One of the most underappreciated aspects of Zohran Mamdani’s successful primary campaign for New York City mayor was its connection to small business. He stopped by halal carts and bodegas and asked what challenges they faced. It is the kind of outreach that teaches policymakers about real problems in our economy and can help build trust and lasting relationships.
It is also too rare.
Fighting for an economy where small businesses can thrive was once core to the Democratic Party. Democrats built a lasting coalition by shifting economic power to ordinary Americans, checking the power of big business, and expanding the middle class. But for decades, the party has largely ceded issues important to small businesses to Republicans.
During the New Deal, small businesses were a key part of Democrats’ coalition, with President Franklin Roosevelt championing “economic freedom for the wage earner and the farmer and the small-business man.”
The government gave workers greater rights and protections and checked the power of big business in banking, retailing and agriculture. Placing checks on big business while ensuring fair opportunity for labor and small business was recognized as a path for ensuring dignified work and growing the middle class.
Since President Bill Clinton, however, the mainstream of the Democratic Party has too often treated small business as little more than a talking point. Mr. Clinton may have heaped praise on “the entrepreneurial spirit” of small-business leaders, but his embrace of President Ronald Reagan’s “big is better” antitrust policy fueled industry consolidation and allowed monopolists to squeeze out smaller rivals. Clinton-era deregulation also spurred a soaring number of bank mergers, reducing the number of places where an entrepreneur could get a loan.
From 1980 to 2020, as the share of the economy accounted for by small businesses fell, big business interests began spending heavily in elections, bending the ears of many Democrats and sometimes skewing how they saw the economy. Even when Democratic policies were better for small businesses than Republican policies, Democrats didn’t make a sustained effort to court small-business owners and turn them into a reliable base of support.
During the first three years of the Biden administration, the United States saw more new business applications than in any other period in American history, but it wasn’t enough to fully integrate small businesses into the mainstream of the Democratic coalition.
This is a mistake — and it’s time to fix it.
Small businesses are critical for our economy. They drive more than half of American job creation, power breakthrough innovations, create strong local economies and make our markets more resilient. They are also good for our democracy, giving communities more local control and creating checks against concentrated power.
Small businesses aren’t a monolith. They can range from e-commerce start-ups to food truck vendors to dry-cleaning businesses to musicians in a band.
Business owners enjoy the freedom and self-determination that come with being their own boss and the sense of stewardship that comes with knowing the buck stops with them. They also often share a common struggle: a marketplace increasingly dominated by corporate giants and gatekeepers that use coercive and abusive tactics to squeeze them out.
As chair of the Federal Trade Commission, I often heard small businesses talk about how dominant middlemen squeeze them out, how exclusionary contract terms keep them from reaching customers and how noncompete clauses block them from hiring the talent they need to grow. Many said that powerful trade associations didn’t represent their interests and that they had given up on Washington a long time ago.
Pharmacists came to the F.T.C. desperate for help. They described how pharmacy benefit managers — powerful middlemen owned by health care giants like CVS and United Health Group — can effectively dictate which drugs they can offer and how much they’ll be reimbursed.
One pharmacist cited no longer being able to sell lifesaving medications below cost and would soon be closing. Another shared that customers were now being required to use mail-order pharmacies owned by the conglomerates — a costly change for patients who risk having their medicines spoil in hot delivery vans rather than being able to pick them up nearby.
Similar dynamics are playing out across sectors: Physicians and veterinarians face pressure from private equity owners, local grocers battle discriminatory prices, and tech start-ups risk extinction due to an algorithm tweak by a Big Tech giant. This outcome is not some economic inevitability but rather a direct result of policy choices that have allowed dominant companies to concentrate control over key channels of commerce and engage in coercion and abuse.
At the F.T.C., we issued a rule banning noncompete clauses. (Big business lobbyists sued to contest the rule, which is in legal limbo.) We challenged illegal tactics that let dominant digital platforms drastically inflate the fees that entrepreneurs and start-ups must pay to reach customers. We prohibited gag orders imposed on franchisees, making it easier for these small businesses to speak up when they’re being pushed around or sold a bad deal.
This work was part of a broader effort to reinvigorate America’s antimonopoly laws, passed over a century ago to promote fair competition and protect economic freedom.
Yet opposing monopolies isn’t a niche policy for a single federal agency. Democrats at every level of government can do the same, using the levers at their disposal to push for a more fair and competitive economy.
Strikingly, Democrats with a range of ideological commitments have found success by making the needs of small businesses an important part of their policies and politics. Representative Marie Gluesenkamp Perez, a Democrat who serves a district in rural Washington State also won by President Trump, has focused on how farmers are worse off because of market consolidation and championed “right to repair” policies that would make it easier for small businesses to fix their equipment.
She and Mr. Mamdani have different politics, but they both demonstrate a deep understanding of the economic challenges their constituents face and an unusual fluency in the specifics of what these struggles look like day-to-day.(I attended a campaign event with Mr. Mamdani to discuss corporate power earlier this summer.)
Democrats can win back the trust of small businesses, but it will require more than better messaging or showing up for a photo op. We need more officials in the party to make it crystal clear that fighting for a level playing field is a core value of the Democratic Party — even when it means standing up to big business and corporate abuse.
The opportunity is ripe. Mr. Trump’s tariffs could destroy many small businesses, which have fewer resources to weather chronic economic uncertainty and may be forced by big businesses to absorb the cost increases.
This isn’t a small task. But if Democrats take it up in earnest, it could both make small business part of a winning coalition and deliver an economy that is stronger and fairer. Our party and our country would be better for it.
Lina M. Khan was chair of the Federal Trade Commission in the Biden administration.
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