The Death Of American Entrepreneurship And Slide Into Fascism

Business dynamism is the process by which firms continually are born, fail, expand, and contract, as some jobs are created, others are destroyed, and others still are turned over. Research has firmly established that this dynamic process is vital to productivity and sustained economic growth. Entrepreneurs play a critical role in this process, and in net job creation.

But recent research shows that dynamism is slowing down. Business churning and new firm formations have been on a persistent decline during the last few decades, and the pace of net job creation has been subdued. This decline has been documented across a broad range of sectors in the U.S. economy, even in high-tech.

Here, the geographic aspects of business dynamism are analyzed. In particular, we look at how these trends have applied to the states and metropolitan areas throughout the United States. In short, we confirm that the previously documented declines in business dynamism in the U.S. overall are a pervasive force throughout the country geographically.

In fact, we show that dynamism has declined in all fifty states and in all but a handful of the more than three hundred and sixty U.S. metropolitan areas during the last three decades. Moreover, the performance of business dynamism across the states and metros has become increasingly similar over time. In other words, the national decline in business dynamism has been a widely shared experience.

While the reasons explaining this decline are still unknown, if it persists, it implies a continuation of slow growth for the indefinite future, unless for equally unknown reasons or by virtue of entrepreneurshipenhancing policies (such as liberalized entry of high-skilled immigrants), these trends are reversed.

There isn’t much diversity in America’s economic web of life.

An image that was first posted on Reddit last year, and was recently grabbed by the folks over at PolicyMic, shows just how out-of-control corporate America has become in the years since Ronald Reagan stopped enforcing the Sherman Anti-Trust Act.

Right now, there are 10 giant corporations that control, either directly or indirectly, virtually everything we buy.

These corporations are Kraft, Coca-Cola, PepsiCo, Nestle, Proctor and Gamble, General Mills, Kellogg’s, Mars, Unilever, and Johnson & Johnson.

These 10 corporations in turn own, market, or distribute what people think of as the products of hundreds of other companies.

For example, Proctor and Gamble is best known for its cleaning and personal hygiene products, like Tide detergent, Ivory hand soap and Joy dishwashing liquid.

But the company also owns or markets other products, from IAMS dog food and Pepto-Bismol to Duracell batteries and Metamucil.

Then there’s Mars, the giant candy conglomerate responsible for Snickers bars, M&M’s and other sweet treats.

But did you know that Mars also owns or markets Pedigree dog food, Whiskas cat food and Uncle Ben’s rice?

Finally, there’s Nestlé.

Many American consumers know Nestlé for its Nescafé espresso, Nestlé ice cream or Nesquick chocolate milk.

But this coffee and chocolate milk manufacturer also owns or helps market Purina dog and cat food, Gerber baby food, Ralph Lauren cologne, and Garnier hair care products.

These giant corporations essentially have a stranglehold on America’s consumer market.

But there’s a bigger and even more disturbing picture here: many of these corporations are inter-locked and connected themselves.

Over at TheyRule.net, you can track and discover the connections between America’s largest corporations.

For example, according to TheyRule.net’s most recent information, PepsiCo has a board member who serves on the board of the Colonial Williamsburg Foundation, alongside a board member who serves on the board of the Kellogg Company.

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And, Johnson & Johnson has a board member who serves on the board of the U.S. Chamber of Commerce Foundation, with a board member of Coca-Cola.

But it wasn’t always like this.

Believe it or not, there was a time when there was plenty of competition in the American marketplace, when one corporation didn’t own 200 other companies, and when the nation’s largest corporations weren’t inter-locked.

The Sherman Ant-Trust Act was passed back in 1890.

In its prime, the law prevented businesses from overwhelming competition in the marketplace, and even required the federal government to investigate any company that tried to monopolize an industry.

The Sherman Act worked well for nearly 100 years.

But then everything changed.

When Ronald Reagan became president, the Sherman Anti-Trust Act became a thing of the past.

The break-up of AT&T, completed by Jimmy Carter, was its last gasp.

As a result, all across America, local businesses were run out of business, as giant corporations took over Main Street and dominated industry after industry.

Giant megastores like Wal-Mart and Target replaced local convenience and hardware stores, while local diners and burger joints were replaced by the likes of Burger King and McDonalds.

Big companies got bigger and bigger, to the point where today, 10 corporations control almost everything we buy.

This is not good for our economy, and it’s not good for our democracy.

When corporations have all of the power, you and I have no say in the American democracy.

Ecosystems that are broad and diverse are resilient while those that are narrow and unbalanced are fragile, and it’s the same with economies.

It’s time to bring diversity back to America’s economic web of life, and we can do that by bringing back the Sherman Anti-Trust Act, so competition can return to the American marketplace.