Defending small business is a way of life for me. I’ve always wrestled with the impact that a larger and more efficient business has on a community, especially the small businesses that are forced to close down. Wal-Mart, for instance, is a giant small business killer.

On the one hand, larger firms often provide lower costs and a broader selection. As a capitalist, I admire that. But they also love to limit competition whenever they can (think big banks for this one).  That I find to be unfair.

Since I see the good and the bad on this topic,  The Great A&P and the Struggle for Small Business in America by Marc Levinson was really enjoyable.

Before there was a Wal-Mart, there was A&P (originally The Great Atlantic & Pacific Tea Company). It was around for over 100 years and was almost entirely family owned. They were the largest grocer in America for nearly their entire existence. A&P was the first retail company to have over $1 million in annual sales, and the largest retailer in the world by a huge margin. After the deaths of the two brothers who turned the company into a powerhouse, A&P began to fade in the 1960’s and saw it’s final demise in the 1970’s.

The book focuses on the history of the company, along with the interesting family who owned the business. But the real insights come when the author explores the social, political and economic threats to A&P’s dominance. More than once it was taken to court for “unfair” business practices, which amounted to government agencies claiming that the company was controlling prices. Laws were passed to tax A&P out of business (it didn’t work) or limit the size of their franchises (it didn’t work either).

In the end, A&P prevailed on most of the claims against it. Their defense was simple: you can’t discredit a company for offering LOWER prices. How can you blame A&P for being so efficient that it was able to sell food at a price lower than the small mom & pop businesses? You really can’t.

And there’s the dilemma. I want to support the small business, but I admire the efficiencies of an A&P. The government argued that A&P was intent on driving out all of their competition so that they could then raise prices. But that makes no sense … for one thing, they didn’t do it, and you can’t convict for something they MIGHT do. And for another thing, even if they tried to do it, a competitor could always enter the business and offer lower prices. It happens all the time.

I like how Levinson addresses this issue. It’s fair and thoughtful. I like how he structures it along the lines of capitalism versus competition. Big businesses tend to love capitalism but hate competition, and they operate accordingly. For a community, a society, indeed a country to work well, you need a healthy balance of both.

A good book if you are interested in these issues. Or if you just think Wal-Mart is trying to take over the world. If history is any indication, they probably aren’t trying to do that … but even if they are they will fail.