Congressman Jeff Fortenberry

Representing the 1st District of Nebraska

Fort Report: Small Business Saturday

Dec 1, 2017
Fort Report

Small Business Saturday occurred this past week.  I like it.  It's not exactly a national holiday to be celebrated, but it reminds us of the importance of Main Street as an essential part of a properly functioning market based economy.   

It should not come as too big of a surprise that the idea of Small Business Saturday came from a major credit card corporation.  I was impressed by their initiative, so awhile back, I randomly placed a call to the CEO to commend the company.  He proudly informed me that the idea came from an intern. 

We are living in a paradoxical age where we are more and more dependent on big business for information flow and consumer goods, and at the same time, we are more and more skeptical of this model.  I was trained in an era where economic language was cast in terms of efficiency, optimization, economies of scale, production capacity, inputs, the free flow of capital and labor, on and on--all part of the vocabulary of academic economic theory.  These are analytical, mechanical terms--necessary for understanding market function--but lacking any connection to deeper purpose.   

Ultimately a properly functioning market is a connector of community, a delivery mechanism for material well-being, and an opportunity enhancer for individual initiative.  The classical economic expressions lack a deeper understanding of the ultimate purpose of production.  I once asked a professor:  Who does normative analysis--what ought to be?  He answered--no one.

We are long past the time when working one's entire career for the same large corporation guaranteed security and wellbeing.  The current corporate construct is desperately driven and hopelessly fragmented by quarterly profit mandates.  Short term decisions overrule long term strategy.  While occasionally brought to heel by scandal and malfeasance, most multinationals are no longer tethered to a face or a place--so they pitch us on TV and print with caring images, and kindly deem us worthy to help with their chosen causes.  The cities with major hub airports benefit.  The rest of America buys. 

One of America's favorite corporations is Apple, an impressively disruptive organization that helped usher in the information age.  It's sleek, edgy, and innovative.  It shows what America can do.  Many of us have benefited.  But let's take a deeper look.  Apple is the largest company by market cap in the world.  Most people think the headquarters of Apple world is Cupertino, California.  A few others--think it is tax-friendly Dublin, Ireland, where Apple’s intellectual property (the literal coin of the company’s realm) is registered. 

As recently documented by the BBC, the truth is that for years Apple took advantage of a fluke in Irish tax law called “the Double Irish.”  Apple declared corporate residence in Ireland without actually residing there or anywhere for that matter. Apple Computer’s headquarters was literally and figuratively in the cloud, with significant production sources coming from China.  Economies of scale create efficiency, but creative disruption does not have to mean abandonment.  The ongoing tax debate seeks to rebalance a number of business inequities, particularly for small business, where most jobs come from.

While large businesses retain a necessary space in producing certain types of goods and large scale industrial products, and can provide exciting opportunity, there is a hunger for the next economic trend to reorient around the revitalization of Main Street—including local food and sustainable energy production, smarter services, and smaller scale manufacturing--recreating that long lost sense of place within our communities.  Imagine a new urbanism of an economic ecosystem with friendly neighborhoods, nearby centers of smaller scale, micro businesses, contextually appropriate architecture, and a burgeoning supply of easily accessible public space.  We see this trend developing. 

Before Kent retired, I used to shop at his shoe store.  He knew me, he knew my size.  Kent relied upon far away manufacturers, but he added the value of excellent service.  Even if it wasn't Small Business Saturday, he always got me to happily spend more than I wanted.  Small business provides the associative attachment, the local cultural touchstones necessary for humane economies of scale.