November 24 here in the United States was known as Small Business Saturday and has been for several years now. One of our most important holidays, Thanksgiving, is the fourth Thursday of November. The day after, Friday, is known as Black Friday as this unofficially launches the start of the Christmas shopping season. The Monday after is now known as Cyber Monday as many people go back to work after the four day holiday and shop online for Christmas.
Started in 2010, Small Business Saturday was created (by financial giant American Express) to encourage Americans to shop at traditional brick and mortar stores (as opposed to online shopping) and to at shop local stores as opposed to “big box” stores (think: shopping at Tinex, vs. shopping at Vero). The whole point was to get people to support their local merchants by shopping locally and at small stores.
I’ve always admired small businesses and the men and women who take the risk in creating them and in running them. I’m the first to admit – I am not a businessman and would probably not do well in creating my own business. But I greatly admire and respect those who do.
In the United States, more than three quarters of all businesses have less than five employees. I’m not sure what the statistics are for Macedonia, but I will bet that most businesses are small businesses, defined by number of employees. This does not mean, in any way, that I do not like large businesses. In fact, I celebrate those as well and they are a vital part of any economy. But the vast majority of people employed in any capitalist country are by definition small businesses.
During my many years in Macedonia, I have spent a lot of time with small businesses; some I have patronized, some I have come to know the owners, others I have worked with on projects of one type of another. All of them – all of them – have been very proud of the business they have built and the service or product they provide to the public.
Scottish philosopher Adam Smith, who founded modern economics, wrote two great books on political economy, one being The Wealth of Nations (ironically published in 1776, the same year the United States declared independence). Smith advocated for open and free markets, essentially allowing the market – and the individuals who make up the market – to do what they need to do to create wealth, arguing that the government should, essentially, stay out. Create broad macro-economic conditions which allow businesses to be created and thrive, but other than that, stay out of the way of business.
One of Smith’s most famous quotes centers on the issue of self-interest. He wrote “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” In other words, the businessman (the butcher, the brewer and the baker) is interested in making a living for himself and his family. Therefore, he creates a business – not to benefit you, but to benefit him! Businessmen and women seek to satisfy their own self-interest (economic or otherwise) and we help them fulfill it by purchasing their goods or services.
Granted, there will always be inequalities in a free market economy. That is, unfortunately, the way it works. But British Prime Minister Winston Churchill’s famous quote on that subject pits capitalism with something Macedonians are familiar with: socialism. Churchill wrote: The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of socialism is the equal sharing of miseries.”
In America, today, our friends from the political left are arguing for more government intervention in businesses and more taxes on the wealthy. They argue that the “public interest” is higher than self-interest and that equality should not exist. Many other countries are going through this too. So governments from the left and their supporters work to put more regulations on individuals and business – all in the name of “the public interest,” “equality” and “fair share.” The problems with this type of thinking, however, are many. First, almost always, the “public interest” is really their own interest – their own special interest. “Equality” is just another word for the redistribution of income through higher taxation – taking from the middle class and wealthy and giving to the poor – with a healthy amount of that going to government employees and their special interests. And as for “fair share?” Well, who decides what is “fair?” And who implements it? Well, government of course. Meaning it is not fair.
Inequalities exist in an imperfect world. They always have and always will. The brilliance of the free market economy, best exemplified by small businesses, is that wealth is created and individuals can give to charities, churches, synagogues, and other non-profit organizations whose main goal is to serve those less fortunate.
I wrote at the beginning of this column that I admire and respect small businessman and women (and large businesses too). In fact, I am in awe of them. They employ the rest of us and they give back to their communities. So don’t be jealous of businesses and their owners – celebrate them!