What will happen to small family businesses under socialism?


The People, May 18, 1991, page 6

I know someone who worked very hard, scrimped and saved to start up his own gift shop. What will happen to such small family businesses under socialism?


To put this question in proper perspective, it is important to recognize that the major capitalists who own and control the overwhelming majority of the means of production and distribution today did not. become major capitalists by working hard, scrimping and saving. Most of today's top capitalists inherited their class status; historically, many top capitalists acquired their initial block of capital through inheritance or by crooked or illicit means. But however a particular capitalist gained entrance to that class, the fact is that no one can accumulate the large quantity of capital required to become a top capitalist through any means other than the exploitation of the working class.

This question concerns only small business, and we do not deny that there may occasionally be some workers who manage to save up enough, out of their wages, to start up a small business. But it should be clearly understood that this question concerns exceptional cases, operating on the margins of the economy. For that matter, even small businesses today are often started primarily on the basis of bank loans, not a workers' savings.

Bearing these facts in mind, let us consider the fate of such petty capitalists under capitalism.

Small business firms exist in a viciously competitive climate. Eighty percent of all new businesses fail within 10 years! Thus, for most small business owners, even if they did get their start by "scrimping and saving," it is capitalism, not socialism, that will take their businesses away.

During their struggle to keep their businesses alive, the petty capitalists, besides putting in long hours themselves, are forced to be among the most ruthless exploiters of wage labor-often exploiting members of their own family. Those that do survive for any length of time do so only by extracting surplus value and accumulating capital through such exploitation. Thus, even if the business was started largely from what the petty capitalist saved when he or she was a worker, it increasingly comes to consist of wealth that was stolen from the working class.

Frequently, the petty capitalists are at the mercy of larger capitalists, and are not really "independent" owners. Many are but adjuncts to larger firms that own or control the "chains" of retail outlets, restaurants, real estate offices, etc. And petty capitalists generally are, at best, left with but a small share of the surplus value contained in the commodities they sell, after they pay their suppliers, bank and other creditors, landlords and the political state. Thus, even the supposed great "merit" of small business and "free enterprise"-that it permits people to "be their own boss"-is largely a fiction even for the small minority able to start up a business.

The only realistic way that workers today can truly become "their own boss," in terms of determining the policies that govern a workplace or industry, is by organizing as a class to establish a socialist society, in which all the people will own, and collectively and democratically control, all the means of production and distribution.

Socialism necessarily means abolishing the private ownership of all means of social production and distribution. However, this will not mean ruin and destitution for small business owners. On the contrary, they will become workers in a society in which all workers would be entitled to work, and to receive the full social value of what they produce. Thus, for most, if not all, of the former petty capitalists, socialism will mean greater affluence and a major increase in leisure time. And for everyone, socialist society means full economic security and the numerous advantages of life in a peaceful, harmonious and healthy social and physical environment.

All told, petty capitalists will be far better off under socialism than under capitalism. Due to the nature of their class position and outlook, only a very few petty capitalists can be expected to recognize this and act accordingly. But then, the socialist movement is fundamentally a working-class movement, more concerned with persuading and organizing the vast majority of the people who belong to the exploited class of useful producers than winning over the minority that does the exploiting.

When the working class unites politically and industrially to overthrow its exploiters and establish social ownership and democratic workers' control of the means of production, it is only taking back what it, and past generations of workers, created.