The occasional, often ill-considered thoughts of a Roman Catholic permanent deacon who is ever grateful to God for his existence. Despite the strangeness we encounter in this life, all the suffering we witness and endure, being is good, so good I am sometimes unable to contain my joy. Deo gratias!

Sunday, June 21, 2009

Big Business, Small Business, Big Government

Just a few thoughts that crawled (all my thoughts crawl these days) through my mind this afternoon as I listened to some auto company executive drone on about how helpful the federal government has been...

Based on my own experience working for both small and large companies, as well as my many years consulting for dozens of companies of every size, I will risk making some gross generalizations.

  • Small companies are growth companies...not all of them, but enough that they are the primary engines of economic growth in the country.
  • Large companies expand more through acquisition than from internal growth. By doing so they remove growth companies from the economy.
  • When large companies acquire small, growth companies, the businesses they acquire become less efficient and less profitable than they were prior to the acquisition.
  • Small companies hire new employees as they grow; large companies grow by acquiring small companies and then lay off those employees whom they believe to be redundant. And so when a large company acquires a small company there is usually a net loss of employment. And because they often don't fully understand the technology they have acquired, more often than not the future development of that technology stagnates.
  • Small companies love competition because it is the primary catalyst for innovation and growth. It drives them to realize greater efficiencies in all aspects of their business.
  • Large companies hate competition for the same reasons small companies love it. Strong competition forces them to try to function at levels of efficiency and innovation that are usually well beyond their capabilities. Large companies prefer monopolistic or well-regulated "competitive" environments.
  • When it comes to their true business needs, small companies are smart and big companies are dumb. Indeed, business smarts tend to be inversely proportional to business size.
  • Government, particularly big government, loves big business because big business willingly uses its money to fill the campaign coffers of politicians. And big business loves big government because politicians happily repay campaign contributions with legislation that favors big business.
  • Big government doesn't understand the competitive marketplace because it functions in a monopolistic market of its own making. It is, therefore, more sympathetic to the needs of big business, which it understands, than to the needs of small business which it neither understands nor trusts.
And so this is why I believe that auto executive was so happy to take all that taxpayer money from the federal government; and why the federal government was so happy to provide it. This is just a natural result of the relationship that has developed over the years between big stupid companies and big stupid government.

A smart government would look for ways to encourage the development of small, innovative growth companies and order their policies accordingly. Governments will do some of this as window dressing designed to provide legislators with photo ops and campaign talking points, but it's always in a relatively small way compared to the mammoth assistance provided to big business.

Now, somewhere in here there are moral issues that should probably be addressed. But I am not enough of a moral theologian to take on this task, at least without giving it more thought than I gave the above.

I shouldn't watch TV news. It leads to too many of these "crawling" thoughts.

God's peace...

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