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Comment by core-questions | Hacker News Reader

> There's no benefit to having a small business that provides inferior products or inferior service relative to a large company.

Sure there is - in terms of where the profit goes. The profit in a small business goes to the owner(s), who usually live somewhere in the local community, and in turn that money stays within the community to be spent on other businesses there.

When a Walmart comes along, the profits all move up the chain to a corporation that is nowhere nearby, effectively sucking the wealth out of small towns in exchange for slightly reduced costs thanks to efficient logistics.

The happy medium would be to find a way to have logistics as good as Walmart without having to actually be Walmart.

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By that logic, car dealerships in America are a positive because they keep profits locally. In reality, they just increase prices to consumers and limit competition through lobbying.

The cost advantage from Walmart is not just in logistics, it is specialization of labor, superior negotiating power against suppliers, and diversification of geographic risk. A small business will be less efficient and give up more profits to suppliers.

This is true, but are lower prices for consumers better for everyone in the community than keeping the profits locally? I don't think anyone knows. My guess is it creates different winners and losers.

While this is true, I would be curious of the overall economic impact.

A business owner can have a successful business but they aren't really making tremendous profit, so how much of that money really remains in the local community.

The other aspect is also that real estate taxes need to be increased, which is the best way to ensure that funds inside a community stay there.

This way as more work moves remotely, through real estate taxes the local communities are still able to thrive.

I'm not disagreeing with what you are saying, but it isn't so black and white.

> While this is true, I would be curious of the overall economic impact.

Where have you been for the past decade? The economic impact is increasingly concentrated levels of wealth, where a handful of people are vacuuming up pretty much all of the wealth in America. The middle class (local business owners) is shrinking, the labour/wage worker class is growing, and the ultra-wealthy are getting richer.

> The other aspect is also that real estate taxes need to be increased

No, this also affects local businesses, who do not have the profit margins needed to survive. You need to find a way to limit the power big corporations have, while not hurting small/local business owners. A VAT tax is likely a much better solution to this problem.

Increasing real estate taxes is one way to ensure only big corporations with extensive logistics networks and high profit margins, that pay their laborers minimum wage would be able to survive. The point is to prioritize people over corporations, and your solution misses that completely.

Smaller businesses are also more swift and responsive to needs in their environment (when they have enough resources). While big companies are prone to take risk-averse actions (layoffs, outsourcing, store closures), smaller businesses have less layers of management, so pivots and benevolent actions are more likely.

> Smaller businesses are also more swift and responsive to needs in their environment

And yet, the covid crisis demonstrates the opposite effect.

I'm not so sure about the tremendous benefits of having locally-wealthy people instead of remotely-wealthy people. As I've gotten more involved in local politics, I've discovered that local small business owners have a quite toxic influence on local politics. Who funds the campaigns opposing density? Often it's small business owners. In Seattle, the city was trying to create spaces where addicts could safely use needle drugs (and get services and be off the street). Who opposed this? Small business owners.

Additionally, because they fly under the radar and are less efficient, small businesses can be some of the most exploitative workplaces. Small businesses are also often exempted from pro-worker regulations, for example they do not have to provide healthcare to their employees. Several small businesses in cities I've lived in have waged years-long union-busting campaigns.

The point isn't that small businesses are worse than large ones, I just think they have a progressive halo which is often undeserved.

I'm struggling to see how local people influencing local politics is a bad thing. Would you prefer for remote corporations to control local politics?

No, I'd just prefer we're equally critical of wealthy and corporate interests controlling our politics, regardless of where they live.

I wish we were equally critical of everyone controlling our politics regardless of wealth and location. No one's preferred policy positions are above criticism.

And that wealth goes into people's pension funds, and gives them more money to spend in their community in retirement. Why the assumption that money magically disappears once it gets to Walmart?

For big public companies, the owners can be distributed in many communities.

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