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a-war-is-peace“If they can get you asking the wrong questions, they don’t have to worry about the answers.”
— Thomas Pynchon,Gravity’s Rainbow

There exists a widespread and mostly true perception that politics in America has become a relentlessly negative exercise in demonizing and defaming not only one’s specific political opponent, but also any group, straw man, or bugaboo that campaign pollsters say it is profitable to attack. That, however, is not the sum of the political art as practiced by elected officials. One must also have a positive archetype to extol: a repository of virtue so far beyond reproach as to immediately engage the sentimental reflexes of the politician’s audience.

The Congressional Record fairly groans with paeans to “our men and women in uniform.” The soldier is and likely will remain the chief recipient of the hack politician’s hosanna. But running a strong second is the American small business person. Republicans, particularly, repeatedly invoke small business entrepreneurialism as a rote justification for as-close-to-zero-as-possible income tax rates on millionaires, a corporate income tax rate of zero, zero inheritance taxes, zero capital gains taxes, and zero taxes on dividends.

debtThe identification was clear: the fiscal and economic nostrums of Milton Friedman, Alan Greenspan, and the rest of the Chicago Gang are what is best for the average hardware store owner in Remsen Corners, Ohio. If the United States, in a fit of insanity, were to adopt the policies of effete, socialized Old Europe, the small business operator, the backbone of job creation, would sink under an intolerable burden of taxes and regulation. Or so the conventional wisdom.

Barry C. Lynn of the New America Foundation wrote an interesting refutation of that widely held notion. [1] He asserts that the last 30 years’ of so-called free market doctrine have not aided, but rather retarded the cause of small business. Intriguingly, he cites, but does not expand upon, the following finding: “One recent study, based on data compiled by the Organization for Economic Cooperation and Development (OECD), placed the United States second to last out of 22 rich nations in the percentage of workers who run their own businesses. Only Luxembourg ranked lower.”

It is an almost universal popular assumption in the United States that this country is much more entrepreneurial and individualistic than the purportedly lazy, pension-sponging socialists of Old Europe. Yet U.S. small business development is at the bottom of the heap of the OECD countries. Once again, our flattering self image is so wildly at variance with reality it verges on schizophrenia.

This schizophrenia is evident in how it works its way through our political practices: the very politicians who endlessly invoke small business are generally the same people who invoke the culture war when extolling small town or exurban America — a presumed venue of small business activity — as the sole repository of genuine, healthy American values, à la Sarah Palin. Yet these same elected officials will vote in Pavlovian fashion to uphold trade and other economic policies that have resulted in the destruction of independent business and a resultant hollowing-out of small town America in favor of the Wal-Martization of the countryside. Likewise their opposition to reforming the intolerable economic burden on business of healthcare, which consumes 16 percent of the nation’s gross domestic product — a percentage certain to rise inexorably if not fundamentally reformed.

Consider the overall thrust of “free market tax policy.” It is difficult to argue that the two rounds of Bush tax cuts did anything for small business or for anyone else other than Wall Street and plutocratic rentiers: for the record, the first decade of the twenty-first century was the worst decade for the economy, for job creation, and for median real income growth, since modern record-keeping began.


Lynn argues that a key inflection point in government policy towards small business came in 1981, when the Reagan administration essentially stopped enforcing anti-monopoly and small business-protection statutes. That administration’s hitherto unprecedented accretion of peacetime debt and the deregulation of savings and loan institutions are frequently cited in many commentators’ bills of indictment, but the gutting of anti-monopoly law is usually overlooked. It is also overlooked by the National Federation of Independent Business (NFIB), the self-proclaimed “voice” of small business which boasts 350,000 members, and whose policy positions generally make the U.S. Chamber of Commerce look like the Petrograd Soviet.

No doubt the political views of the average small business person are less “conservative” than those of the NFIB’s board, but the fact remains that small business entrepreneurs do tend to have more pronounced “free market” views than the average wage slave, and they vote accordingly. And, in any case, their “voice” in Washington is by default the NFIB: it is reckoned by the elected officials whom they lobby as one of the more effective pressure groups in Washington politics, along with the NRA and AIPAC. [2]

All the previous data leave us with a psychological problem: how can so many people be so ignorant of facts that they carry locked-in stereotypes which simply do not comport with the real situation: that small business creation in the United States is lagging relative to other industrialized countries? How is it that people fail to perceive the relative success or failure of policies that directly and deeply affect their economic interests? How is it that people may advocate for policies that are contrary to their own interests, or at least passively allow others to advocate those positions for them?

One does not have to believe in utopian Marxist claptrap to suspect that in coining the term “False Consciousness,” Marx, or more likely Engels, scored a bull’s eye. Why do people believe the things they do, even when their cherished ideas may be contrary to their own material interests?

In the United States, possible answers lie readily at hand for those who would look:

• American Exceptionalism: most advanced industrial counties, at least since the Second World War, no longer have an overarching system of socializing their young in a mystical national creed. They do not have a social belief system that says, subliminally, “my country is ipso facto and by the laws of God and Nature the best in the world. Accordingly, if other countries appear to have an advantage in some industrial technique, governmental policy, or social custom, I shall not study what they are doing with a view to improving my own country’s position. No, I shall rearrange the facts to fit my preconception that America is the chosen nation.”

• American anti-intellectualism: the United States periodically undergoes bouts of anti-intellectual sentiment, as Richard Hofstadter documented in his book Anti-Intellectualism in American Life. Facts are stubborn things, and so often they puncture fond illusions. Best to ignore them, and stick with folk wisdom, or the “gut.” This sort of behavior reached an apotheosis during the Bush administration, where militarily invading countries based on gut instinct, rather than ascertainable facts, was elevated to the level of a national security strategy.

• Evangelical religiosity: if things will all be set right in heaven, why bother about the stubborn inequities of this vale of tears? Especially when the Apocalypse looms. If a poll by the Pew Forum is to be believed, [3] 68 percent of U.S. respondents believe in angels and demons. Such a cross section is not likely to have a sharp appreciation of the principle of Cause and Effect.

whatskansas1In his book What’s the Matter with Kansas?Thomas Frank pondered why so many American voters voted contrary to their own economic interests, and he did not give an entirely satisfactory answer. Perhaps the reason why Americans think the United States is an entrepreneurial paradise, when it is in reality dead last among the advanced countries save for Luxembourg, is to be found in the annals of psychopathology.

Or maybe the mindset of many small business persons — and more broadly, Americans generally — can best be summed up by literary, rather than scientific, insight.

George Orwell noted the political implications of persistent delusional thinking by his countrymen at the time. In Coming Up for Air, the fictional protagonist, George Bowling, a technical member of the English middle class who thinks like the proletarian of his origins, muses about his suburban London housing development:

Merely because of the illusion that we own our houses and have what’s called “a stake in the country,” we poor saps in the Hesperides [the housing development where he lived], and all such places, are turned into Crum’s [the developer and mortgage holder’s] devoted slaves for ever. We’re all respectable householders — that’s to say Tories, yes-men, and bumsuckers. Don’t kill the goose that lays the gilded eggs! And the fact that actually we aren’t householders, that we’re all in the middle of paying for our houses and eaten up with the ghastly fear that something might happen before we’ve made the last payment, merely increases the effect. . . . [yet] every one of those poor suckers would die on the field of battle to save his country from Bolsheviks.



[1] “American small businesses needn’t go extinct,” Barry C. Lynn, Washington Post, February 21, 2010.

[2] “Outside the Big Box,” Nicole D. Kazee, Michael Lipsky, and Cathie Jo Martin, Boston Review, July/August 2008.

[3] “U.S. Religious Landscape Survey, Summary of Key Findings,” [.pdf] Pew Forum on Religion & Public Life, (Undated, 2007?).




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