Industrial Complexes Squeezing Out the Little Guys

The US is entering an adolescent phase of centralization involving the consolidation of corporations and the rise of Industrial Complexes.

September 25, 2023

By: Bobby Casey, Managing Director GWP

industrial complex Here are two facts about small businesses in the US:

  • Small businesses accounted for just over 50% of GDP in the late 1990s; by 2010 that dropped to 44.6%.
  • In 2004, small businesses accounted for just over 50% of jobs in the US; by 2014, that dropped to 48.3%.

Here’s another fact:

  • In 2008, for the first time since 1939, there were more government jobs than goods-producing jobs.

It’s not because we’re just booming over here either. One could expect a percentage to go down if the whole number were something to write home about. That’s not what’s happening here, so we can put that to rest.

2020 was the advent of one of the largest transfers of wealth from middle and poor to rich ever. I’m not against people getting or being rich. You won’t find me at any rallies talking about “eat the rich”. I love wealth. But, again, that’s not what this is!

I’ve typed and erased several starts to a thought on how to best summarize what I am seeing here. It’s extended beyond that of mere corporate welfare. I was mad enough at that with the bailouts and the subsidies and the regulatory capture… I thought that was the endgame. I even entertained the idea of a “war on small business”. It’s not even that. It’s considerably more.

Turns out corporate welfare is the infant stage of a much larger scheme… and we’ve entered the adolescent stage of it which is the rise of the Industrial Complexes.

Remember when it was just the “Military Industrial Complex” and Dwight Eisenhower with his farewell speech on TV with his foil hat? The enriching of private weapons contractors and manufacturers who’s only real client is the federal government.

Well, he wasn’t wrong, was he? We now have the Prison Industrial Complex, where we criminalize and felonize so much senseless crap, just to keep the private prisons at the contracted capacity.

Today, you might hear it expressed slightly differently: Big Ag, Big Tech, Big Media, Big Box, Big Oil, or Big Pharma.

These are also industrial complexes. They are massive industries that are consolidating into a small cartels that are willing to play the game.  This is the real fascism that has been cultivating.  Not the cultural distractions everyone claims it the second coming of the Third Reich.  

To be fair, I don’t know that they necessarily set out to do this as businesses, but they have no problem with it as a general proposition either.

The smaller competitors within these industries are getting trounced. And what’s more, they are burned by the precedent set by “following the rules”. You might be familiar with the case Cochran v. Veneman which might better be known as the “Got Milk?” case:

  • Although just about everyone has seen the “got milk?” ads on television and in print, most people do not know that (under the federal Dairy Promotion Program) dairy farmers are forced to pay for them. For traditional dairy farmers Joseph and Brenda Cochran from Westfield, Pa., the assessments added up to a hefty $4,000 a year from their thin operating budget for advertisements that obscure the distinctions between the Cochrans’ traditional farmed milk and the milk of large-scale producers. Fed up with this violation of their rights, the Cochrans challenged the law in court.

The Cochrans lost because the USDA demonstrated they already had considerable regulatory control over the dairy industry that to demand them pay into a shared ad fund was not inappropriate. It was not compelled speech, but rather “government speech”.

Steve Simpson, a senior attorney with the Institute for Justice, who represented the Cochrans said:

  • “These cases illustrate the pernicious effects of government control over economic and property rights. If government can control the vital operations of your business, ultimately it will control what you say about that business as well.”

Never mind the overwhelming corporate welfare Big Ag receives:

  • The Farm Bill is notorious for its cronyism, and rarely receives any criticism for it. This is the status quo that has received bipartisan support since 1933: “From 1996 to 2016, the top 10 percent of the companies that received the Farm Bill’s commodity subsidies — the biggest operations in sales — accounted for 77 percent of the total. This year’s bill continues to offer enormous subsidies to large corporations rather than prioritizing the needs of struggling small farmers. Farms in the top 10 percent for crop sales received 68 percent of all crop insurance subsidies in 2014.

One of the industries hit hard by all this, where there are large numbers of owner operated solopreneurs, is in the supply chain. I’m talking about the truckers.

California came for them from two directions. The first was to redefine what constitutes an independent contractor versus a part-time employee; and the second was to impose regulations on older trucks.

California’s assault was in addition to the long-standing ill-informed regulations imposed at the federal level, however. The US Department of Transportation called for electronic logging devices which was supposed to streamline the logs for truckers and keep them from getting into accidents due to overworking. It didn’t work.

The Department of Transportation likewise wanted to institute some clean air initiatives by imposing a mandate for diesel particulate filters on all trucks by 2017. They proved to be costly not just in implementation, but in the down time they imposed from clogging and the cost to replace/repair that.

They don’t like small businesses, owner-operated or solopreneurs. They like large, multinational conglomerates. And they are all but yelling it with their regulations.

Healthcare went from free market fraternities to insurance run cartels. We watched in real time as the Affordable Care Act (a.k.a. Obamacare) forced this consolidation and neutralized any sort of competition or choice.

We have a medical industry that operates now like an assembly line to medication. We’ve pathologized everything, and decided medication is the only way to deal with it. And government keeps subsidizing it.

Big Tech and Big Media march in lock step with the government, and nothing spells that out more clearly than the Twitter files.

This is to say nothing of the banks, which all ladder up to the same central banking system.

There’s barely any competition and there’s faint boundaries between corporations and government. All of this is amalgamating into a major industrial complexes that rely on government in some way for grants, tax breaks, favors, business. They become so successful from being propped up by the government, that retirement funds get deviated there. And when you have retirement funds and pensions housed there, they become too big to fail.

Earlier I called this an adolescent stage. An adolescent stage to what, though? Well, consolidation accelerated by government policy and support only points to one thing: state run everything. Central planning across the board.  The Socialist dream.  

The greatest act of defiance then is to keep pushing small businesses.

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