From “Family Capitalism and the Small Business Insurrection,” which was published in the Winter 2022 issue of Dissent.
Progressives have struggled to comprehend the foundations of the far right’s continuing support. Many assume that the populism unleashed by Donald Trump was a reaction to the decades of wage stagnation endured by the working class. But in fact, it is a movement of small-business owners, many of whom saw their assets depreciate as a result of the subprime mortgage crisis. The Trump diehards who cut their teeth in the Tea Party were not wageworkers but small-business owners concentrated in the blue-collar residential construction sector and its white-collar satellite professions of homeware retail, real estate services, mortgage brokerage, and accounting. It was the meteoric rise of this small-business sector—not deindustrialization—that gave birth to today’s far-right populism.
This style of conservatism dates back almost a century. When the largest publicly listed corporations made their peace with the New Deal state, small-business conservatives remained aloof, convinced that big business was just as responsible as big government for the growth of tax and regulatory burdens. They found their voice in the U.S. Chamber of Commerce. The lobbying group’s monthly magazine, Nation’s Business, addressed blue-collar workers as self-employed business owners in waiting, and railed against the federal agencies that would violate their constitutional freedoms. In this way, the blue-collar producer was reimagined as an aspirational small-business owner.
Crucially, the Chamber’s ideal entrepreneurial form was not simply the small business, but the small family business, whose natural labor hierarchies stood in contrast to the corporation’s suspect anonymity. Not incidentally, the Chamber of Commerce had close links with the founders of the multilevel-marketing company Amway, which, in the Sixties, perfected a method of organizing business into an elaborate structure of self-replicating contractual relationships, in which everyone who was not a leader assumed the hybrid identity of exploiter and exploited. Amway’s founders were interested in the family structure’s unique ability to exploit the unpaid labor of wives and conscript new “generations” of distributors into company culture. Resembling a Russian doll, Amway subcontracted labor to a circle of smaller family entities, who in turn presided over their own family tree of smaller contractors.
These contractual innovations were simply an extreme example of the new organizational dynamics that were gaining traction throughout American workplaces: corporate structures were dismantled into networks of private contractors, union power was undermined, and the standard employment contract was displaced by the independent contractor. Today, when a large real estate dynasty such as the Trump Organization initiates a new project, it contracts with a cascade of smaller (often family-based) companies, many of which in turn hire their own contingent of temporary workers to complete the task at hand. As with Amway, the smallest production units end up inescapably tethered to the fortunes of the founding family. This structure of mutually encased businesses replicates the hierarchical relationships of the household on a larger scale, subjecting both workers and subcontractors to the same kind of paternalist authority exercised over next-of-kin.
What is happening here is an insurrection of one form of capitalism against another: the private, unincorporated, and family-based versus the corporate, publicly traded, and shareholder-owned. In the Eighties, public corporations still accounted for the bulk of big business. This is no longer true, as more and more large companies have gone private and dynastic wealth has surged to the forefront of the American economy. Some of the largest, most successful, and asset-rich companies today are registered as private non-C corporations.
This is why the infrastructural basis of today’s far-right resurgence is neither populist nor elitist in any straightforward sense. It is both. The collapse of the public corporation into a thicket of privately contracted commercial relations has weakened the old union-mediated bonds among workers and created real economic intimacies, however fraught, between the small family-owned business and the dynastic enterprise. To prevent the emergence of a more dangerous version of Trump, we need to build an alternative set of economic solidarities.
