16 February 2006

What happens when you subsidise big business?

Small and independent shops may vanish from the UK's High Streets by as soon as 2015, politicians have warned. BBC
How is big business subsidised? Our old favourite, the Common Agricultural Policy, has been shown overwhelmingly to benefit large agribusiness corporates and wealthy landowners. Central government also finances a transport infrastructure that heavily favours the large and global at the expense of the small and local. A - sometimes well-meaning - regulatory environment tries to deal with problems that are very often generated only by big business, but small businesses also have to comply at much higher proportionate cost. Large firms can more readily convert income into capital gains, and so pay lower taxes than most small business proprietors and of course the financial and administrative costs of compliance as a proportion of revenue are generally much lower for big businesses than small. The result can be seen in the high streets not only of the UK but of many other countries in both the developed and developing countries: small local businesses selling out to large, often trans-national chain stores.

We need reminding that it's not consumers nor markets that have led to this global takeover: it's government and big business scratching each other's backs.

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