In defense of ‘marginal’ microbusinesses

Posted on | November 12, 2008 |

Given the details of this ongoing debate, I’m glad I posted what I did yesterday.

So, here we go again.

I’m not going to bother restating the arguments put forward by either Professor Shane or Dr. Cornwall, but I would like to point out once again that there seem to be any number of economists who have an imperfect idea of the contributions to the overall economy made by small businesses, microbusinesses and (undoubtedly the most poorly understood of the bunch) nonemployer businesses.

So, let’s flesh out those “marginal businesses,” as Prof. Shane calls them. They

1. create most of the jobs that ever get created in the economy, particularly if you include self-created jobs in the form of nonemployer businesses (which are currently not counted in job creation numbers by the BLS);

2. continue to create jobs during economic downturns, when larger companies are shedding them, which can cushion the shock of a recession for the labor market;

3. earn extra money for the working poor, which can keep them from seeking public assistance (thus saving taxpayer money);

4. provide a workforce, at much less expense and much greater efficiency, for businesses of all sizes;

5. provide a much less expensive basis for local and regional economic development, at a far greater ROI for those local and regional governments;

6. provide a much needed stable of support and local leadership in their communities.

And that’s just the stuff I can think of off the top of my head.

But there’s something else about Professor Shane’s position that bothers me — something I’ve said before in this blog.

It may be true that policy makers seek to create jobs and promote growth but it’s worth considering why policy makers do that. Isn’t the point of jobs and growth supposed to be their ability to allow people to achieve financially sustainable and comfortable lives so that they can live happily?

Is making people happy something to be sneered at?

If the purpose of an economy is supposed to be “meeting the material needs of humans” and if, in spite of strong overall economic growth, humans are not comfortable or healthy or housed or nourished or clothed (or any of the other things that fall under the category of ‘happy’ beyond ’surviving’), then what is the point?

I have no patience with economists who write and talk as if an economy — any economy — is a sacrosanct work of art, a thing of beauty in its own right, such that it should have value that is superior to that placed on the “mere” happiness of humans.

Speaking personally, I don’t vote for politicians because I think they want to grow the economy. I don’t believe it is any politician’s job to be, first and foremost, a steward of said economy — and especially not at my expense.

I vote for politicians whose policy proposals, I believe, will make my life better.

All of my life, not just the part that is impacted by the GDP.


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Dawn Rivers Baker, microbusiness journalistDawn Rivers Baker, aka The Journal Blogger, is the editor and publisher of The MicroEnterprise Journal, and the self-proclaimed Socrates of the small business blogosphere. See her official bio to learn more.


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