Most Small Businesses Are Not Really Capitalist

Three stories from a workshop floor about care, continuity and the limits of the market

Observations from the Workshop Floor

For a shop of its size, the place felt strikingly modern. Only a few years earlier, in 1965, the business had moved out of a large Victorian building and into this new showroom on the other side of Otley Road. The new space was open, well lit and deliberately contemporary, laid out in the language of post war retail rather than the cluttered intimacy of older cycle shops. It looked, unmistakably, like a business that was doing well.

That modernity came at a cost. Something of the shop’s character was lost in the move, and not everyone liked what replaced it. Some of the working class customers who had grown up with the old premises disliked the new look precisely because it felt aspirational. It gave the impression that the business was moving away from them, even though the work, the prices and the assumptions behind them had not changed.

The 1960s had been difficult years for the British bicycle trade. Living standards had risen since the austerity of the 1950s, but that improvement worked against the industry rather than for it. For much of the working class, the bicycle had been a necessity. As prosperity arrived, car ownership followed, and bicycles were pushed aside. Shops survived on repairs, reputation and whatever steady custom they could hold on to.

By 1971 things had begun to improve, though only slightly. Across the Atlantic, an enthusiast market had emerged, and with it a renewed interest in handmade bicycles. In the shop, that work fell to John Rayner, the tall, fair haired manager of the lightweight counter. Lightweight was the old pre war term for sports and touring machines, usually built with Reynolds 531 frames. John was the racing cyclist among us, and he dealt with the customers who came in for handmade frames, organised resprays, and sold them the parts they needed to keep good bikes on the road. Most of our customers were working class cyclists who took part in amateur grassroots cycle sport. It usually fell into two forms, either road racing or time trials.

At some point around this time, the question of distributing Colnago frames to the UK trade was raised. Colnago was an Italian manufacturer whose racing frames were already becoming known internationally as some of the finest in the world, associated with professional riders and a growing sense of prestige. The approach would not have come with contracts, projections or marketing plans. This was an era when such things were discussed face to face, and when reputation mattered more than scale. What was being proposed was not simply a new product line, but a change in the character of the business. Distribution meant stock, cash tied up on the floor, commitments to other shops, and an obligation to deliver whether the season went well or badly. It was an offer that carried prestige, but also risk, and the risk was not confined to failure. Success would have required the workshop to reorganise itself around volume and throughput, rather than the careful, irregular rhythm of handmade work.

Ellis Briggs was essentially a craft business with a retail shop, and the shift implied by distribution would have altered that balance completely. It would have meant holding far more stock, tying up more capital, and taking on obligations well beyond the workshop itself. The rewards, if it worked, would have been different too. Profit would no longer have depended primarily on skilled labour that resisted scaling, but on the movement of finished goods through the shop. The craft side of the business would not have disappeared overnight, but it would have become harder to justify, and easier to sideline. Distribution has its own complications, but it simplifies one thing above all. It replaces the uncertain returns of skill, judgement and time with the more predictable logic of volume.

Whatever the decision, it would have been taken with a clear sense of what might be gained, and what would be lost.

One afternoon, John Rayner was dealing with a customer who had come in to collect a new frame. They talked for a long time. John went through what was still needed to complete the build, the parts, the choices, the order in which things ought to be done. The customer paid for the frame, thanked him, and left.

After he had gone, John stood there for a moment, looking unsettled. Jack Briggs’ son, John Briggs, was in the shop at the time, and when he saw John Rayner’s face he asked him what was wrong. John said that the customer had listened carefully, asked all the right questions, and then walked out without buying any of the parts he would need to finish the bike.

That was the point at which it became clear that something had changed. The business had always worked on the assumption that a frame sale was part of a larger whole. Margins on individual parts were small, but taken together, frame, components, fitting and advice, the sums made sense. More importantly, the customer left with a bicycle that worked as it should.

Mail order broke that logic. Parts could be bought elsewhere, in bulk, at prices the shop could not match without changing its entire operation. It would have been possible to follow suit, to strip advice out of the transaction and compete on volume. But that would have meant giving up the model that tied responsibility to the sale. The shop continued to price its work on the assumption that care was part of what was being sold, even as the market moved away from that idea.

Andrew had not originally been intended to become a framebuilder. When it became clear that there was no one within the family who could take the work on, Jack Briggs asked a young mechanic in the shop whether he would be willing to learn. Andrew agreed, and for the next twenty years he built every Ellis Briggs frame that left the workshop.

By the 1990s the market had changed. Aluminium frames had become common, and for many cyclists they were cheaper and lighter than anything made by hand. Demand for steel frames declined, and with it the amount of building and repair work coming through the door. Andrew spent more and more time on odd jobs around the shop, and less time at the bench.

One day he came down to the office and asked whether there was any point in him staying. He said he could earn more money working at ASDA.

Two things matter about that moment. The first is that it took Andrew twenty years to ask the question. The second is that the brothers did not immediately take him up on it. There was no clear economic case for keeping a framebuilder when the market no longer wanted frames. But the decision was not treated as a simple calculation. It was allowed to sit, unresolved, because what was at stake was not just a wage, but a life organised around a skill the business itself had asked him to learn.

What These Stories Have in Common

Taken separately, each of these observations could be explained away. A cautious decision, a shift in retail practices, a loyal employee caught by market change. None of this is unusual on its own. What matters is that they all occurred in the same place, under the same roof, and were handled in the same way.

The common feature is not sentiment, nor nostalgia, nor an aversion to profit. It is the presence of limits. In each case, there were things the business could have done that would have made more money, simplified operations, or improved competitiveness. And in each case, those options were understood clearly and then set aside.

This is the point at which the language we usually reach for begins to falter.

Capitalism is very good at explaining why firms grow, why they compete on price, and why labour is shed when it no longer pays for itself. It is much less good at explaining why a business would refuse a profitable opportunity, continue to price work in a way that assumes responsibility rather than extraction, or hesitate to discard a skill it no longer has a market for.

These are not irrational decisions. They are rational within a different framework.

That framework is what has long been described as a moral economy. Not an economy without money, but one in which economic decisions are constrained by shared understandings of obligation, fairness and responsibility. In a moral economy, profit matters, but it is not sovereign. It exists alongside duties to customers, workers, the trade itself and the future.

Seen in that light, the stories from the workshop floor are not anomalies. They are examples of a business operating according to a logic older than capitalism, and more fragile.

The refusal to reorganise around distribution was not a rejection of commerce, but a judgement about what kind of commerce could be lived with. The decision to absorb the loss created by mail order competition was not naïve, but an attempt to preserve a model in which advice and care were not stripped out of the sale. The hesitation over Andrew was not indecision, but recognition that a person cannot be treated as surplus in the same way as a product line.

None of this means the business stood outside the market. It paid wages, charged prices, and worried constantly about cash flow. But it was not governed solely by the pursuit of accumulation. It survived by balancing money against something else, and that balance was renegotiated continually, often at cost.

This is why debates about whether small business owners can be kind capitalists tend to miss the point. The issue is not the moral character of individuals. It is that many small firms do not actually behave like capitalist enterprises in the theoretical sense at all. They operate in markets, but they are not organised around maximising return on capital. They are organised around continuity.

That continuity is expensive. It is paid for through longer hours, lower margins, deferred investment and, often, self exploitation. The moral economy does not float above the market untouched. It survives inside it by absorbing pressure that the system itself does not recognise.

This also explains why such businesses are increasingly precarious. As markets become more abstract, more scaled and more detached from place, the informal norms that sustain moral economies erode. Care becomes uncompetitive. Skill becomes a liability. Time spent doing things properly looks like inefficiency.

What remains remarkable is not that these businesses struggle, but that so many persist in acting as though something other than price still matters.

The stories in Part One are not arguments against capitalism as an idea. They are observations about its limits. They show that much of the everyday economy continues to function because people and firms behave as if those limits exist, even when the system around them denies it.

The question, then, is not whether small businesses can survive by acting this way. Many already do, at considerable cost. The question is whether we are willing to recognise that they are holding together forms of economic life that capitalism itself cannot generate, and whether we are prepared to build structures that support that work rather than quietly punishing it.