December 2, 2021

businesscase

This is business

Why the Left Should Ally With Small Business

On September 5, 1955, the indomitable Walter Reuther, a towering figure in the labor movement and the head of the Congress of Industrial Organizations (CIO), began his Labor Day message to Americans by commemorating all that unions had achieved, from higher wages to greater dignity on the job. Reuther, who’d been an architect of the sit-down strikes that unionized the auto industry and who became an important ally of Martin Luther King Jr., then turned to another subject: the conditions facing the nation’s small-business owners. “Big corporations are getting more and more of the market,” he lamented.

The CIO intended to fix this problem. Its legislative platform during these years called for easing the tax burden on small businesses, extending them more credit, and stepping up antitrust enforcement. In 1957 the labor federation, which by then had become the AFL-CIO, cheered a Supreme Court antitrust ruling that went against General Motors and DuPont. The decision, the federation reported, set a legal precedent that would help prevent small businesses from being “unmercifully squeezed.” That year, the AFL-CIO demanded a “thorough-going investigation into monopoly, and legislation to protect the legitimate interests of small business.”

Reuther’s support for small business was not some strange anomaly in left-wing politics. For much of the 20th century, labor was allied with small business in the fight for a fair economy. For decades starting in the 1930s, the Democratic Party counted small businesses as a core constituency, alongside organized workers, and made their welfare a central concern of its policy agenda. This fact surprises many today because it’s a history long ago abandoned. The shift came in the 1970s, when Democrats embraced the ascendancy of big corporations, reasoning that these large entities were more easily unionized and could deliver more for consumers. In turn, liberals began to see small businesses as not worth fighting for. They were, at best, irrelevant to the left’s vision and, at worst, an obstacle to it.

Around the same time, conservatives realized that they could lay claim to small-business politics and recast it to propel an agenda that served the economic elite: cutting taxes, weakening democratic institutions, and dismantling labor and environmental protections. The dark irony of this platform was that it swelled the market share of big business at the expense of small. But the right’s small-business rhetoric was so successful that many on the left believed it, and it reinforced their idea of small business as inherently regressive, antithetical to worker interests, and opposed to Democratic values.