Why “Small Business Saturday” is Anti-Small Business

There have been many attempts to compare Occupy Wall Street to the Tea Party. Until recently, the better view seemed to be that both movements recognize that there is something terribly wrong with the world today, but that each has different policy prescriptions for improving the situation. But then last week something changed. Both movements — Occupy as part of “Occupy Black Friday,” and a prominent Tea Party group, Grassfire Nation, as part of an attempt to cash in on “Small Business Saturday” — urged their followers to do the same thing: to shun the “Big Box” stores in favor of small businesses. Of course Grassfire Nation’s call to action came with neither the anti-business window-dressing, nor the calls to “occupy or boycott” successful retail outlets, that Occupy was urging. Nonetheless, I was surprised to see a Tea Party group buy into the “Small Business Saturday” idea because it is both anti-small business and anti-American.

How could “Small Business Saturday” be anti-small business? Well, consider what is actually in the interest of small business — or any business. For a business to be successful, it needs to be able to plan long-range. It needs to be able to anticipate demand and allocate its resources accordingly. If a business is being patronized sporadically by people who are buying from them out of guilt, altruism, or misplaced patriotic feeling, rather than rational self-interest, then the business cannot determine the true demand for its product or service, the demand that will remain when the feeling-based fad-of-the-moment passes.

Moreover, any rational business owner has as his goal the providing of value to his customers. He needs to be confident that he is actually earning the money his customers spend on his products or services — that they would not prefer to be spending their money elsewhere. Otherwise, how can he feel the confidence in himself, his company, and his product, that is necessary for him to keep his business operating, developing and growing?

It is true that small business today is akin to an endangered species, and that we are in danger of losing the values that only it can offer — including, in many cases, specialized knowledge and personalized service. But the answer is not to ask people to, e.g., spend more money on a product than they would have otherwise, simply because they were told they had a duty to patronize a small business. Such a policy is antithetical to the idea of human beings born with an inalienable right to pursue their own happiness — the uniquely American ideal. This is particularly true today when, thanks to our government moving further and further away from that ideal, it may be that the only big businesses can earn enough profit to hire new workers or reinvest. Only big businesses enjoy the economies of scale often necessary to thrive in spite of the huge regulatory and tax burdens they are forced to bear.

If you really want to help small business, buy exactly what you want or need, where you want to and can best afford to buy it. And then spend the rest of your money donating to those organizations or candidates who are most likely to help lift our government’s huge regulatory and tax burden — from all businesses. Only when our economy recovers can there exist a substantial, stable customer base that can afford, based on their tastes and preferences, regularly to patronize both small and big businesses. And abolishing as much of the tax and regulatory burden as possible, as soon as possible, is essential to the process of recovery.

(For more, see “‘Buy American’ is Un-American,” by Dr. Harry Binswanger of ARI.)