Go to the first chapter of "Around the Block"

Go to Chapter One

West Side Story

This thoughtful, interesting book is the story of a year in the life of "the Manhattan 'square block' defined by Seventh and Eighth Avenues, 17th and 18th Streets." Starting in the spring of 1993 -- at or near the beginning, as it turns out, of the economic boom we are now enjoying -- Tom Schachtman explored the ways in which the owners and operators of businesses there were coping with the vagaries of commerce, with a particular emphasis on small businesses and the entrepreneurs who ran them. The block "is not a perfect microcosm of the American economy" for a number of reasons, but Schachtman has ample reason to choose it as his laboratory:

"So, an imperfect specimen, but a block that has its own coherence and is the center of a neighborhood, a block chock-full of people and businesses, multifaceted, quintessentially urban, and thoroughly American. Blocks like this exist in every sizable city in the country, and we usually pass them by without a second thought . . . But things of importance must be happening here if the American dream of turning hard work and enterprise into a successful, comfortable life is to survive the great forces of change now roiling the American economy. It is not too farfetched to contend that as this altogether typical block in the Chelsea district of Manhattan goes, so goes the future of our nation's cities."

At the risk of seeming to oversimplify what is a rather complex and detailed book, what is going on in that Chelsea block in 1993-94 -- and what presumably is going on there today -- is the gradual, almost invisible creation of jobs, wealth and economic growth through the establishment and nurturing of small businesses. Though three big businesses were located in this square block during this period -- Barney's, Nynex and Cahners -- they had far less to do with its vigorous commercial life than the almost innumerable small ones: two plumbing-supply companies, a video store, three deli-grocery stores, a half-dozen restaurants, a religious book publisher, a couple of health clubs . . . the list could fill the rest of this space.

"Small business" is a loose and somewhat misleading term. You and I may think of it as embodied by the mom-and-pop newsstand down the street, but the federal government defines it as one with fewer than 500 employees, which is to say that a small business can be pretty big and can underwrite the existence of a large number of employees and their dependents. Those two plumbing-supply businesses, for example, are substantial operations with clients all around the city and beyond, and that religious book publisher ships to stores throughout the nation.

Mostly, though, these small businesses really are small. Some have only a single owner/employee, such as the woman who is trying to devise and market computer games. Most have an owner or two and a handful of employees, some full-time, some part-time. Perhaps the most interesting and illuminating lesson Schachtman learned from investigating them is that these businesses are intimately and inextricably engaged with the character, personality and interests of their owners, that "economic matters cannot be untangled from business owners' personal lives" and the "mental capital" they bring with them: "While monetary capital may be a fungible commodity, which means that a unit of it taken from one place is functionally equivalent to a unit of it from another place, mental capital is not fungible; rather, it is particular to the individual, and that makes it almost impossible to evaluate without taking into account the individual's personality."

This may seem self-evident, but our economy and culture tend to operate on the assumption that business is business. Schachtman makes a most persuasive case to the contrary, arguing that how a business is organized, defined and operated is absolutely dependent on the human fallibilities -- the strengths and weaknesses, the quirks, the intellectual and personal interests, and, yes, in some cases the sexual proclivities -- of the person who establishes it. This gets lost in the bureaucracy of a big business, but in a small one it is central and inescapable.

Thus, for example, it is an essential fact about a number of the businesses Schachtman studied that their owner/operators are homosexual and that "Eighth Avenue in Chelsea is becoming a 'gay Broadway,' and that gays have money and are particular about where (and in what company) they spend it." It is now widely believed, Schachtman reports, "that successful enterprises are increasingly going to be those based within, or that have ties to, specific groupings," that they will operate within "more and more -- and narrower and narrower -- niches." It stands to reason, then, that entrepreneurs whose personalities and interests are attuned to these particular groups will be those most likely to serve them effectively and to profit from so doing.

The importance of this personal connection between business owner and business is heightened by the inescapable reality of the times: "As augmented by the computer and such electronic communication devices as the telephone, fax and modem, an individual today has more capacity than ever before in history to act on resources in ways that produce more goods than previously existed." The "mental capital" of a single small-business owner can now be multiplied many times over, which is to say that far less monetary capital and human labor are required to create a successful, productive business.

The consequences of this for the American economy and American life are only beginning to make themselves evident, but there is ample reason to believe that they are essentially benevolent. While big corporations are busily "downsizing," "destroying about as many jobs as they have been creating," small business is something else again: "A recent statistical abstract prepared by the Small Business Administration shows that companies with fewer than 500 employees created more than 13 million of the 19.3 million new jobs that emerged between 1980 and 1990, and that 10.75 million of those new jobs (82 percent) were generated by companies having fewer than 20 employees."

Not merely do these new jobs drive the engines of economic growth, but they are often jobs that entail the intense personal engagement of employees as well as owners. Working for a small business brings risks not often encountered in big, stable bureaucracies, and offers fewer benefits as well, but it provides satisfactions that bureaucracy simply cannot offer. So at least it seems, and if it proves to be true we may well end up with a workforce that is happier as well as bigger. Whatever the case, Tom Schachtman has written a good and useful book that -- unlike so much else these days -- gives cause to look to the future with hope.

Jonathan Yardley's Internet address is yardleyj@clark.net.