Dec 11

You can argue that it’s just competition as big Capital muscles small coffee houses, hardware and other stores out of existence. Yet this is not the creative destruction of Schumpeter it’s the companies maintaining dividends by having debt laden balance sheets in say the UK and over charging UK company for goodwill, raw materials and services. Thus they are subsidised by avoiding tax. They can also use their size to force down commercial rentals. Their size to push down on suppliers.

Take coffee houses as I am most familiar with them. The small mom and pop places as an American might call them probably don’t pay great but they equally do not store Frankenstein food sat there for days on end. You might even tip in one of these places. They use small spaces very efficiently compared to the chains – no doubt as it costs more.

If one wants to see the effect of advertising it comes in people’s loyalty to chains. Or maybe this also reflects people’s preference for familiarity no matter how squalid and rank. Personally usually choose a non chain.

A new chain opened one opposite a Starbucks in Twickenham and no one was in the small faux Italian one I frequent. Mercifully 4 Saturdays of international rugby and subsequent Sunday’s of full English not to mention 10 Germans on a Tuesday when I went in might help it survive. Certainly when abroad the grim chains seem less in evidence or at least less chainey. Faced with week old cake is a Focaccia sandwich or pasta bowl enough?

That is up to people’s taste and whatever my misanthropic take on that it is fair competition. However is: buying power: offshore control: debt laden onshore company immune to economic rationale as it can go bust and come back in another form: low tax: fair?

The assumption has long been people were in business to make money. This is still true for the people who run companies and who take them to the laughably imprecisely named “The Market”. However the business, or sub-businesses, can make no money as our pensions and taxman is finding. The City seems happy to take dividends before being shocked to find empty balance sheets and another loss.

Increasingly business is no different to the Mob it’s about money for individuals and who cares if you sell a £300 crate of booze for £200 if you get the money. The collapse in variety on the high street this causes is palpable. The mountains of debt created end up with the banks and that leads to the 3 other forces of the apocalypse with debt – low interest rates, money printing and austerity.

So next time you buy coffee consider what you’re supporting a local business or your future impoverishment unless of course you think the demise of economic activity caused by this will miss you.

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One Response to “Killerbucks”

  1. 1. Rebecca Gilbert Says:

    Excellent article! Someone knows the truth.

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