Oh, and relevant to this thread.
Some interesting points about the myth of small business.
http://www.newyorker.com/talk/financial/2011/10/31/111031ta_talk_surowiecki
Very interesting article, especially how small businesses do not seem to contribute much towards nation's long-term growth, an increase in productivity, or more efficienct use of resources.
A commonly heard pro-small business argument is that it keeps the wealth more distributed. I imagine many of these small stores are run by the middle-class, and so if everyone went to Walmart, it would be a blow to the middle class, and more money for investors. This would mean that there is less money circulating throughout the market.
However, I'm not arguing that we need to spend our money at these small stores just for the sake of keeping the wealth well-distributed, especially if these stores provide mediocre services at expensive prices. And to be honest, I never really gave much thought to the idea that small business owners may be just as a slave-driver as a CEO may be.
I guess a better argument for small businesses is that, as another poster has mentioned, it keeps more of the money within the local community. But knowing how dangerous it is to rely on what you "hear from someone", I searched, and found this article.
http://www.time.com/time/business/article/0,8599,1903632,00.html
Some cliffs:
It talks about how "ghost towns" are popping up throughout the country (I think this article is more about Europe), and what are the benefits of supporting local businesses.
1. Twice the money stayed within the community, when produce was bought at a local farmer's market or community supported agricultural program (CSA) rather than at a supermarket. This was in London.
2. "Buy Local" campaigns increases awareness about the local need for a product that can't be bought locally. So an innovative local may start a new business, and add "creative elements" to make the product more appealing to the people in the community.
3. Local businesses may charge more, but this increase in cost is offset by increase in employment, better products (no Chinese-made crap), and other seemingly non-economic factors, such as the bond you form with the people in your community and less damage to the environment.
4. Increase dependence on foreign products means that nations are losing their resilience and flexibility to changing market conditions. This means that we are less able to cope if there ever comes a future where we have to rely more on our manufacturing basis.
5. Buying from local stores increases the speed at which money circulates throughout the market. Since local stores do not make as much profit, and have more input costs, the money they spend on advertising, supplies, and labor costs tend to go back into the community.
6. Plus, it talks about how circulation of money has slowed down with the recent trend of more and more money going into the financial sector. And it talks about how a community in Germany uses a local currency, which is accepted by local businesses, and has the same value as the Euro, while having a much higher circulation rate. One of the reasons being, there seems to be a demurrage fee of 3% if you hold onto the bills for 3 months without spending it.
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