Abstract

"The Co-Creaton of the Small Business and Venture Capital Model"

Susannah Glickman, Stony Brook University (susannah.glickman@gmail.com)

In the wake of the failures to move away from military-Keynesianism, many defense engineers aligned with a growing “small business” movement as a vehicle to pursue their interests and newfound skepticism of government. The “small business” movement provided a way for these scientists to disassociate themselves from defense and instead enter the world of spinoffs and startups. Naturally, this put them in coalition with VC champion and soon-to-be Reagan campaign manager William J. Casey. Through the 1970s, Casey led a pro-venture capital mobilization which he pursued as part of his lifelong campaign to proliferate tax havens. VC and “small business” advocacy groups worked to transform federal and state government to their benefit during the Carter and Reagan administrations. Brandishing the populist small-business advocacy mantle and claiming that leveling the field for small business would empower minorities and women, they successfully realized many of their ambitions under Reagan. These ambitions had mostly to do with benefits for high-tech small businesses and deregulation.
These small businesses worked with venture capital to lobby for deregulation, lower taxes, agency money and resources, and other reforms such as exempting ‘small businesses’ from the minimum wage. Many in the coalition were committed Democrats who financially backed and frequently corresponded and worked with Senators Kerry and Kennedy. Radical anti-tax figures like Casey saw the nexus of security state and industry in high-tech as a vehicle for their ends, tying VCs to ‘tech’ and securing numerous regulatory and tax benefits and state backing, as well as promoting narratives about the importance of high-tech. This coalition also created political support and infrastructure for a broader high-tech-focused deregulatory project, as well as state-industry transformation I describe elsewhere. However, this limited pro-business industrial policy sidelined an important anti-state wing of the Reagan coalition, which had believed Reagan’s election was a symbol of the success of their movement.