A Defense Of Big Businesses

Jan 10 2013 @ 7:33am

Adam Ozimek argues "that there is nothing magical about small businesses":

There are many reasons why big businesses can be better than small businesses. How well would Amazon or Walmart work as a small business? The scale they operate at allows them to lower costs and operate more efficiently, and we would lose this if they were replaced by small businesses. Would our lives be better if instead of Apple we has ten thousand small computer companies? Economies of scale and scope abound in our economy, if they didn’t you wouldn’t observe as many large businesses as you do. Regulations may affect firm size on the margin, but there is no regulation that explains the domination of Apple, Walmart, Amazon, and other big businesses.

We would be better off if people would stop romanticizing small businesses and instead focused on the outcomes that really matter, like economic growth and unemployment.