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Is Small Business A Threat To The Status Quo?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
Truth is the first victim of the Company Store's dominance.
My view of the Status Quo as a neocolonial, neofeudal arrangement is succinctly captured by correspondent D.C.'s description of state-corporate capitalism: the Company Store. In the plantation model (i.e. any economic setting dominated by a primary corporate employer and/or the state), almost everyone works for the company, and is beholden to the company for their livelihood and security.
In exchange for this neofeudal (often described as paternal) security, employees must shop at the company store, which maintains a near-monopoly (i.e. competition is limited because the company owns the land and/or colludes with local government) as a means of extracting monopoly prices.
The company store extends credit to employees (in the modern version, student loans take the place of employee credit), and since prices are kept artificially high and wages are kept stagnant, the employees never manage to pay off their debts at the company store.
This describes the core dynamic in our state-corporate system. The state-corporate Status Quo suppresses competition (few other stores are allowed in town), usually by indirect means: high land leases, high fees for doing business in town, mountains of absurd regulations no small businesses can afford to meet, etc.
In state-corporate capitalism, small business thus poses a threat to the monopolistic partnership of the government and dominant corporations. Small businesses that try to meet all the regulations and pay all the fees and taxes are either marginalized or driven out of business by the high overhead.
But those that live in the nooks and crannies between the major players pose a threat to the guaranteed profits of the state-corporate Status Quo. As a result, despite the propaganda about how the state supports small business, the real agenda is to marginalize small business in every way possible so the small-business sector can never gain enough political weight to challenge the corporate interests and their partners, the state fiefdoms.
Here is D.C.'s gloves-off, truth-to-power commentary:
The decline of small businesses serves the same purpose as continuous, compound monetary inflation: Both keep everyone on "company property" buying at the "company store."
Inflation means that people can't save in a medium that is not ready-to-be-seized (by the IRS, any Federal court, any creditor like a hospital, i.e. by any minion of the central state Corporation). If people could save honest money "under the mattress" without continuous erosion, then some of their wealth might remain fully private.
We can't have fully private wealth. The Company must always be able to take what the Company deems its fair share, or take whatever payments the Company Store levies (since people are largely compelled to purchase their medical services, for instance, from the CS and prices are not marked on the shelf...only assessed in arrears).
The same is true of employment. If people are able to earn a living apart from the Company, they become less subject to the Company's innumerable rules (including, especially, the requirement to buy everything at...you guessed it...the Company Store).
Small businesses are messy little vermin much more difficult to regulate (and corral, and milk) than what otherwise amount to subsidiaries of the Company Store. All significant corporations in the USA today are clearly such subsidiaries. What else do their legal departments do but finagle "deals" and navigate "hyper-compliance" with the larger Company? The corporations for which I have worked behave like subordinates in a branch of the military: "Sir, YES Sir!" A larger phylum of invertebrates will never be discovered.
Small businessmen, however, comply only under overt duress and are apt to seek end-arounds at every opportunity due to self-interest and lack of bureaucratic organizational incentives. Seeking alternate paths to exercise greater liberty and keep a larger share of their product puts them on the side of nascent informal networks to which you refer.
Your conception of private or informal networks side-stepping the Company is both (in my opinion) the future and an existential adversary of the central state Corporation. This means to me that we will see an increasingly hot war emerge as the early adopters pursue their fledgling networks while the minions of the Corporate State ever-more-openly chase and harass them.
My belief is that people only abandon a failing paradigm when the cost of duplicating the "service" privately is lower than the combined cost of the old paradigm plus the cost of its failures. For example, people will abandon the tax-paid, centrally-planned education paradigm only as they perceive the cost of duplicating it privately (home schooling, unschooling, foregone income, etc.) is lower than the "cost" of uneducated, mis-educated, unsafe kids.
Early adopters must be willing to pay twice (private duplication plus tax extortion) so their formula for the decision is Private+Tax < tax-produced output.
(By the way, I consider current "private" schools to largely be the same as tax-paid. Until a market fully emerges, finding a true alternative to the tax-paid model is challenging.)
This means that early adopters of non-Corporate State paradigms must evaluate the "costs" of the old paradigm higher than their neighbors. The lingering consent of the neighbors to the old paradigm will place heavy burdens on the early adopters of new paradigms.
A significant problem with forging new paradigms is that the earliest of adopters are overt criminal organizations. Non-criminals will intentionally be conflated with criminal networks as the Corporate State's minions war on alternatives that threaten its parasitic and dysfunctional monopoly.
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Welcome to Company Planet.
Yup, small business is THE enemy... to dominator thugs.
Just our high-function monkeyness at work. Mankind formalized the "threat hierarchy" of the macaques into a chain of command control hierarchy and those small businesses tend to be outside its control. Hence, small businesses are inimical to the elite's 'nature' given right to control everything.
Humans and monkeys share Machiavellian intelligence
"Alpha males, who rule the 50 or so macaques in the troop, use threats and violence to hold on to the safest sleeping places, the best food, and access to the females in the group with whom they want to have sex. Like human dictators intent on holding power, dominant monkeys use frequent and unpredictable aggression as an effective form of intimidation."
"Male macaques form alliances with more powerful individuals, and take part in scapegoating on the lower end of the hierarchy, a Machiavellian strategy that a mid-ranking monkey can use when under attack from a higher-ranking one"
http://www.eurekalert.org/pub_releases/2007-10/uoc-ham102407.php
Only so long as the "company's money" is excepted...
Hedge accordingly.
Welcome to Wal-Mart .....and black markets.
And second hand stores.
Given the employment rates in the US, I'd say the government's war on small business is going well.
Government can say that they are putting in all these tough measures regulating business. What they really do is cut a deal with big business to create the type of regulation that puts small business at a disadvantage. So big business gets bigger and small business disappears (the intended result). In reverse, they can get businesses to complain about regulations as door opener for removing regulations big business don't like, such as costly environmental changes. For big business, having someone tell them they have to eat into their profits in order to stop polluting the environment is just plain crazy. It isn't the environment they worry about, its money right now (so they can live large right now. Tomorrow, they're gone so who cares).
I used to work at jobs. During Clinton's first term, I realized that we were reinstating feudalism, with corporate interests taking the place of both Church and State, and executives as the new Aristocracy. From that point on, I started focusing not on the jobs I held, but on the skills I had and how they contributed to my employers' ability to make money. Eventually I realized that they were selling my labor at 4x what they were paying me, and after they paid themselves, there was no money left over to pay me more. I couldn't possibly support my own family at a level commensurate to my market value, after supporting the expensive tastes of my bosses' families.
So I quit. I formed a single-member LLC and did the exact same work for the exact same people. Except I charged my market price, not the pittance that was left over after the aristocrats took their share. I work about half as much as I did then, meaning I doubled my income almost immediately. Paying the other half of my payroll tax, and all of my health insurance, takes a bite, but the universe of deductions available as soon as one has Schedule C income (from self-employment) means I pay a lower percentage of my income now than I did when I was making half as much.
That's a frightening step for a lot of people, because to do it, you have to think of yourself as being autonomous and responsible for your own success and failure. You have to accurately assess your own skills and shortcomings, and you have to think of work as not a place you spend half your waking life going to, coming from and being at, but as a set of things you do to support yourself and your family. It's enormously rewarding on every level, but one loses the comforts of the illusion of being taken care of.
Our feudal employment system is infantilizing. It turns employees into babies, and employers into pseudo-parents. It's a bad deal for everyone, but worse for the employee. I couldn't ever do it again. I often talk to people who are unhappy in their jobs and suggest ways they can take back their autonomy, but they refuse. They worry constantly that they're about to be "downsized" or "outsourced," or lose benefits, but they say they can't quit because they "need the security." Some security. They could outsource themselves, increase their pay, have multiple sources of income rather than just one, and deal with their clients as equals rather than as serfs, but they find the Great Chain Of Being somehow comforting. I guess they like being exploited.
Same here. I did the sums on my old job, saw how expensive bosses are and decided I couldn't afford one anymore. At first I thought I could do half the work for the same money, or, the same work for twice the money. After a while I found that the true figure was closer to your 4x multiple.
Absolutely, 100% correct. I've been telling people since 1978 that they at least need to set up a small home-based business, even if they constantly lose money on paper (the best condition - no SS taxes) just to take advantage of the deductions.
I've personally paid ZERO federal or state income taxes since 1999, and the same for SS. I became semi-retired at age 45 while my friends and former colleagues are still humping for their bosses and the government. Now that I'm 60 and see that my SS benefits will be negligible. I've thought that maybe I've made a mistake, until I look at my bounteous garden, hordes of silver, F&C home (NY property taxes will assure that I need to take in a renter or two or three or move), my good health and lack of stress from not having to turn the hamster wheel for the status quo and all of the other benefits of living somewhat outside the system, I think I have made the right choice.
A case in point between the statists and true believers: Spent last weekend taking care of two dogs at a friend's country home, for which I was paid $100, plus all I could eat and drink. Had a great weekend, did some extra chores and enjoyed the simple elegance of a 2 acre country estate. It was a mini-vacation I told my friend when she returned on Sunday. She even gave me some extra $$, as she was happy to see her beloved pets so well-cared-for and in high spirits.
Some of my friends have been taking trips to Europe, spending whatever they spend and telling me I "must" go for "the experience." Now, I'm a little jealous, maybe, or I was, until this weekend, because when it comes to "experience" my pleasure enjoying nature and animals would be at least on a par with hassling with the TSA, flying for 12 hours each way, doing all the tourist-y things one does in Europe, is on a par with theirs. It's a matter of taste and/or style.
And to note, when my friend returned home (from NYC) she said she was so happy to be home and away from the hustle and bustle of NY, which, she said, she could only stand for a few days. I am assured of more weekends like the last and even found a cheap piece of property in the vicinity I could call my own (looking into buying my acre of happiness and escape from the FSA - I'm currently a suburbanite, but it's becoming a hassle).
Life is what you make of it, and if you believe working 45 years of the best years of your life to enjoy 10 or 20 as you're getting on in years is a good trade-off, by all means, keep slaving away and saving what you can, hoping that SS and your 401k can provide in your "retirement." Me, I gave up on the system 15 years ago and I'm not looking back.
I beleive a solution to many of the USAs problems is that everyone should be their own LLC and there will be no employees. only contracters. Nobody get's EE sponsored benefits, everyone pays their own taxes out of pocket. Everyone becomes responsible for themselves and thus invested in the system that is fucking them.
"By the time I pay everything, I might as well be working for the government!"
Yes, yes that's what they want.
Few people realise that SMEs are a PITA to big corporate government. It's much better for govt to consolidate the private sector into large power-blocs which can be more easily managed, controlled, provide revolving doors, campaign donations and other things.
Big unions and multi-national corporations have their government connections and these arrangements help crush the small businessman in the most unfair playing field in America’s history. The big operators, because of their connections, now are effectively part of the public sector.
It has become a rigged and deadly game, the public sector vs. the private sector.
What Are the Fastest-Growing Classes of Millionaires in America?
by Robert Wenzel, Economic Policy Journal, (May 19,2014)
This should not come as a surprise for a country that continues to experience an expanding government role in the daily lives of its citizens. According to Forbes columnist Rich Karlgaard the answer to the question above is: Police officers, firefighters, teachers and federal bureaucrats. Here’s why:
It’s said that government workers now make, on average, 30% more than private-sector workers. Put that fantasy aside. It far underestimates the real figures. By my calculations government workers make more than twice as much. They are America’s fastest-growing group of millionaires.
Doubt it? Then ask yourself: What is the net present value of an $80,000 annual pension payout with additional full health benefits? Working backward the total NPV would depend on expected returns of a basket of safe investments–blue-chip stocks, dividends and U.S. Treasury bonds. Investment pros such as my friend Barry Glassman say 4% is a good, safe return today.
Based on this small but unfortunately realistic 4% return, an $80,000 annual pension payout implies a rather large pot of money behind it–$2 million, to be precise. That’s a lot.
That $2 million also happens to be the implied booty of your average California policeman who retires at age 55. Typical cities in California have a police officer’s retirement plan that works as follows: 3% at age 50. As the North County Timesof Carlsbad, Calif. explains: “Carlsbad offers its police and firefighters a ’3-percent-at-50? retirement plan, meaning that emergency services workers who retire at age 50 can get 3% of their highest salary times the number of years they have worked for the city. City officials have said that in Carlsbad the average firefighter or police officer typically retires at age 55 and has 28 years of service. Using the 3% salary calculation, that person would receive an annual city pension of $76,440.”
Who are America’s fastest-growing class of millionaires? They are police officers, firefighters, teachers and federal bureaucrats, who, unless things change drastically, will be paid something near their full salaries every year–until death–after retiring in their mid-50s. That is equivalent to a retirement sum worth millions of dollars.
If you further ask how much salary it would take to live, save and build a $2 million stash over a 30-year career, the answer would be somewhere close to $75,000 more than the nominal salary, if you include all the tax bites associated with earning, saving and investing money.
In other words, if a police officer, firefighter, teacher or federal bureaucrat is making $75,000 a year he or she is effectively making twice that amount. Implied in the annual pension payout is that the individual diligently saved half of his annual salary–after taxes–in order to save, invest and build (again, after taxes) the near $2 million pot.
So when you hear that government workers now make, on average, 30% more than private-sector workers, you’re not getting the full story. Government workers, on average, make more than twice as much as private-sector workers when you include the net present value of their pensions. How long can this last?
http://www.lewrockwell.com/2014/05/robert-wenzel/the-fastest-growing-classes-of-millionaires-in-america/
Socialism loves big business and the unions. Socialism can never truly be established while the US has a strong middle class. You've all the other lies from this administration, do you think our President's promise to strengthen the economy and create new jobs is real?
Socialism hates a level playing field of truly laissez faire capitalism.
Thank you, great post. I have been saying this for years. The government employee is making quadruple what they would in the private sector.
Government pension = welfare for the wealthy
JR
It is a rare parasite that concerns itself with the plight of its host.
Brick&Mortar businesses are very difficult, indeed. Online businesses are much better; much less overhead. Friend of mine owns a liquor store and says the overhead is ridiculous.
.
Employees. You're talking about employees.
Yeah, that's a large part of it. Then you have the lease on your location, utilities, licensure, etc.
Still think this thinking is backwards. I don't think it's the government milking the owners of everything. It seems more likely that it's the owners of everything employing their owned and controlled government to milk everyone else.
It isn't one or the other, it's both, otherwise called collusion, controlled at the upper levels in the turnstile agencies. Embrace conspiracy!
It breaks down to Producers and Parasites.
"The Hoeman is the symbol of betrayed humanity, the Toiler ground down through ages of oppression, through ages of social injustice. He is the man pushed away from the land by those who fail to use the land, till at last he has become a serf, with no mind in his muscle and no heart in his handiwork. He is the man pushed back and shrunken up by the special privileges conferred upon the Few.” – thus Edwin Markham himself has explained the theme of his remarkable poem
The Man With the Hoe
By Edward Markham
(This poem, which was written after seeing Millet’s world-famous painting, was published in 1899 by a California school-principal, and made a profound impression. It has been hailed as “the battle-cry of the next thousand years”)
Bowed by the weight of centuries he leans
Upon his hoe and gazes on the ground,
The emptiness of ages in his face,
And on his back, the burden of the world.
Who made him dead to rapture and despair,
A thing that grieves not and that never hopes,
Stolid and stunned, a brother to the ox?
Who loosened and let down this brutal jaw?
Whose was the hand that slanted back this brow?
Whose breath blew out the light within this brain?
Is this the Thing the Lord God made and gave
To have dominion over sea and land;
To trace the stars and search the heavens for power;
To feel the passion of Eternity?
Is this the dream He dreamed who shaped the suns
And marked their ways upon the ancient deep?
Down all the caverns of Hell to their last gulf
There is no shape more terrible than this--
More tongued with cries against the world's blind greed--
More filled with signs and portents for the soul--
More packed with danger to the universe.
What gulfs between him and the seraphim!
Slave of the wheel of labor, what to him
Are Plato and the swing of the Pleiades?
What the long reaches of the peaks of song,
The rift of dawn, the reddening of the rose?
Through this dread shape the suffering ages look;
Time's tragedy is in that aching stoop;
Through this dread shape humanity betrayed,
Plundered, profaned and disinherited,
Cries protest to the Powers that made the world,
A protest that is also prophecy.
O masters, lords and rulers in all lands,
Is this the handiwork you give to God,
This monstrous thing distorted and soul-quenched?
How will you ever straighten up this shape;
Touch it again with immortality;
Give back the upward looking and the light;
Rebuild in it the music and the dream;
Make right the immemorial infamies,
Perfidious wrongs, immedicable woes?
O masters, lords and rulers in all lands,
How will the future reckon with this Man?
How answer his brute question in that hour
When whirlwinds of rebellion shake all shores?
How will it be with kingdoms and with kings--
With those who shaped him to the thing he is--
When this dumb Terror shall rise to judge the world,
After the silence of the centuries?
https://www.ischool.utexas.edu/~wyllys/manwhoe.html
Excellent. This applies to many aspects of life these days, what with the concept of "the disposable male" in a feminized world. That aside, its application to the modern-day debt serf is undeniable. There will come a day when the "dumb terror" will rise and judge those who slighted him, but it will not come soon.
But, in the end, wealth and power will always belong to the 'few' mentioned in the poem. I think J. Paul Getty said it best: "The meek shall inherit the earth, but NOT its mineral rights."
The whole rich versus poor thing is nothing but a gigantic oversimplification, built for soundbite media to attrack eyeballs and politicians to manipulate our dumb asses. An issue like that takes a little more than five minutes to form a coherent understanding of. But it has been such a successful tool for those that use it, they would never want anyone to actually sit down and understand it at the level of reality. Take out all the assumptions and the knee jerks and the politcal talking points versions and you might actually learn something.... something those in power would really not like you to be thinking about. But again, it's too easy for them. We make it way too easy. We are tempting them with our laziness, complacency and inability to dig deep/think for ourselves.
The whole rich versus poor thing is nothing but a gigantic oversimplification, built for soundbite media to attrack eyeballs and politicians to manipulate our dumb asses. An issue like that takes a little more than five minutes to form a coherent understanding of. But it has been such a successful tool for those that use it, they would never want anyone to actually sit down and understand it at the level of reality. Take out all the assumptions and the knee jerks and the politcal talking points versions and you might actually learn something.... something those in power would really not like you to be thinking about. But again, it's too easy for them. We make it way too easy. We are tempting them with our laziness, complacency and inability to dig deep/think for ourselves.
Of course it is.
Small businesses will lead new job growth and that is something the status quo can't stand to see happen.
Here are answers to a few of the “Frequently Asked Questions about Small Business
September 2012” compiled by the SBA’s Office of Advocacy that support your premise.
Small businesses comprise what share of the U.S. economy?
Small businesses make up:
99.7 percent of U.S. employer firms,
64 percent of net new private-sector
jobs,
49.2 percent of private-sector
employment,
42.9 percent of private-sector payroll,
46 percent of private-sector output,
43 percent of high-tech employment,
98 percent of firms exporting goods,
and
33 percent of exporting value.
Source: U.S. Census Bureau, SUSB, CPS; International Trade Administration; Bureau of Labor Statistics, BED; Advocacy-funded research, Small Business GDP: Update 2002-2010, www.sba.gov/advocacy/7540/42371
.
How many small businesses are there?
In 2010 there were 27.9 million small
businesses, and 18,500 firms with 500
employees or more. Over three-quarters
of small businesses were nonemploy
-
ers; this number has trended up over the
past decade, while employers have been
relatively flat (figure 1).
What is small businesses’ share of net
new jobs?
Small firms accounted for 64 percent of
the net new jobs created between 1993
and 2011 (or 11.8 million of the 18.5
million net new jobs). Since the latest
recession, from mid-2009 to 2011, small
firms, led by the larger ones in the cat
-
egory (20-499 employees), accounted for
67 percent of the net new jobs.
Source: Bureau of Labor Statistics, BED.
http://www.sba.gov/sites/default/files/FAQ_Sept_2012.pdf
The choice is whether you want a job (to earn money to pay your bills and taxes and support a corrupt power based government) or freedom.
The choice is simple, but men and women in this day and age are, by and far, simpletons.
Security = Slavery
Individual Responsibility = Freedom
Security = Slavery....until the next dominant male takes over the herd.
Individual Responsibility = Freedom,....or Death per Patrick Henry. "Is life so precious,....."
So true! When will some local government and community of people stand up and say WE WILL TAKE THESE RULES AND SHOVE THEM UP YOUR ASS.
Answer: Look what the media and government did to Cliven Bundy. The media played him like a cat plays with a mouse. Bundy was so ill-prepared for the onslaught and we all just watched the racist lynching.
I entered the life and health insurance industry as a sales agent in 1980.
While focusing on life insurance for most of my early career, I eventually discovered the evils of health insurance.
I had an individual poliocy through Pyramid Life for 15 years.
I was unable to get another policy due to pre-existing conditions.
My premium in year 16 was 40% higher than the Texas Risk pool!
I found out that my block of business had been closed, and now they were operating on the law of small numbers.
Who knows, there may have been ten people left in my group.
Last week, 4 of us sent an applicatiuon to the Texas Departmenet of Insurance to form a health insurer licensed in Texas.
We have spent 3 years, working with Milliman, a well-respected actuarial firm, to craft our product.
We have a unique, patented product that is designed to lower premiums over time, such that, eventually, employers can save up to 80% of their original premiums (even taking into account medical inflation).
Brokers who have self-funded employers of 200 or more employees can contact me at donaldlevit@aol.com
We're going to create positive disruption for the Blues, Aetnas, and United Health Cares.
Don Levit,CLU,ChFC
Principal of National Prosperity Life and Health
Some great comments. Likewise in Australia where small businesses of every ilk and industry are progressively being forced out of existence through extraordinary rises in regulation, tax treatment changes and govt sanctioned monopolistic control.
The shakeout of SMEs that provide real competition and local opportunities to advance, over the last 20 years has been disturbing.
The acceptance (bordering on embracing) of broader society is even more disturbing. No wonder centrally planned economies are the norm, people have lost the ability to recognise that communism and fascism are NOT capitalism.