Nobody Roots for Goliath: Why Americans Trust Small Business

In the long arc of human storytelling, nobody roots for Goliath. We root for David, the underdog facing impossible odds, who stands in contrast to Goliath, the big bully.

So maybe it’s not surprising that Americans root for small business in contrast to big business.

In fact, U.S. adults trust small business more than any other institution in America: According to a recent report from Pew Research Center, 86% of Americans believe small businesses have a positive effect on the way things are going in this country. In contrast, an abysmally low 29% believe the same about large corporations.

What explains this near consensus in trust in small business?

I recently fielded a brief online survey where I asked a sample of a thousand Americans to report on what comes to mind when they think of small business or big business.

When Americans think of small business, they think of David. Perhaps not in so many words, but the top ideas for respondents were “mom and pop,” “family-owned,” “local,” and “entrepreneur.” Small business reflects that irresistible national ethos: family-owned businesses that represent the American Dream and everyday people’s heroic struggles to “make it.” (Indeed, “struggle” was another common word.) Small businesses represent the bucolic myth of Main Street, USA. Even big business recognizes the appeal—you can see the small business façade at Disney’s Magic Kingdom Park.

And big business exists in contrast with small business. For big business, respondents volunteered phrases like “corporations,” “greed, “Walmart,” “Amazon,” and “profit.” In short, they talked about Goliath—the capitalist giant rolling in its success and stomping on the little guy.

The term “big business” emerged in 1905, coined at a time when concerns were trained on monopolists, robber barons, and the like, juxtaposing these enormous conglomerations of power with “small business”—what is now a romanticized view of mom-and-pop stores.

Big business is capitalism on steroids. At scale, it can generate economies of production, reducing prices, standardizing commodities, giving Americans what they want, as soon as possible, for the cheapest price. Yet the typical American’s stereotype of big business does not capture these benefits. By “big business” we mean its use, interchangeably, with corporate America and the fat-cat trappings that follow from monopolizing a market of consumers and a pool of workers.

The official definition from the Small Business Administration categorizes small businesses as firms with fewer than 500 employees. But what Americans have in mind is not the formal set of businesses covered by this definition, but rather the tantalizing myth of small business, the promise and possibility of it. They applaud the idea of supporting hardworking individuals who are supplying goods and services to their local communities. They admire the risk-taking and entrepreneurial spirit of these little guys who are trying, against all odds, to pull themselves up by their bootstraps to succeed. Who wouldn’t?

Small businesses benefit from a perception of absolute and geographic scale. They are seen as family-owned entities, imagined to be an integral part of a local community. Small businesses benefit from a Teflon group stereotype. When a specific small business is accused of misconduct (for gouging customers, engaging in fraud, discriminating against groups, or simply failing to deliver), this barely registers for many Americans (this is helped by the near extinction of local news). Any account that might surface would probably focus on allegations directed toward a specific firm. Psychologically, the process of flexible stereotyping allows us to cling to stereotypes while discounting aberrational information. For small business, this means that any specific miscreants are discounted as exceptions to the rule, atypical of the overall group of small businesses. This is how the Teflon stereotype of small businesses endures.

In contrast, think about large corporations and media coverage of them. Negative news has seductive powers. Headlines featuring large corporations revel in allegations of misconduct: abuse of power, the exploitation of workers, the gouging of consumers, the unabashed self-aggrandizement. These stereotype-consistent headlines reinforce the view of big business as Goliath. On those rare occasions when a positive headline surfaces, flexible stereotyping again allows us to discount it as aberrational, an exception to the rule.

So what lessons can other institutions learn from the trust that small businesses reap?

Trust is about the perception of intentions. It centers on the belief that a given entity will act in the service of our interests, not just in the service of the entity’s interests. We root for David because he acts on our behalf. Institutions that seek to build trust must focus on the beneficence of their intentions, whom they serve, and why.

Trust is also personal. The human brain is evolutionarily adapted to small-scale interpersonal relationships. This is why local mom-and-pop stores have such resonance. Some modern institutions can be nameless, large-scale entities that are difficult to personalize; others seem to be personified by self-aggrandizing bullies. Institutions can reap trust through personification that psychologically reduces scale to underscore human-to-human interactions.

Yet, the ultimate irony is that despite how much more we trust small businesses compared with big corporations, the majority of Americans employed in the private sector rely on big business for their livelihood. Americans freely give big businesses their business. The public has generated the consumer demand that has supported the big-boxing of America. Perhaps the question to ask is not why small businesses are so trusted by Americans, but what they can do with that. How might small businesses harness that reservoir of trust to improve their chances of success as they face Goliath?

Cindy D. Kam holds the William R. Kenan, Jr. Chair in political science at Vanderbilt University, where her research focuses on political psychology and public opinion.