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Why does big business inevitably turn left?

Everything is shaped by the business plan of the big...

We all remember the case of the fired Google employee who took the liberty of stating basic biological differences between men and women and how they translate into socio-behavioral differences. This action did not go down well with his superiors, who did not want to discredit themselves in the eyes of the “high society” professing cool and modern cultural Marxism by binding themselves to such rigid concepts as biological truths and facts.

The dogma that gender differences are a social construct and that differences in social standing are due solely to the all-encompassing patriarchy that men invented for themselves to oppress women is part of the political left. The same left that wants to raise taxes on them to infinity and regulate every fetish of its own until business goes bankrupt. So why is big business going left-wing when it is clearly losing out? The answer lies in the differences in business models between large and small companies.

Big business loses from leftism, but...

The fastest strategy for a business to increase its profits is not so much to constantly invent new technologies, but to grow its scale by reinvesting its current profits in new production facilities or lending them out. In other words, to increase both the market and its share in it. Sooner or later, however, the market stops growing and the company reaches its full potential. From then on, it must defend its market share from competitors in the best way possible.

At this point, the company will have too many departments for its CEOs to control and understand every single detail of the production process. There will be too many group heads, above them department heads, above them division heads, etc. Management efficiency will be lost along the chain and there may, for example, be quite a few employees who, let's say, get stuck. Then the corporation will become vulnerable to smaller, dynamic and breakthrough competitors, which, although they do not have the economies of scale of the large ones, also lack the huge and cumbersome management structure. Practice shows that a large company would hardly be able to compete with them in terms of innovation, because, for example, it will not strive to economize on every bolt, nut or sheet of metal.

...small and emerging businesses lose more in comparative terms

The only way a corporation can compete with small firms is by deepening its main advantage over them - economies of scale. One direction in which this advantage can deepen is upwards - when the company invests more in large machines, especially if its production is capital-intensive. But this is sometimes very difficult, because financial resources have their limits.

It will be much easier if the corporation succeeds in lobbying for more regulations for the entire sector, because it will be able to pay their price, due to the high capital buffers it has, unlike small players. Things like increasing the administrative burden in the form of more documentation can cost many hours of waiting in lines for the sole proprietor of a small company, while corporations have specially designated administrative departments. This documentation can be sold to the economically uneducated public with emotional words like “we do it for transparency”.

Bearers of globalism

And here comes the question: Leftist economic measures - ok, but why support for leftist social measures? Because the left is the bearer of active state intervention in the economy, and in order to win the support of leftist politicians, they must accept the full package of their program. This includes accepting the 3422783468 genders, along with their ze, zer, ber, mer addresses, proudly waving the banner of feminazism, embracing the idea of mass migration of low-intelligence, uneducated and easily violent economic migrants from the Third World. Leftists need mass acceptance of these ideas in order to be elected to public office, which means they need the support and recognition of big brands, because they carry authority among the population.

Are these concerns(s) real for Bulgaria?

Even in Bulgaria, this trend is starting to take root, as is evident from the emotional, progressive calls of the large employers' organizations to "fight the shadow economy." These calls are gradually beginning to overshadow their position for low taxes and weak state intervention in their businesses. This speaks of a resignation with the ripe situation, especially in terms of social security contributions, which have been increasing by a percentage every January for several years now, and which are suffocating small businesses.

The fight against the shadow economy, to which they call, means a tighter noose around the neck of the true real sector - the voluntary one, in which there is no state coercion in the form of forcibly withdrawn taxes and prohibitions. Instead of calling for the fight against it to be in the direction of voluntary enlightenment, the employers' organizations are undertaking efforts for its public demonization, which will only clear the competition for them now that they have seen themselves on a grand scale and have forgotten where they came from.

 

 

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About Slavcho Marinov

Slavcho Marinov holds a BA in Financial Economics from the University of Essex in the UK. He is currently pursuing a MA in Banking Management at the New Bulgarian University. A former financial media figure, Slavcho has extensive experience in covering and commenting on the economic news of the day. He has a strong interest in macroeconomics, economic efficiency, production process optimization and game theory. He is among the winners of economic essay competitions of a number of organizations, including the Bulgarian Macroeconomic Association, the Bulgarian Libertarian Society and the Atanas Burov Foundation.

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