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A few points:
(1) If capitalism is based on sole proprietorship, then where does the "capital" come from to start the business? The "hard work" of the business person who started as a working class person? Well, that is how the petit-bourgeois--the restaurant owners, bar owners, gas station owners, actors, web designers--but usually even they need a bank loan from the big capitalists who get their money from two places: (1) suppression of wages of those who mine materials and manufacture goods, or manipulation of other capitalists who've done so. While there are many honest small business persons (let's not idealism them, though, there are also monstrous members of the petit-bourgeoisie) they mostly get their start up funds from big capital, who gets its funds from our blood (often, literally)
(2) If capitalism (even petit bourgeois capitalism) works only from the individual morality and social responsibility of the individual capitalist (a new form of noblesse oblige), then working people are literally at the mercy of their kindness. What is to stop, say, 25% of these small capitalists from becoming thugs who game the system and overturn the rule of law and temperance through greasing pockets? Nothing.
You can't fight corporate capitalist with small-business capitalism. The American revolution was a bourgeois revolution that overthrew the monarchy (and a major step in the right direction.) But there will be no "petit bourgeois" revolution. The petit-bourgeoisie isn't large enough to take the big bourgeois on; they don't represent the interests of workers--the majority of people in the US; and they are by nature in competition with one another. They have the workers' sympathy to a point--but often (not always, but often enough) small businesses still discriminate against LGBTs, use cheap immigrant labor, and treat workers' with contempt.
What's more; many of the petit bourgeoisie are going to be forced into the working class or the unemployed. (In fact, let's face it, many of those who've been sold on the concept of being "small businesses" (web designers, e-bay sellers, cottage industry folks, piece-meal workers of all sorts) are actually not the petit-bourgeois, but unemployed working class people just struggling to survive.
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