Statistics, which, as you know, know everything, says that the share of artels and small businesses in the post-war years was 40% of the production of household goods in the USSR, and today the share of small businesses in Russia's GDP is slowly growing and is 21.9%.
Sberbank says that on average 56,000 new active businesses appear in Russia every month, and 28,000 stop operations. At the same time, no one knows how many one-day firms are here, and how many real startups. It is impossible to use such statistics for real analytics on the state of small business. The longest in small and medium-sized businesses are held in the medical sector and in the mining industry.
One can imagine that doctors consistently earn extra money in private practice, but how to imagine a small business in oil refining or mining of ore, gas and coal is difficult to say. It can be assumed that these are mainly “gaskets” created for money laundering by the firm's management, and they do not exist in the real market. Such enterprises should rather pass under the “shadow economy” section than for small business, but the presumption of innocence in the corruption-ridden management apparatus does not allow such an operation to be carried out without a court decision. And in our court, corruption cases only get into big political showdowns.
The real number of entrepreneurs in small business is decreasing, there are only 6% of them left (not to be confused with those employed in small business, which, according to various sources, are up to 25 million people). This is a vanishing error that no longer has economic and political significance. Small business is not needed by either the population or the state - and this despite the fact that capitalism has long been in Russia, and the authorities swear at every forum that small business is the subject of its relentless concerns.
In fact, all the concerns of the authorities about small business begin and end with the work of tax and inspection bodies. Everything else is turned to small businesses well, if with their backs, or even with bared teeth. There is no cheap municipal real estate for small businesses to rent for their activities. There are no cheap credit resources for small businesses to start and develop activities. For small businesses, there is no sympathy from officials and the population. Small business lives between bandits and security officials, sometimes not understanding where some end and others begin.
But most importantly, there is no topic in life for small businesses. There is no niche for him to squeeze in with his ventures. Large manufacturers do not need small business for resale - they build their own distribution networks and create wholesale dealers. Dealers work at the prices of the company, without their own wholesale markups, receiving in the form of remuneration a percentage of the sales volume.
This creates a monopoly on sales and eliminates unnecessary competition when the product of the same company is at war with itself because of the competition of intermediaries. In general, small business as an intermediary is excluded from life as unnecessary. The Internet has replaced communications as a source of commercial information, and therefore capital concentration processes inevitably optimize the distribution networks of manufacturers, pushing out small resellers from there.
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A small reseller is archaic. It is no longer possible to find a cheaper product somewhere in order to resell it at a higher price in the age of dealer networks and the Internet. Small business cannot sell cheaper than official dealers, since apart from loans it is also burdened with rental costs and staff salaries. Nobody canceled taxes and corruption rent for the inspection bodies. A small private trader in production and in wholesale and retail trade does not withstand competition with large structures and goes bankrupt.
Trying to fit into the cost and price, small businesses start to cheat with taxes and get into black payment schemes and into smuggling at customs. This pushes him into the criminal environment, where bandits and security forces are willingly waiting for him. An attempt to integrate into the production and distribution chains of large enterprises without a solid material and financial base is doomed to failure. It is impossible to buy equipment and components without existing savings, and they arise only in the criminal business.
Thus, small business is pushed into the service sector, which is also growing in start-up costs and deals with the falling effective demand of the population. Single handicraftsmen with or without a motor, as Ilf and Petrov wrote, remained at the end of the eighties, in the era of production cooperatives, which perished at the hands of trade and purchasing cooperation. Even cafes and hairdressing salons are losing competition to network structures, surviving in old niches, but no longer knowing how to expand them.
In the field of transportation and forwarding, a small private trader also cannot compete with large companies. To buy a truck and engage in transportation has long ceased to be a profitable business, and even three trucks do not save a business from ruin.
It is impossible to become a dealer or a direct buyer in a large-scale production without large kickbacks to top managers. It is clear that if you are a monopolist, it is easier for you to deal with one large wholesaler than with hundreds of small ones, who, moreover, are always problematic in their work. The circle for small businesses is closed. Nobody really needs him except himself.
Yes, he huddles somewhere in the form of pies and kebabs, semi-handicraft car service, basement ateliers or hairdressers where they cut everything from head to toe. There are also various grocers and small shops with all sorts of belongings, but they have to work very hard in order to earn very little. This is the prose of life. So once cab drivers lost their competition to the subway and disappeared from the face of the earth like dinosaurs.
Today, all small businesses are becoming endangered dinosaurs. Neither capitalism nor socialism could stop the monopolization called "concentration of capital". All of them do not need small-scale production, it is unproductive, unprofitable, unprofitable. This is the last century of artels and small private traders, and it is over.
This is a completely objective process, and no matter how the authorities feel their guilt before small business, they cannot help it. It doesn’t need cheap loans, it needs a different technological order, not the past, the outgoing one, it is exhausted by completely objective tendencies. Artificial intelligence and robots are completely incompatible with small businesses.
In a completely objective way, the world comes to the need for state regulation of major social transformations associated with the death of a large number of traditional types of activity and the release of significant masses of labor resources. This, whatever one may say, means the socialization of the old capitalist economy, which ceases to be capitalist and increasingly gravitates towards socialist features.
For a long time, a certain transitional format arises, where production is capitalist, and distribution increasingly requires socialist methods. And the more the elite shies away from this, the higher the degree of conflict between social groups in society, for which this position is beneficial and disadvantageous.
Ultimately, unsolvable contradictions accumulate, and such a system is exploded by a social revolution, which occurs either on the initiative and under the control of the elites (revolution from above), or in a situation of chaos and the collapse of the institutions of the former statehood, unable to solve the problems of urgent social transformations (revolution from below).
The processes of resource concentration in the hands of an increasingly narrow circle of individuals and companies signify an objective process of maturation of capitalism as a system of commodity-money relations.
Until this maturation of the material and technical base of capitalism is completed, small business has a place in the economy. But as such a base matures, small business dies off, turning either into a departing nature, or it is included in the processes of mergers and consolidations, that is, it begins to strive for concentration and monopoly. Surplus labor and material resources are redistributed in society in accordance with its new structure.
Small business will never die completely, small shopkeepers and artisans will always make up some part of society. But their share will fade, as technological progress, they will certainly proletarize and replenish the ranks of hired workers.
The crisis of capitalism is precisely that the social poles are increasingly moving away from each other, and one day the resolution of the contradictions of such a distance will require recalling what the bearded classics prophesied, so misunderstood in the twentieth century, but more and more relevant as we approach the end century XXI.
A small entrepreneur will become as archaic as a coachman, potter, blacksmith or archer. Each person will represent not themselves, but the corporation. But it is impossible to stop progress, no matter how painful it may be. Society will have to live in a world where all its problems are solved by large corporations and there is absolutely no room left for small business. No one will notice his death, because by that moment everyone will have time to adapt to the situation. The new always imperceptibly floats on the old debris.