Small business

Fleming, Ian (2002) Small business. In: Fischer, Wolfgang Chr., (ed.) Consumers' Attitudes towards Weekend, Night & Street Markets. Josef Eul Verlag, Köln, Germany, pp. 13-19.

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[Extract] It was the initiative of the individual trader that led to the development and expansion of trade and ultimately the emergence of the market system that is the basis for modern capitalism. Small business has· always been recognized as a prime engine for innovation, growth, and employment, as well as a litmus test for the health of tile market system. The free market with competition forming tile invisible hand guiding its outcome has been demonstrated to give the most efficient results in economic terms. Capitalism is based on this principle of the market. But it has long been recognized that Capitalism contains within itself, the seeds of its own destruction. Karl Marx identified this in the middle of the nineteenth century, and despite the prescriptions of John Stuart Mill this spectre remains.

Ultimately the operation of the market, through the competitive process requires winners and losers in order to function efficiently. Optimally these wins and losses are small and cancel out over time, but if they do not, then repeated winners will grow exponentially, to the point that they are no longer merely competitive players in the market process, but have sufficient power to determine market outcomes. At this point the ability of the market forces to deliver economic efficiency is in question, in other words the market fails, and small business, the backbone of competition, becomes irrelevant in the market outcome. The market, through the forces of competition, is no longer able to guarantee the most efficient outcome; as well there may be failures in the sense of social costs and loss of diversity. These factors like competition rely on the participation of small businesses in the market.

Item ID: 14362
Item Type: Book Chapter (Research - B1)
ISBN: 978-3-89936-006-6
Keywords: consumers' attitudes; small business; weekend markets; night markets; street markets
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Date Deposited: 09 Dec 2010 23:20
FoR Codes: 14 ECONOMICS > 1402 Applied Economics > 140209 Industry Economics and Industrial Organisation @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9199 Other Economic Framework > 919999 Economic Framework not elsewhere classified @ 100%
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