Belloc’s Seven “main ways
unrestricted competition destroys the small owner”,
from his Crisis of Civilization
Belloc lists seven tendencies that give the large business advantage over the small in a field of (nearly) unrestricted competition.
1. “Overhead charges” are
proportionally less as capital is concentrated. E.g., “Ten small shops cost
more to run all put together than one large shop ten times the size of each small
unit.” (CC:129). Hence, chain stores,
department stores, large factories are more efficient, making the deck stacked
against the small owner and so, in a field of unrestricted competition, able to
be more often than not outdone, or even destroyed.
2. The large unit gets more
information and more quickly than the small unit, and so, concerning what next
moves to make in a field of unrestricted competition, the large unit has a
tactical advantage over the small.
[Question: how does the internet and the globalization of markets affect
this? I would guess very little, since
being larger typically means having more capital and thus more resources to
collect more, more diverse, and more wide ranging information about proximate
and distal markets.]
3. The large unit gets more publicity, partly,
but not exclusively, through the proportionately better marketing and
advertisements his greater capital gives him access to. [Again, I ask what of
the internet? I reply: it has lessened
but certainly not reversed this tendency, as TV and print sources are still
widely used for publicity.] Furthermore,
the large unit is more indispensible to news agencies, giving, beyond the
publicity of advertisements, more press and exposure. Hence, in a field of unrestricted competition,
the smaller unit never has home-field advantage.
4. The larger unit can, sometimes
disreputably or nefariously, use secrecy, e.g., large animal agriculture and
its collusion with environmentalist groups, or, again, the collusion of large
food industry giants with the FDA, while at the same time can protect itself by
pretentious cases of plausible deniability, through its ability to absorb huge
legal costs. Or, again, a single large
unit can fund lobby groups to pressure Uncle Sam to make regulations that
appear to restrict his business, and under the false front of a political
competitor, e.g., the case reported by Tim Carney of the automakers who lobbied
against using aluminum (I believe it was that metal) here so as to exploit
overseas markets and eat up competitors. Hence, in a field of unrestricted
comptetition, the small man cannot afford to dodge transparency, nor, when
accused, extricate himself by expensive legal shenanigans.
5. The growth of capital is easier for a large
unit than a small. Large can accumulate
capital without any need to curb luxury, and indeed, must prevent swelling,
whereas the small must sacrifice and vigilantly remain abstemious. “…the first
steps in the accumulation of capital are immeasurably harder than the next, and
the last steps . . . come, as it were, automatically.” (CC:132)
6. Large has easier access to credit, and on
comparatively easier terms, than the small unit. “It is perhaps on this line of
easier credit that large capital today does most harm to small capital, drives
it out and ruins it.” (CC: 132)
7. The large can undersell the small. “It is a
grossly immoral act and one which in all sane societies has been severely
punished – but in the competitive society of today it is taken for granted. The small man cannot stand the loss to which
the large man challenges him during the struggle between them; he is ruined
where his rival survives.” (CC: 132)
“In general, under
competition unchecked by cooperative rules and the spirit of the guild or by
usage having the force of law and restraining the eating up of the small by the
great, that murderous process takes place inevitably, and, as it were, automatically. Now the man who was once a small owner and is
now dispossessed, becomes proletarian.” (CC: 132)
