CONFLICT OF INTEREST BETWEEN SMALL BUSINESS AND THE CORPORATE COMMUNITY

Domhoff has a problem with the domination of small-business associations by what are really very large corporations. Why does he think this is a problem? Don’t both large and small enterprises want to make profits, keep labor relatively inexpensive, and reduce government regulation?

Domhoff’s argument, which he doesn’t make in Chapter 2, is that there is a significantly different set of interests between the corporate community and the small business “community.” The different interests center around three profound differences between the giants and the Lilliputians. For one thing, the giants have no commitment to any location, whereas small businesses are generally run by people who are also “local citizens.” All businesses want to make a profit, but just how severely they want to exploit labor to do so differs according to whether the “capitalist” lives in the community from which the exploited labor is drawn.* Second, the giants are much more concerned with global trade than small businesses are. Consequently, the fact that the giants dominate the policy-formation mechanisms and lobbying efforts of small-business associations means that protectionist tariffs and quotas that would help small businesses are neglected. Third, small businesses, as Domhoff points out, are usually completely dependent on the giants as suppliers, buyers, or franchise operators. Having their small business associations dominated by major corporations means that they can’t use even their own associations to defend themselves.

There is, in short, a genuine conflict of interest between “small” and “giant” capitalists. “Small capitalists” (the petit bourgeoisie in what is now arcane language) are harmed by free trade agreements, the absence of a national health insurance plan, etc. Many “small businessmen” have adopted conservative ideology quite contrary to their real interests, partly because of the influence of giant corporations in small-business associations. Small businesses are not protected by corporations. They are in competition with them or dependent upon them. In either case, small businesses are not well represented in the halls of power by the corporations that dominate small-business associations.

*Yes, I know that it is small business that usually opposes minimum-wage laws and mandated benefits. But those are not the only measures of exploitation. Small businesses usually stay put and are reluctant to lay off workers in hard times, in sharp contrast to mega-corporations. The issue is not whether small businesses have interests in common with workers, but that there are conflicting interests between small businesses and large ones. Major corporations can easily afford minimum wages and mandated benefits. Small companies can’t. If the U.S. had a basic safety net—meaningful unemployment benefits, a national health insurance plan (so that small businesses wouldn’t be required to provide medical benefits), realistic subsidies for low-wage workers, regulations concerning the movement of factories, etc.—small businesses would have a much better chance of staying in business. These reforms are not enacted because major corporations don’t want most of them. The fact that most petit bourgeois don’t want them either is simply a matter of ideology overruling common sense and one’s own real self-interest.