Village Squire, 1976-02, Page 7Big business, big
labour and big
government are
putting the squeeze
on the little
businessman.
BY JOHN BULLOCH
John F. Bulloch Jr. is president of the
Canadian Federation of Independent Busi-
ness. He has returned recently from Tokyo,
where he participated in the International
Symposium on Small Business.
It is no secret that the Canadian economy is
in trogble. The economic Council of Canada is
pointing to a period of slow growth unless we
are willing to accept massive immigration and
take the necessary tough measures to
improve the nation's productivity.
The Prime Minister is warning Canadians
about the need to change our values, habits
and institutions. In a recent telecast Pierre
Trudeau explained the anti-inflation program
as a massive intervention, made necessary
because of the failure of the free market
system.
No one will argue that the present
economic system is not working; but its
failure is not the failure of the free market but
the failure caused by the intervention of
governments in the marketplace, and the
overpowering pressence of Targe power
groups impervious to market forces. These
power groups themselves are products of the
state.
New insights into this relationship came to
light- in the course of the international
Symposium of Small Business in Tokyo.
Sponsored by the Japanese Government and
the Japanese National Federation of Small
Business Associations, the Symposium was
composed of small business spokesmen,
government otticials and academics from 33
nations and from the United Nations as well.
In a paper presented there, Graham
Bannock, former Research Director of
Britain's Bolton Commission studying small
and medium enterprises showed that
increases in the size of the public sector are
accompanied by decreasing employment and
output among small firms. Corporate
concentration of power stems not from new
technology or economics of plant size, but
from the grouping together of firms under
common worship Concentration of power - at
the expense of smaller firms - is a function of
government spending, tax laws, the capital
markets and marketing practices.
Because of increasing affluence, public
attention is diverted to social issues which
inflate the size, complexity and cost. of
government. The burden bears heaviest on
small firms. Taxes on payroll, on income, on
capital gains, on sales, on succession, by
reducing profitability and the ability to
finance growth, encourage owners to sell out;
and the efforts of larger firms to obtain
special tax advantages merely accelerate the
process.
Capital incentives, the ability to deduct
interest costs of borrowing for acquisitions,
the right to offset the losses of one firm
agains the profits of another - these are only a
few examples of the way the game is rigged in
favor of concentration. Concentration of
corporate power cannot be studied in isolation
from the growth of government. Big labor is
the inevitable result of concentrations in
business and government, with monopoly
power granted by the state.
The terms public sector and private sector
are outdated. Two quite different elements
are at work in the economy.
First there is what may be called the
planning sector, within which are grouped the
major concentrations of power. These are the
ingredients of the corporate state - big
business, big government and big labor —and
their outgrowths are the corresponding
attempts by the state to control them. The
Anti -Inflation Board is only the latest in a
series of measures aimed at correcting abuses
of power.
The other element in the economy is the
market sector characterized for the most
part by the entry and exist of owner -manag-
ers and the checks and balances of the forces
of supply and demand. This sector employs
more than 55 per cent of all working
Canadians.
In Japan, by contrast, the existence of the
two sectors is reflected in economic policies.
Recognizing that a healthy market sector,
because it difuses power, guards against
power's abuse, the Japanese Government
since 1945 has pursued a deliberate policy of
promoting the market sector as the key agent
in democratizing Japanese society.
In Japan over 70 per cent of the work force
is. employed by small and medium
enterprises, and 78 per cent of industrial
workers are employed by small manufactur-
VILLAGE SQUIRE/FEBRUARY 1976, 5