Why Small Is Better

by Lee Habeeb & Mike Leven
Americans fear big government for good reason — they know all about unaccountable bureaucracies.

In what may be the most important poll in recent memory, Gallup asked Americans in December what they considered “the biggest threat to the country in the future”: big government, big business, or big labor. Seventy-two percent selected “big government,” a record high in the nearly 50 years that Gallup has been asking the question. You won’t be surprised that 92 percent of Republicans pointed to government; what’s striking is that 72 percent of independents and 56 percent of Democrats also did.

When is the last time you saw 72 percent of Americans agree on anything? The percentage, which has been increasing no matter which political party is in power, has risen in direct correlation to the growth of our government. The bigger it gets, the poll screamed at us, the worse the majority of Americans feel about it.

This represents an epic opportunity for those of us who believe in free enterprise and limited government. But how do we turn that poll into a story that makes sense to ordinary Americans? It’s easy, actually: Talk about bureaucracies of all kinds, small and large.

Tell them the story of Mark, who runs his own food business. It’s located in Bergenfield, N.J., in a parking lot behind the main drag in town. His customers have been lining up five days a week for decades, because Mark makes some of the best hot dogs in the state. The dirty-water variety (so named because the dogs sit in warm, murky water all day), they’re cooked to perfection and adorned with homemade toppings that make grown men and women moan. Mark knows his customers by name and knows their orders, too. He even knows what kind of jokes make them laugh.

The owner of a local hot-dog stand — like the owner of a great local restaurant, bar, or hair salon — probably knows his customers pretty darn well. But when that hot-dog vendor expands to two hot-dog carts and then more, things can go terribly wrong. As the business grows, the owner can lose sight of his customers and focus instead on management issues. He can get lost in the swamp of company politics and sacrifice his common sense on the altar of corporate policy. And life working in such bureaucratically oriented organizations can seem utterly pointless. Isn’t that what The Office so brilliantly captured?

Some companies survive bigness. A few get better. Walmart wouldn’t be Walmart, with all its purchasing and distribution power, without the volume of business it does. But if Walmart loses sight of its customers, it could become road kill. American business history is littered with once-great companies that are great no longer. In a land where the consumers are in charge, other companies can lure them away. Sears, for instance, once ruled the retail world. By the 1960s, nearly one out of 200 U.S. workers received a Sears paycheck, and one out of every three carried a Sears credit card. But the retail giant was beaten by an unlikely adversary from an unlikely place: Sam Walton, who started his empire with one store in Rogers, Ark., in 1962.

Small has been beating big since the beginning of human history. Somewhere on a battlefield in ancient Palestine over 3,000 years ago, a young shepherd with five smooth stones and a slingshot challenged a giant warrior to a fight few thought he could win. His name was David and his opponent was Goliath. If there were odds-makers in the deserts of the Middle East like those we have in America’s desert city called Las Vegas, the shepherd would have been an underdog facing 100-to-1 odds.

The handicappers would have been wrong, though, because they would have missed some crucial information: David had been preparing for his opponent his whole life, he’d been practicing hours a day with those stones and slingshot, and he’d developed deadly accuracy. David had the advantage over Goliath, though no one — not even David — knew it. Goliath was the real underdog, because he was thoroughly unprepared to counter the skills of his much smaller opponent.

Skipping to early-20th-century American lore, would anyone have given the advantage to two bicycle mechanics from Ohio? A number of the country’s top scientific and business talent was committed to being the first to fly an engine-powered airplane. Most of these guys were trying to solve mechanical problems related to power, while the Wright brothers focused on the problem of balance. Their work in small bicycle shops gave them that insight — and that edge.

And who would have picked two kids from Stanford working in a garage to beat Microsoft and hundreds of other players vying to dominate the world of search engines? But Larry Page and Sergey Brin — the co-founders of Google — had advantages their big competitors did not. They had no turf to protect, no success to defend, no existing legacies to worry about.

Small often wins out in the workday world as well. Some Americans dislike working at large companies so much that they quit and go to smaller companies for less pay and benefits — all for a chance at having a better work experience, at a place where their initiative will be appreciated.

That’s why 72 percent of Americans think that big government is a bigger threat than big business or big labor. After all, they know that if a big business starts ignoring customers, the customers will soon ignore it. And the power of labor unions, at least in the private sector, has steadily receded in recent decades. Not so with government.

Americans also know that the bigger the government, the worse the taxpayer experience. Big bureaucracies have no incentive to behave differently. They face no accountability or competition, so they do what bureaucracies do best: serve themselves. And if you’ve experienced the mind-numbing nature of bureaucracies in the private sector — with profits, shareholders, and other measures of accountability at every turn, and competitors fighting for market share — you can imagine what big-government bureaucracies are like without such checks. The scale of incompetence would shock most Americans if they had a good look at it.

And so, too, would the rampant corruption — whether it’s the EPA looking to expand its power or teachers’ unions serving the adults while ignoring the children. Look at Detroit. A staggering 60 percent of its children live in poverty. They’re stuck in a dysfunctional city, trapped in schools that don’t even teach them how to read. Nearly half of Detroit’s adults, most of whom attended the city’s public schools, are functionally illiterate. And all the bureaucracies can do is ask the taxpayers for more money, while blocking any competition or innovation that might change outcomes.

Newt Gingrich, in his recent book Breakout, argues that the pioneers of our future are being blocked by entrenched interest groups dedicated to protecting their turf. And in no arena is that more evident than education. Online innovators such as the Khan Academy and K12 are changing the way people can obtain an education; they’re providing alternatives to an old and expensive way of doing business.

But the prison guards of the past, as Gingrich describes them, are committed to doing things the way they’ve always done them. Just as the makers of buggy whips were not thrilled by the ascension of automobiles, and candlemakers had reason to stop the advance of electric light, bureaucracies and their interest groups are trying to block breakout technologies on the horizon.  

These are the stories we should be telling — the stories of big, cold bureaucracies killing the spirit of our children and stealing their futures; the stories of how the FDA, EPA, and bureaucracies known by every acronym under the sun are killing innovation and jobs. Let’s tell stories about where the heart of America lives and breathes: in the pioneer spirit that made this country great, and that will keep it great, in individuals who never lose the drive to change their lives for the better.

If only they were given half a chance.

— Lee Habeeb is the vice president of content at Salem Radio Network. Mike Leven is the president and COO of the Las Vegas Sands and a member of the Job Creators Alliance.