Reply #11: Too generalized to be meaningful [View All]

[Spike89]

There are sometimes good reasons that arguments can't be totally determined by facts. It is a fact that many regulations only kick in for businesses of a certain size (usually these are labor laws and are triggered by the number of employees on the payroll, or sometimes the value of the payroll). These certainly help small business compete with corporate foes. There are other regulations that are "equal" but often hurt a small business more. For instance, a small ready-mix company (an example from my in-laws) has to obey the same groundwater run-off regulations as the "big guys". That is equal, but the big guys have maybe 12 or more plants and can have engineers draw up a "universal" drainage solution. The plans cost, say $1 million dollars, and the implementation another $1 million.
Now in the above equal example, the small ready-mix operator is actually unlikely to actually pay $1 million for plans, instead they'll try and get by with paying about 1/2 that, but they're likely to end up paying at least the full $1 million for implementation. Assuming that their "cut-rate" plan works and they don't get sued and have to pay fines for an inadequate system, the small company is out $1.5-$1.75 million. The corporation spreads development cost over 12 plants (probably gets discounts on bulk material purchasing too) and ends up with a total per plant cost of less than $1.1 million and a better, probably more efficient system. In a low-margin, competitive business, the difference of $400,000-$650,000 is huge.
In short, some regulation hurts small business, some helps. Another set of factors that are extremely slippery and hard to quantify are primary and secondary benefits. Using the two examples above, you can quickly see how complex it becomes. For instance, a regulation requiring medical insurance for all companies with more than 400 employees has a primary benefit of ensuring that those employees have medical insurance, a secondary benefit is that smaller businesses are likely to also offer it in an effort to stay competitive. The law "helps" small business in that they are required to spend what the big guys do, but much of that advantage goes away because the small business will likely try and be competitive and they can't get as good rates/coverage for the same $$$.
Fortunately, the equalization also works somewhat in the other example. The primary benefit is cleaner water, which is probably a neutral fiscal benefit for both companies, but the small business is much more likely to be located in the same area as its owner, so in a sense, they are getting the secondary benefit of a cleaner hometown. The point is that there are tons of variables.
The real question is do we want our food supply to be safe, and is it worth losing some marginal small businesses to ensure that safety? Do we want the cheapest electric power, or do we want to make sure the dams and nuclear plants are safe? As with most questions, any answer that has no nuance is no answer at all.