No, Small Isn’t Beautiful

The power of big business needs to be confronted. But the solution to big business isn’t small business — it’s democratic socialism.

(Dan Burton / Unsplash)

Over at Slow Boring, Matt Yglesias has a piece arguing that Amazon is not a monopoly and that a lot of what passes for anti-monopoly discourse is actually anti-bigness discourse. I agree with Yglesias on this point. Not all anti-monopoly advocates are motivated by anti-bigness per se, but many of them are, and this can create some confusion when it comes to understanding what they are trying to achieve.

I’ve been following the intellectual edge of anti-bigness types for many years now — especially Matt Stoller and Barry Lynn, whose books I’ve both read and who I’ve interacted with in other ways over the years — and so I thought it might be useful to explain what their philosophical motivations seem to be.

Anti-bigness types are not anti-capitalists, but their diagnosis of the problem with the current mode of production is quite similar to anti-capitalist diagnoses. Under a conventional capitalist system, a relatively small group of affluent people (the capitalist class) owns and controls the productive apparatus of society, and a much larger group of non-affluent people (the working class) must submit themselves to work for the former group, with the penalty for non-submission being death via starvation. This is an unequal and unfree way to organize a society, full of coercion and ripe with potential and actual abuse.

The socialist solution to this problem is to have the working class collectively take ownership and control of the productive apparatus of society away from the capitalist class. Put differently, socialists want to replace rule by the few (oligarchy) with rule by the many (democracy), not just for the government but also for the economy.

The anti-bigness solution to this problem is to turn both the capitalist class and working class into small individual proprietors. This replaces rule by the few (oligarchy) with rule by none or self-rule or something to that effect.

You can find this basic approach sprinkled throughout economic philosophy over the years.

There is Thomas Jefferson’s conception of the yeoman farmer, which is a landowning, non-slave-owning, mostly subsistence farmer. For a time, Jefferson thought this was the economic ideal. Because the farmer owns their own land, they do not pay rent to an extractive landlord. They are self-employed, and so they are not being coerced by a capitalist employer. And they are largely producing for their own consumption, which insulates them from consumer markets where they might also find themselves jacked around by other people and extracted from via retailing middlemen.

There is Catholic distributism, which similarly focused on the idea of promoting small family farms and then later on small businesses and other similar kinds of economic forms. The idea of distributism is to provide a third way between socialism and capitalism that combines the private property aspect of capitalism with the freedom-from-domination aspect of socialism. This is achieved through smallness: if everyone self-employs through a single-member firm, then nobody is under the yoke of the capitalist. The closer you can get to that, the better, distributists think.

There is also John Rawls. Rawls’s theory of justice is, according to him, compatible with both democratic socialism and “property-owning democracy” but incompatible with welfare-state capitalism. Property-owning democracy refers to a state of affairs in which the means of production are widely dispersed, for instance through an economy organized via small firms. Rawls stands out among the people writing in this area for his ability to see that both anti-bigness capitalism and democratic socialism are at least on paper able to overcome the unequal and unfree nature of conventional capitalism.

Once you understand that this is what motivates a lot of anti-monopoly types (some consciously, others unconsciously), a lot of the tensions and confusions circulating in that world get cleared up. Lynn’s “Open Markets” refers not to competition or tariff policy, but instead to the idea of making sure that the markets are open to small businesses. One of his frequent lines on this is that antitrust law has focused too much on the freedom of the consumer and not enough on the freedom of the producer, by which he means the freedom of small business owners to have and run a business. That freedom is dashed by competition from the big guys as that competition makes many inefficient small businesses non-viable.

I can understand the gut appeal of this perspective. It is the appeal of anarchism in many respects: the equality of socialism without the collectivist governing institutions — whether cooperative board, worker council, or parliament — that, in some minds, are themselves vehicles of unacceptable control and coercion.

But, for me, this gut appeal disappears when you move from abstraction to reality. Jefferson is the last guy whose ideas on this made some sense because Jefferson was talking about a yeoman farming freehold that was entirely or almost entirely insulated from capital markets, labor markets, and consumer markets. A subsistence farmer operating like that really does mostly live on an island not affected by the whims and desires of other economic actors.

But that is the only arrangement that works like that. After industrialization, everyone is producing for others, even self-employed small business owners who have no formal bosses but are ultimately jerked around by their clients and customers.

It is hard to imagine any economic arrangements based on our current level of technology that does not involve the vast majority of people working inside some kind of larger organization rather than being the owner-operator of a single-member firm. Even if anti-bigness advocates were extremely successful to the point where they managed to quadruple the number of firms in the country and spread production out across those firms, the vast majority of working people would be employees not owners.

Anti-bigness advocates sometimes acknowledge this and then try to claim that these workers would nonetheless be benefited by this new world in which they worked for a smaller firm, but this is pretty clearly not true, and also does not address the point that, by their own reasoning, those workers are experiencing unfreedom.

Finally, when you think about the governing mechanics that would be used to achieve anti-bigness, you see that it inevitably relies upon collective democratic institutions — namely, the state — to dig in and basically micromanage the economy in order to make sure everything stays small. The charm of decentralization and rule of none/self-rule is thus an artifice being built on top of an iron-fisted centralized state that must constantly quash things on behalf of the small proprietors.

This is not a problem in and of itself, but at the point at which you are relying upon a democratic central state to impose your system, you are relying upon the very collectivism — namely, the support of the electorate — that anti-bigness is supposed to provide refuge from, relative to socialism.