Opinion by Adrian Kuzminski
Local business ownership
is a benchmark of prosperity
Many people are unaware of a unique feature of commercial regulation in New York State. Our state — alone in the country — requires that licenses for liquor stores, retail outlets selling wine and spirits for consumption off-premises, be limited to one location in the state owned by a single individual.
No one can own more than one liquor store in the state. The 1934 Alcoholic Beverage Control Law ensures that each of the state’s more than 1,300 liquor stores are independently owned by sole proprietors.
Why does this matter? The effect of this unusual law has been to keep an important sector of retail commerce decentralized by ensuring the wide distribution of store ownership. By limiting ownership to one store per person, the law effectively bars chain stores from selling liquor in the state.
In doing so, it provides opportunities not normally available for local entrepreneurs to succeed as independent business owners.
Local ownership should be a benchmark for prosperity. The profits from locally-owned businesses are locally retained and reinvested, keeping wealth in the community. Independent business ownership fosters a class of local leaders with experience and independence of judgment. The competition and cooperation among independent proprietors in a community is democratic in spirit; local business leaders tend to promote and sustain local civic organizations and cultural life.
There was a time when most businesses were locally owned and operated by independent producers: The family farm, the village shopkeeper, the blacksmith, the tailor, the sawmill, the saloon keeper, the doctor, the furniture maker and so on.
Today, it’s the other way around. Most locally owned, independent businesses have long since been replaced by corporate giants, from big box stores to global internet companies. Our Main Streets have been hollowed out and our local communities have lost their economic security and resilience.
It was not nature or technology but humanly made laws of incorporation which allowed private businesses to be indirectly managed for passive investors, and operate in multiple locations with few limitations.
These corporations were able to concentrate economic power to become the big businesses which dominate our economy today. As a result, distant investors are able to capture profits and drain wealth that would otherwise remain in local hands. Corporate legalisms — including the fiction of corporate “personhood” — have made possible the corporate colonization of our communities.
The Liquor Laws of 1934 could be written as they were because the repeal of prohibition created a clean slate for the reintroduction of alcohol into society. There were few vested interests to resist decentralization.
A similar situation obtains today with the recent legalization of cannabis in New York State. Here, too,
an encouraging step towards decentralization has been taken: One can be either a cannabis grower or retailer, but not both.
The idea of limiting how much of an industry can be owned by one person or corporation is worth taking seriously. If ownership of liquor stores can be limited to one per owner in the interest of a vibrant local economy, what about hardware stores, or grocery stores, or even restaurants?
There are economies of scale and other advantages to bigness, to be sure, and these need to be balanced against any attempt at economic decentralization. But it is also the case that the cheaper goods and services produced by big centralized corporations have seriously undermined the economic health of our communities. Thinking about how we might decentralize the corporate structure for products and services we take for granted might be an important first step in beginning to revitalize our local economy.