Everyone Loves Small Businessmen!

“No Local – Why Small Scale Alternatives Won’t Change the World,” by Greg Sharzer, 2012

As our seasons of faux-politics troop by year after year, a real counter-trend has emerged on a somewhat ‘grassroots’ level.  It is the buy local/small co-op/business approach to creating an alternative culture, ostensibly to replace the corporate model.  Richard Wolff, a Marxist professor of economics at Amherst, endorsed the anti-capitalist part of this approach as a key way of ‘democratizing the workplace’ in his book, “Occupy the Economy.” (Reviewed below.)  Various localvore chefs like Alice Waters, the Italian Carlos Petrini of the ‘slow food’ movement, progressive writers like Barbara Kingsolver (Her book “The Lacuna” is reviewed below), advocates of Community Supported Agriculture (CSA) and urban gardening, both left and right anarchists, prominent environmentalists like Bill McKibben, and E.F. Schumaker in his seminal 1973 book, “Small is Beautiful,” all tout local, small-scale efforts as the key way to change the economy, protect health and protect the environment.  These efforts don’t necessarily need to be non-capitalist, of course – in reality, the two trends are combined in most people’s heads.

Here in Minneapolis, like many other cities, we can see the material results of this movement.  Neighborhood micro-brewers, bicycle co-ops, the continuing existence of the 60s-based organic food co-ops in the metro area headed by the Wedge, the blossoming of urban gardens led by the grand-daddy of them all - Dowling, numerous CSA’s providing food to metro residents, many local restaurants serving local/organic produce, farmers’ markets – even May Day Books itself – form a web of local institutions that seemingly provide a popular- based alternative to the Target/WalMart economy.  However, no actual worker-controlled businesses exist in the Twin Cities except some small co-ops – a point Wolff would be at pains to make.

On a parallel course, Republicans, followed by Democrats, have for years claimed that local small businesses provide the most jobs in the U.S., and thus money should be funneled to small businesses to lower unemployment.  They are the ‘job creators.’ Since both parties are not parties controlled by small businessman, these apparently populist claims are mostly useful in gaining votes.  Even the local Green Party, dominated by progressive small business owners, was indirectly involved in a mayoral campaign led by Pappa John Kolstad that mainly focused on the plight of small business. (see commentary, “Meltdown of the Minnesota Green Party?“ below.) 

It seems, everyone loves small, local businessmen.

Greg Sharzer is a British Marxist, and decided to take a look at this movement.  This timely book puts the local movement under the lens, and reveals why it is lacking as a way to actually protect the environment or change the economy.   He does not completely dismiss it either, for obvious reasons.  Localism is an indicator that the corporate approach is not working, and has arisen as an alternative to monopoly capitalism.  I have noticed that the people most interested in recycling, growing their own food, buying locally, changing their diet, reducing energy use, bicycling, etc. – and are actually willing to DO these things in their personal lives -  are many times the same people who want an anti-capitalist alternative. After all, if individuals and families can all do this, why can’t businesses and government?  I myself compost, recycle to one bag of garbage per month, grow some vegetables, bicycle to work, mow my lawn with a push-mower, eat vegetarian and a bit of fish, belong to a CSA, repair items, try to buy used, and purchase items locally, or ‘fair trade’ items, if possible, even if they cost more.  Yet none of this is going to change capitalism ultimately.  It is a sandbox.

The apparently populist claim that small businesses ‘create’ the most jobs has been debunked recently by Jared Bernstein in his blog, “On the Economy.”  In a massive study on small-business job production by the Bureau of Labor Statistics, it reveals that, like the deceptive unemployment, GDP, poverty and inflation numbers issued by the government, the ‘job creation’ numbers have also been massaged.  (And they used to bitch about the USSR issuing fake statistics!) The numbers which show small businesses generating the most jobs are based on ‘establishment size.”  And ‘establishment’ is based on a specific geographic site. In effect, if you have a business that employs less than 50 people on a geographic site, that qualifies as a ‘small business.’  Even if it is a McDonald’s restaurant, a GAP store or a MAC cosmetics store.  And now you see the falsity of these numbers.  When you take an ‘entity’ point of view, large corporations are the chief hirers of labor in the U.S., not small businesses. And on an international scale? No contest.  Nor does it show how many small businesses are nothing but feeders for large corporate enterprises.

Small business has also recently taken another adjustment in the statistics field.  George Zornick of the Nation recently posted statistics that show that 66% of low wage workers work for large corporations, not small business, so that raising the minimum wage is really something corporate America does not want, not ‘small business’ America. 

In Sharzer’s reasonable polemic, of which I can only sketch an outline, he takes on many claims of the localist movement.  Probably the most solid claim by the localist movement is that money spent in a local business stays in the community.  On the face of this, it seems quite logical and bullet-proof.  'Civic Economics' is an organization charged with investigating this issue in Andersonville, a Swedish ethnic business neighborhood in Chicago.  They found chain stores retained $43 in the local economy, while local stores retained $68.  However, hidden in this statistic is how much of the product being ‘locally’ sold is also produced locally.  I.E. an Andersonville gift store selling handicrafts or food from Sweden is exporting part of that $68 back to Sweden.  It is also possible that that gift store is owned by someone living on the tony ‘Gold Coast” of Chicago – and again, more of the $68 starts migrating away from Andersonville into a wealthy ‘local’ enclave of the same city.  An expensive and unhealthy ‘mom & pop’ grocery store in Andersonville may suck more money out of the local population than a Wal-Mart, thus leaving less for other local vendors.  Nor might all local stores pay more than chains.  In addition, not all local products are as carbon-friendly as products shipped from other countries, due to the low carbon output of rail and ship.  Sharzer maintains that the apparent economic / environmental benefit of consumption based on local firms is not as clear as stated.  

Sharzer analyzes the role that consumers can have in changing capitalism, both factually and theoretically. At present, in the UK, only 1% of all purchases are ‘ethical’ purchases – not enough to sway anyone yet.  Even if this percentage crept up to 5 or 10%, it would not dominate the economy.  One of the present losing tactics of the labor movement, as Joe Burns pointed out in “Reviving the Strike,” (reviewed below) is the consumer boycott (aka “Corporate Campaign”) which replaced effective strike action in many strikes in the recent past.  Burns concluded consumer boycotts are only subsidiary tactics that can accompany a real strike, not the main tactic itself.   

Theoretically, neo-liberals maintain that consumers are at the heart of capitalism and labor is peripheral – or invisible.  If they are right, then the localist movement is also right.  If they are wrong, then the localist movement’s ideology is just a bit of populist neo-liberalism, this time benefiting small business.  Anarchists like Proudhon believed capital was not the enemy, just the way the market was run.  Marx believed the market was a product of the social relations of production – ownership by the capitalists of most land, means of production and most property.  Changing the ‘market’ could not change the ownership of society, because the owners of society controlled the market.  Sharzer points out that even present ‘fair-trade’ items do not eliminate exploitation.  Sharzer hinges his argument on “SNALT” – socially necessary abstract labor time, a Marxist concept – in essence, labor power.  Humans create value, not machines or techniques.  The market does not exchange concrete use values; only exchange values.  As a result, no worker will be compensated adequately and no product will be sold for its real price.

Schumaker himself opposed Marx’s ‘labor theory of value’ because it was ‘human-centric.’ Marx’s theory actually showed that capital was anti-human because it only valued products – and in the derivative, the consumers who buy those products.  In addition, Marx implicitly costed natural inputs to production.  It was a Soviet Marxist who actually formalized this – though his economic accounting was not followed by the Soviet state. Most pro-capitalist localists idealize the market – and that is why they can never  undermine a market economy, nor can they free labor as a commodity, nor can they protect the environment, which can also be exploited ‘locally.’  Their real goal is to realize the dominance of small enterprise owners – an impossible goal, of course, in a period of increasing world monopolization.  It is only an argument to create niche markets within the broader confines of the capitalist system.

Sharzer cites authors who contend that the nostalgia for local small business hides their real make-up – in 2010 83% of small businesses in the U.S. were owned by older, white, married men.  No surprise there. 

Sharzer takes on the anti-capitalist version of localism too. He contends it is similar to visions of national autarky, yet on an even more narrow, fragile basis. Long-distance trade has never been absent from almost any economic system, even the former workers’ states.  Hidden behind the bias against the use of efficient large-scale technology is an anti-industrial attitude – essentially substituting subsistence and a microscopic cottage economy.  This paradise was idealized by Marxists like William Morris in his book, “News From Nowhere”, (reviewed below.)  Sharzer, citing Marx, says that anti-capitalist localists cannot overcome the law of value when they try to replace big industry and high-tech with direct, non-capitalist trade. Big capital dominates markets and will always do so until capital is overthrown.

Sharzer goes into an analysis of urban agriculture (“UA”), its dependence on bourgeois land rent and its minor role in national agricultural policy.  He then discusses the lifestyle recommendations similar to those of middle-class socialists in England cited by George Orwell (In “All Art is Propaganda,” reviewed below) -‘hygiene, fruit-juice, birth-control, poetry…”- and their similarity to the life-style recommendations of the present localists – organic food, yoga and craft beer. Ultimately, Sharzer identifies localism as an ideology of the progressive petit-bourgeoisie – which sees the culture war as the true font of politics, not economics, capital and class.  Kingsolver even sees conspicuous consumption in negative Buddhist religious terms – in essence, shopping is now a spiritual issue.  Market choices for upscale hiking boots, vintage furniture, wheat-grass juicers and locavore food identify the true cutting edge of this revolution – in its cultural, consumptive choices.  In essence, this approach disappears the working-class – that grubby majority which this ostensible democracy rests upon.  Everything returns to a modern day ‘Renaissance Festival” of artisanal villages and art fairs for consumptive hobbits. 

Artisanal improvements in certain products can increase quality and health – hand-made soaps, hats, furniture, breads, etc.  They might be made by individual entrepreneurs that live a somewhat precarious existence. Yet this improvement in quality does not change the essence of the commodity as a commodity.  And in both price and payment for labor, artisanal products for the most part cannot compete with large capital. 

Sharzer’s book flows directly into “Rebel Cities” by David Harvey, (reviewed below) which raises the class issues of any locality or ‘community’ that do not disappear once the worker leaves his plant, office, warehouse, hospital, school or retail store and returns home.   Predatory local businessmen are many times a derivative exploiter, seeking their cut of the workers’ wages.  Not to mention the ‘local banks’ that mortgage the houses, apartment buildings and businesses lining the local streets. 

At best, both pro and anti-capitalist localism provides a space for alternative businesses and people to get a breathing space and an organizing center. At best, it provides training for the future task of running the whole of society, not a tiny part of it.  At worst, it provides a substitute, a placebo for true change, and ultimately, is a prop to the petit-bourgeoisie as a class, and no one else. 

P.S. - February 27, 2013 on Bloomberg, a professor at the New School in NYC said the similarity between "Occupy" and the Tea Party was that they both liked small capitalism.  He called the new form of hipster capitalism, "Indie capitalism," citing one of the first organic restaurants, Alice Water's Chez Panisse in Berkley.  'Nuff said.  

And I bought it at May Day Books!

Red Frog, August 1, 2012