The relationship between the private sector and government has become a focal point of the 2016 presidential election. Democratic candidate Bernie Sanders has focused much of his campaign on concerns about the tax structure and how, in his view, it benefits large corporations over small businesses. Republican front-runner Donald Trump frequently emphasizes his wealth and the size of the business that bears his name.

Sanders and Trump are unique candidates, and because of that the conversation about "big business" has been amplified. That doesn't mean that the debate is any more nuanced or accurate than before.

Here's the reality about "big business" and politics:

1. Big is not inherently bad.

Last year I became the first person in my family to start a business. I began alone, working at a desk in a co-working space. After I got a little more momentum behind me I moved to a shared office, and then into an office of my own. Currently my team and I share one large desk. We need more storage space, a private phone call is out of the question, and sometimes when things don't go our way I would just like to let loose a profanity-filled tirade without wondering whether or not I'm offending the person sitting across from me.  

The plan is not to stay this small. Though we aren't the type of company that could become Google-sized one day, I would like us to become as big as we can while still providing good service to our clients. I want to be big, and bigness in and of itself isn't bad.

Every business started out small. Just because a business has grown from a twinkle in the eye of someone sitting in a garage to a multinational corporation doesn't mean that company is inherently evil.

2. Big is not inherently good.

On the other hand, a company's size is not always evidence that it is the most innovative or better run than the competition. In his 2012 book A Capitalism for the People: Recapturing the Lost Genius of American Prosperity conservative University of Chicago finance professor Luigi Zingales argues that large businesses often succeed because of their lobbying prowess.

Zingales claim isn't the abstract theorizing of someone trapped in an ivory tower. Much of my career has been spent working for or with lobbying groups and trade associations, and without a doubt large and powerful companies often have their finger placed on the legislative scale. I can say from personal experience that contrary to popular opinion the private sector frequently welcomes regulation. Individual companies and whole industries often support - or even personally help write - regulatory requirements that limit competition.

Small businesses become big businesses through innovation, good leadership, and a little luck.

But sometimes they stay big through lobbying.

Which is why...

3. Entrepreneurs need a pro-market, not a pro-business, President.

In his book Zingales argues that the "crony capitalism" that so damages small businesses is largely the product of pro-business rhetoric. Politicians end up favoring specific industries or companies (often led or owned by campaign contributors) at the expense of small businesses, and give preferred treatment under the guise of being pro-business.

Rather than a pro-business President, entrepreneurs and small business owners need a "pro-market" president who believes that competition and a free, fair market produces the best possible economy.

Whether or not a business is big is irrelevant.

What matters is ensuring that the rules of the market are fair, and that businesses get the chance to become and remain big based on hard work and innovation - not the size of their government relations budget.

Published on: Jan 29, 2016