You might ask whether there are any underlying theories to explain the growth in number and importance of small firms. Marxist theory predicts that capitalism will degenerate into economies dominated by a small number of large firms and society will polarize between those that own them and those that work in them. To a Marxist, the rise of small firms is just another, subtler way for this trend to manifest itself. Small firms are dependent upon larger firms for their custom and well-being; they absorb risk and push down pay and conditions for workers because they are rarely unionized. However, the successful growth of so many small firms since the 1980s, the increasing fragmentation of industries and markets, and the increasing popularity of self-employment by choice would seem to belie this theory.
Swipe to navigate through the chapters of this book
Please log in to get access to this content
To get access to this content you need the following product:
- The economics of entrepreneurship 2 and public policy
- Macmillan Education UK
- Sequence number
- Chapter number