This article first appeared in the St. Louis Beacon, Aug. 9, 2010 - To succeed, small businesses need fertile ground in which to grow as well as protection against predators and unfair competition. Whether we like it or not, government plays the role of "traffic cop" in our economy; ensuring for everyone, including small businesses, that we are headed in the right direction and avoiding calamitous outcomes.
It is fashionable to say that the biggest problem that small businesses face is government interference. But what is one person's interference is another person's protection. An analogy would be the back judge in a football game who with a simple handkerchief protects the wide receiver from undue interference by the defensive back. Without referees, we would have mayhem; without the government, capitalism would be Darwinian and there would be only a few strong survivors. The interests of the small entrepreneur and the consumer would be left unprotected.
Small businesses must be viewed as part of the fabric of our entire economy. To provide jobs, they should be viewed in relation to Franklin Roosevelt's 1944 Second (or Economic) Bill of Rights which include:
- The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
- The right to earn enough to provide adequate food and clothing and recreation;
- The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
- The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
- The right of every family to a decent home;
- The right to adequate medical care and the opportunity to achieve and enjoy good health;
- The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
- The right to a good education.
In today's world, government can help small businesses create jobs by removing burdens unrelated to the conduct of their business. Companies spend an inordinate amount of money, time and aggravation administering benefits such as health insurance and pensions. In many other industrialized countries these services are provided by the government. If we had a Medicare-for-all health care program, our employees would be better served and businesses would be free of the hassle of ambiguous fine print. Pensions are another burden on small businesses; they are inherently insecure and unfair; we need instead to expand Social Security. Relieved of these burdens, business costs would go down and products would be more competitive overseas.
Consider America's business sector to be like a healthy forest. A forest with only tall aged trees runs the risk of atrophy and collapsing. The forest needs a combination of saplings, trees in their prime and mature ones. Our country needs a similar blend of businesses ranging from the very young to the well-established.
The most significant way in which the government can encourage small businesses to hire more people is to put small businesses on the vanguard of providing job opportunities for the 9.5 percent of our population out of work. Thirty years ago Alvin Toffler wrote of the advent of the "Third Wave" or the "Information Age." The "Second Wave" consisted of manufacturing, a sector of our domestic economy that has markedly shrunk in recent years.
However, "Second Wave" industries may be key components to regenerating our economy. Imagine if incentives were given to entrepreneurs in Missouri to renew an industry that previously was key to our state: manufacturing shoes. These new companies would provide jobs, ones that are conveniently commensurate with the skill levels of many workers. These companies would also re-establish the proper balance between the manufacturing and service sectors of our economy. It is true that stimulating manufacturing in our country will mean higher prices, but given a choice between a full-employment economy or Wal-Mart prices for everyone, I suggest that we put people to work. Not only will they have income; they will have dignity and self-respect; two important intangibles that no one gains from shopping at a discount store.
Ultimately the government will have to be the "employer of last resort" in finding jobs for the 14.5 million Americans out of work. However, whenever possible, we should allocate new job opportunities to start-up businesses. Government contracts are key to helping small businesses create jobs.
The conservative mantra that government is the problem does not tell us what to do when the private sector is incapable of hiring everyone who wants and needs a job. If we see government as a solution and the one sector of our society that has a commitment to the well-being of all citizens, it can play a vital; in fact the central, role in ensuring that jobs are created, in small and large businesses alike.
Editor's Note: Arthur Lieber has been a donor to the Beacon.
Arthur Lieber, a Democrat, is running for the 2nd district congressional race.