Tuesday, February 19, 2008

The Ruin of the Small Storekeeper

by Hilaire Belloc

The phrase “small distributor” is a pompous but accurate way of saying “small storekeeper.” He also was an economically free man as was the unencumbered farmer of his own land. The small storekeeper was an independent citizen under no master. He is threatened with disappearance like his brother the small owner: the craftsman, the farmer. He is more menaced than the small owner and is in danger of disappearing altogether sooner even than the small owner will.

There are two sets of causes for his misfortune. A moral set and a material set.

On the moral side, there is the lack of natural excuse for, and natural sympathy with, the small distributor as compared with the small craftsman or farmer. The craftsman or farmer produces directly things which are necessary to our lives: food and clothing and furniture and the rest. When we think of him, we think of work necessary and useful for everybody. But the storekeeper is only a middleman. He passes on what the small owner has made or, nowadays, what the big manufactory has made, to the consumer; and there is no apparent natural argument for this function of “passing the goods” being in the hands of small business more than big business. Indeed, if we could get the necessaries of life direct, without having recourse to middlemen at all, we should think it a good thing.

Then there is the fact that the wage-earners have no special sympathy with the small storekeeper. Some few of them may have the sense to feel rather vaguely that they are all in the same boat together against the big capitalists. But the wage earning masses will buy what they need wherever they can get it cheapest and do not trouble particularly about supporting the small dealer.

As for the wealthier people, they find the small storekeeper inconvenient, compared with the large store. It seems to them squalid, compared with the comfort and luxury to which they are accustomed, and it is necessarily less able to provide at a moment’s notice what they happen to want.

Now this last point: the opinion of the wealthier people is very important, for they have a great deal to do with the making of general opinion.

So much for the moral forces working against small business. The material forces are even stronger. You have among these material forces some that are working against small business for the same reason that they are working against small ownership. Small business has less information than big business. It has less variety or perhaps none, selling only one thing, where the big store sells a number of different things, therefore it cannot make up for loss on one kind of sales by profits on another. It has no “spread over.” Then again, like small ownership, small business has less command of credit than large business. Very often the bank will not listen to it at all and when it does it changes more in proportion for a small loan than it does for a large one.

In all these ways small business is handicapped in its struggle to live, precisely as small ownership is handicapped.

But there are also special enemies to small distributors which attack them as distributors and from which the small owner is free.

Big business has proportionately smaller “overhead” than small business, even the rent it pays is often heavier in proportion to the turn-over than the rent paid by the big stores; while the clerical expenses and pretty well all the running expenses are proportionately heavier.

Then there is the cost of advertisement, which has become so enormously important in modern capitalist distribution. A hundred thousand dollars spent in a given time on large advertisements has far more than a hundred times the effect of a thousand spent on petty advertisement. In practice, small business hardly advertises at all, while big business shouts at us everywhere.

Then there is the giving of contracts. For instance, in the catering trade. A big catering firm will get the order for banquets for the feeding of great numbers of men in institutions, or the armed forces; a small catering firm will not, and a little store can never find anything of the sort coming its way.

Then there is the extra cost of supply; small business has to pay far more in proportion for getting its petty stock delivered to it than has big business.

Meanwhile, every added facility for rapid transport and rapid communication of orders, increases the power of the chain stores. So all along the line. Under free competition small business goes to the wall. The small distributor is sinking fast. The human instinct for independence desperately maintains his hopeless struggle, but hopeless it is as things are, and he is going under.

All the observers in his own line of life, especially the big distributors, see this clearly. It is more instructive to listen to the conversation of big business men on the shortcomings and misfortunes of the old fashioned single storekeeper. The newspaper (with whom the small man cannot advertise) are equally certain of his doom.

Now, as in the case of the small owner, the loss of economic independence means that the man and his family become proletarian.

A friend in the trade assures me that within his own lifetime some forty thousand independent grocers in one European country are now replaced by four thousand salaried managers living on a wage, the servants of one big company and at its mercy. This flood of proletarianism grows and grows, and with it there comes to clog the whole community what may be called, “the proletarian mind.” This proletarian mind is, as I have said, the real danger of our time. Capitalism is but a product thereof.

Taken from The Way Out by Hilaire Belloc
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