Are more thriving small businesses really better for the country?

[King]

Every campaign season I hear the same stuff about cutting taxes for small businesses and getting small businesses hiring because small business is the heart of our successful capitalist system.

But then I visit small businesses.

You have the mom and pop restaurants.  Food is pretty good, though it can be slightly unhealthier as they don't hire nutritionists like chain restaurants.  They certainly treat their employees better.  These guys are important I spose.

You have lawyers and small medical practices.  Frankly, decent sized law firms and medium sized clinics are far more efficient.  

Car dealers... lol.

And then you have crap.  Maybe I'm forgetting something, but every small business that isn't a restaurant is an overpriced unnecessary specialty shop, a needlessly independent subcontractor for a big business, are run by a con artist, or a combination of the three.  They are also incredible volatile to even the most minor economic swings and tend to over expand in the good times and over correct with the cut backs in the bad times.

As much as the left hates big business and the right hates the government, both are probably the only reason we have anything.  How many things do you own that were acquired from a small business?

[King]

I understand they contribute a lot to the GDP and employee a ton of people but do they really do important tasks on their own?  I'm not sure I can think of a small business that photosynthesizes to our economy.

more thriving small businesses are really better for the country.

While Billy Jo's consignment shop creates a job or two and is great for a community what we really need are some serious heavy industry manufacturing jobs (Bethlehem Steel, etc) to have a serious recovery.

And it's not just the jobs.  We can live without a consignment shop.  It's not an important task.  

(Oh yeah, and what better way to revitalize the steel industry then to can public rail projects? )

[King]

You can't really encourage the creation of big business.

I see venture capitalism as encouraging the formation of big businesses all the time.  There's a lot of good ideas that require too much to start off the small.

Google, mentioned early as a small business that became big, started off with a $100,000 angel investment.  The Home Depot was also mentioned and, while it was planned and started by a small group of entrepreneurs, it was financed largely by an investment bank.

[King]

But venture capital is fairly common when it comes to starting companies in general, no?

My point was rather that whether a company becomes big or not depends mostly on how successful they are, not on government policies.

(Unless you do a China and simply outlaw a bunch of smaller companies)

The government can significantly aide in that success without being totalitarian like China.  South Korean chaebol capitalism (see LG, Hyundai, Samsung) are good example of sparking big business.  The government constantly encourages these companies to expand and it led to amazing economic expansion.  If they ever go through hard times, they get bailed out on the promise that they will continue to expand into other industries to become profitable.

Though, this isn't fail proof either.  Daewoo was barely ever a profitable enterprise yet just kept growing and growing despite it before it was impossible for the Koreans to keep them from going under.

Still, it created a ton more long term employment than a small business centric economy probably would have in Korea. And it didn't really restrict entrepreneurship.  If anything, it allowed for more.  An entrepreneur in South Korea just has to create a product/service and business model that can last for a few years then one day LG will come around looking for something to make a subsidiary out of so they can collect another government bailout, boom he's a millionaire and the chaebol makes his idea part of a worldwide company.