27 January 2016

Going Big Or Staying Small?

Owners of residential, commercial and industrial properties have the freedom to do as they please with their property according to their city's / town's civic authority.

A city council has authority to change certain rules regarding business practices in their jurisdiction and what kind of businesses can and cannot do business.

What are some pros and cons when a city decides to allow for large multi-national publicly owned corporations to do business?

Some economists understand that profits are more likely to be redistributed in a city, county, state and country when small businesses are encouraged and supported rather than large multi-nationals.

For simplicity sake, take for example a privately owned small business you are familiar with, whatever it may be.

The owner possibly lives nearby.

Their income goes to local living expenses and they possibly purchase most goods and services locally as well.

Depending on the size of business allowing for employees, the employees also spend locally and further stimulate local and associated economies.

On the other hand, with a multi-national, the stock owners (absentee / passive owners) may reside anywhere worldwide, their incomes being redistributed where they live, not always where the businesses are located.

In both cases, the city receives tax revenue (which is a motivation to allow for large companies), yet the overall economic stimulation can be unequal in terms of overall redistribution of wealth.

This is what has allowed for some city areas to be blighted; wealth not returning from where it stems.

The “business” of doing business over larger areas, or globally, is surely profitable, yet does it better serve the consumer and / or the populace living near multi-national businesses?

Read and consider this article explaining how "for every dollar we spend on food, only about 16 cents goes to the farmer. The other 84 cents go towards what economists call “marketing,” which refers not to commercials and advertising, but the entire chain that ensures food makes it from farm to plate."

If any city (those who manage and live in the city, I mean) would like to see more money staying locally, feeding local supply chains and people, and thus producing more tax revenue for the city, then cities and its people need to voice their choice to move in that direction.

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