The "good old days," when were they? Many small-business owners have reflected on this question and concluded that it was when "big government" did not exist to complicate entrepreneurs' quest for the American dream. Data published in Louis Rukeyser's Business Almanac may lead some to this conclusion:
- Per capita, federal government expenditures have increased from $280 in 1950 to $5,086 today, while state and local governments spend $3,015 on every person in the United States, up from $184 in 1950.- If federal, state and local governments seceded from the Union and formed their own country with a GNP the size of today's government expenditures ($2.0 trillion), that country's government would have the fourth largest GNP in the world.
- Between 1950 and 1991, outstanding debts of the federal government increased from $257 billion to $3.2 trillion. (A trillion one-dollar bills put end to end would stretch 4 million miles past the sun.)
Certainly the good old days cannot be today? Or can they?
After the Civil War and prior to the Great Depression, the federal, state and local governments played relatively minor roles in overviewing or directing commerce in our society. In fact, prior to 1930, only two significant federal regulatory agencies existed: the Interstate Commerce Commission and the Federal Trade Commission. (The Interstate Commerce Commission was the first federal regulatory agency to be established, which was created in 1889 to monitor railroad safety.)
The business philosophy of that period of history was based on laissez-faire - "let the buyer beware" and social Darwinism - "survival of the fittest" (or largest or richest). Back then, governmental expenditures were minuscule by today's standards. Certainly, this period of American history has to be "the good old days."
What was it like to live then and to be a small business?
Air quality - The word "smog," a derivative of "smoke" and "fog," was coined in 1905 to describe the billowing air pollution of industrialized America. The mere act of breathing was a test for the citizenry living in the smokestack infested cities. The pollution that crowded the urban streets added to the problem with the stench of
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heaps of uncontrolled garbage piles, animal manure and backed-up, oozing sewers.
Food quality - Most people of the era could not afford to buy food in significant quantity or quality. The diet staple for most American was bread and tea. Due to lack of refrigeration and rapid transportation, those who could afford meat or fruit had to fear the constant threat of dysentery. Milk was often taken from diseased cattle and heavily diluted with water; sawdust was mixed with bread to increase volume; hog lard was bleached yellow and sold as butter.
Health care - Overcrowding of cities with inadequate water and sewer systems mixed with the general lack of medical knowledge led to widespread epidemics and death. Even minor afflictions meant weeks of suffering. There were no medical standards or uniform education standards for doctors. Any charlatan could take up "doctirn" by his or her own whim, hence elixir (snake-oil) doctors proliferated. And, in many cases, hospitals were places they took you if you were unconscious, because if you were conscious, you would fight off your rescuers to prevent them from taking you to such filthy, rat-infested houses of death.
Travel - During 1890, the accident rate of American railroads was five times greater than in England, causing 10,000 deaths and 80,000 serious injuries. Altercations with trains were a daily occurrence as a result of broken trestles, poor track, exploding boilers and untrained or poorly trained railroad personnel. "Travel at your own risk" could have been a motto of the era.
Business environment - 1890 to 1920 was the period of the trusts, monopolists and robber barons. Industrial collusion and manipulation were the order of the day through price fixing and deceit. Smaller businesses were devoured by larger businesses on an "unlevel playing field." One percent of the American population owned as much wealth as the other 99 percent. The industrialists of the period viewed the American labor force as a raw material, like lumber and mining ore.
Sweatshops were paying $5 a month while the workers' apartment rents usually ran $12 to $18 a month. Whole families would have to work to eke out a meager living. Children had to enter the work force as early as age 8 and work alongside their parents. The average workday was 12-16 hours and the workweek was six days. There was not much time for education, so the cycle of poverty was passed from generation to generation.
The "good old days," when were they?
The good old days may be today with our improved standards of living. But such standards come at a price - big government.
The proliferation of government and the expenses it incurs is a topic of concern for all of us. As a nation of small businesses, we must be actively engaged in reviewing our government and its activity. Big government can provide big benefits to the society it serves. However, responsible government must balance its growth against its rate of productivity.
The successful implementation of such a philosophy just might create the "good old days" of the future.
R. Kent Moon is a senior vice president of Zions First National Bank and manager of Zions' Small Business and Entrepreneurial Department.