unaware of the multiplier benefits of LOIS enterprises, local zoners and planners often offer huge incentives to attract MCOs that yield little local return on that investment, and actually destroy local employment and manufacturing.

11. Oligopoly Network Power: MCOs, by striking exclusive deals with other MCOs, cut LOIS enterprises out of the bidding for major supply contracts, effectively starving them out of all distribution channels except local independents'. You won't find small local food vendors' products in large chain grocery stores, for example, because the Big Agribusiness producer oligopolies won't let the chains carry small competitors' products.


Blogger Jeremy said...

Reminds me of James Dill's 1900 book, Corporations and the Public Welfare, where they described small, local entrepeneuers as a problem needing to be extinguished because there was "too much competition". The solution? Suffocating layers of regulation and taxation imposed by a distant, out of reach central government.

November 01, 2006 1:31 PM  
Blogger Dr. Lenny said...

Local enterprise has no funds to support R&D. The time of discovery in the garage or barn has been regulated away - just imagine OSHA paying your barn or tool shed a visit. Thomas Edison never had to provide for the safety nannies when discovering electricity. Many of the regulations serve as a barrier to the marketplace - although true safety should be of concern. But there is no local chemist shop, or apothecary or access to the tools of discovery except through the MCO infrastructure.

November 19, 2006 8:25 AM  

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