A THEORETICAL FRAMEWORK FOR SMALL BUSINESS POLICY

A number of public policy issues have been discussed in this article, the most important of which are: 1. Small business would not need special consideration if our economy were basically a competitive one. 2. A large and growing segment of our economy has sufficient market and political power to make our economy basically non-competitive. 3. Small firms tend to provide price competition, to lead in the development of new products and processes, and to generate new innovations and new employment. 4. Government policy tends to create artificial economies of scale, giving an unwarranted advantage to the very large firm. As a first approximation, a policy of government neutrality on firms of varying size is needed. But, because of discriminations which already exist which favor large firms over small firms, special small business programs may be necessary to provide an equitable policy base. Unfortunately, programs designed to benefit all business, like the investment tax credit, tend to primarily benefit larger firms (Berney, 1979). This is the case for two reasons. First, there is a basic difference in production relationships: large firms tend to be more capital intensive and small firms more labor intensive. Second, the more complex a rule or regulation, the more costly it is for small business to use it. Consequently, even the employment tax credit, which should benefit the small firm is not used by them. Instead, it tends more to benefit the larger firm. Neutrality, as a governmental policy, would appear to demand different treatment for firms of varying size. As an example, the “regulatory flexibility” concept applies different standards to different sized firms so that the burden of regulation is more equitably distributed. The concept of encouraging or requiring financial institutions and other lenders to establish “dual prime rates” is a further example. Since small firms appear to have much higher debt to equity ratios and rely more heavily on shorter-term bank credit, they are more heavily burdened by a tight money policy which forces increases of interest rates. Thus, dual prime rates help to spread the burden of rising interest costs more equally. As many people prefer to work for themselves, equalizing the burden of government policy could only serve to increase the basic growth rate for small business, thus providing an easier start for entrepreneurs and would encourage a more rapid rate of economic growth. None of these discussions, however, argues that small business should be protected from failure. The more efficient firms will succeed and prosper, and the least efficient will not. Many currently successful entrepreneurs learn how to improve their production processes or managerial skills from their failures. What is being recommended as a first step is that government should concentrate on equalizing burdens and benefits in order to achieve true neutrality. If private economies of scale do indeed exist, new firms must grow to survive; what the government should not create are artificial economies of scale with public policy. A strong argument for further action can also be made: it appears that significant external benefits are produced by an economic system with a dynamic small business sector. Since these benefits go to society as a whole rather than entrepreneurs alone in the form of increased profits, a freely operating market without government assistance does not generate as many new small businesses as would be optimal for our society. To internalize the benefits that come from small business, governmental programs need to be devised to increase the rate of return on new, innovative small businesses. Should this happen, we could then anticipate increased rapid rates of innovation and technological change, more rapid rates of employment growth, expanded price competition in all sectors of the economy, and improved export capabilities, in short, true flexibility in our capitalistic system.     

Migration,Human Resource Transfers,and Development Contexts: A Logit Analysis of Venezuelan Data

This paper is concerned with the reciprocal relationship between migration and development in Third World settings. Using individual-level data for Venezuela, migration behavior is related to a person's age, educational attainment, gender, and characteristics of his/her place(s) of residence as an out-migrant, in-migrant, or stayer. Place characteristics are in terms of four groups based on employment patterns: the core, regional centers, resource frontiers, and traditional rural areas. Four questions are of concern. First, does development influence migration? All analyses indicate this is so. Second, does migration influence development? Findings are ambiguous in that places experiencing improvement in their mix of human capital lagged in the net number of persons obtained through migration whereas a gain in numbers was accompanied by deterioriation in human capital profiles. Third, was incipient polarization reversal occurring in Venezuela in the late 1960s, early 1970s? This paper departs from the usual approach by addressing this question in terms of human capital attributes instead of population aggregates. On this basis, polarization reversal is in evidence, particularly in regional centers. Finally, this study answers in the affirmative that places with different development characteristics generate migration streams differing in type, magnitude, explanation, and impact.     

Experimental Boat and Ship Archaeology: Principles and Methods

The need for experiments to study physical aspects of craft of the past is stated, as well as the necessity for them to have clear aims and to follow the established principles of scientific enquiry. These principles are discussed in this joint paper by ten maritime archaeologists and others, together with methods and some points of management critical to their application in this field.     

The $15 Wage Movement Moves South: Politics of Region in Labor Union Campaigns

The North American labor movement continues to wrestle with the challenges of organizing workers in the US South. This article explores the contradictory position of the South in the contemporary labor movement, using the circulation of the $15 minimum wage to ground the analysis. By problematizing the place of the South in US labor, this article contributes to efforts to complicate the geographic imaginaries of the South and to our understanding of the contemporary labor movement's expansionary projects. Drawing on qualitative interviews and participant observation in Greensboro and Durham, North Carolina, and Richmond, Virginia, I trace the abstract circulation of organizational resources, strategies, and tactics of the $15 wage movement into, throughout, and back out of the South.