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Small businesses have very little power. Their suppliers are mostly large businesses, their customers can easily go elsewhere, their financial situation is perilous compared to that of a large business. The list goes on. This is why they are the first to go out of business during a downturn. I would propose that what you are observing is that small business has an easier time thriving in a society where power is decentralised and economic policy is designed to favour the common citizen, than in a society run by, of and for incumbent insiders.
And as a tool for defending society from insider predation, small businesses and freeholders have historically proven greatly inferior to the mass organisation of labour that becomes possible within the large industrial firm.
Small firms may be desirable on other grounds, of course. As you note, it is possible to prefer small business for their tradition of craftsmanship, or similar aesthetics. I happen to disagree - I rather like the industrial aesthetic - but that is a matter of society's taste and custom, so this is an area in which reasonable people can disagree.
Friends come and go. Enemies accumulate.
The essential challenge to creating more humane alternatives is that of designing and then implementing a means of governance that is far less responsive to the economic inducements of the powerful. So far most of what the last three hundred years has demonstrated is that republics tend to oligarchies, as Montesquieu noted.
"It is not necessary to have hope in order to persevere."
IOW, there's no reason to believe that its a thermodynamic equilibrium, when its just as easily a far from thermodynamic equilibrium state that happens to be a power bloc equilibrium
I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
The downside is that firms that are capable of planning and regulating economic activity on a large scale in the normal conduct of their business might instead decide to co-opt the government...
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