The Political Roots of Small Business Identity

Abstract

A divided and largely hapless small business lobby failed to advocate effectively on behalf of small firms in the post-New Deal era. While interest-group scholars have accepted collective action-based arguments for patterns of under-mobilization, this article challenges conventional wisdom by examining historical and institutional causes of small business political fragmentation. It shows a fractured small business community emerging out of the populist era, and subsequent policy developments institutionalizing divisions and rivalries among competing factions. During the New Deal, when opportunities arose to forge a new consensus among small business groups, policymakers instead followed old scripts and reinforced received identities. Consequently, small business never came to occupy an important space in the post-New Deal political order.