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There’s a lot of gobsmacked reporting about how West Virginia is leading the nation on vaccination by relying on local pharmacies rather than CVS. Local drugstores! West Virginia! Who can believe it!
It’s a telling example of how steeped we are in the ideology of bigness. 1/
It’s a telling example of how steeped we are in the ideology of bigness. 1/
We’re so certain that big business is superior to small, and that big cities are smarter than rural places. We’re blinded by these ideas. Only the most glaring evidence of the opposite can shake us out of the conviction. 2/
Last year, I watched economists struggle to figure out why so many more PPP loans were made in some places than in others. The answer wasn’t hard to see. It just confounded their assumptions: small banks are better at getting capital to the real economy than big banks are. /3
But if you shed the assumptions and start actually looking, you find that in many industries, small outperforms big, and small businesses often provide distinct market benefits that their large competitors can’t match. I wrote a paper on this 2016. https://ilsr.org/monopoly-power-and-the-decline-of-small-business/ 4/
Similarly, I often find that urban liberals have a hard time believing that many of the best examples of state and local policies that block corporate power come from rural places. No state has thumbed its nose at Wall Street more than North Dakota. 5/ https://ilsr.org/map-shows-how-well-the-bank-of-north-dakota-works/
Or to take a rural state on the other end of the political spectrum, Vermont has largely blocked Walmart and other big-box retailers from dominating its economy. https://ilsr.org/vermont-is-magic-blp-episode-46/
The reason small businesses, small farms, and small banks are disappearing is not because they can’t compete. It’s because this ideology of bigness has led to a host of antitrust, tax, and banking policies that favor big corporations and undermine small ones.
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We often talk about the closure of a small business — a local drugstore, say — as though the stakes are only the nostalgic feeling of these places. But in reality, we’re losing some of the most effective & productive parts of our economy. The costs are so much greater. 8/8
