I buy a lot of books. No scratch that. I buy a huge number of books. I adore books. In an average year I will buy dozens of books (whether I read them all in that time is debatable). I frequent used book stores and thrift stores, searching for forgotten works of wisdom and wit. I also enjoy buying books online, especially from Amazon.
Amazon almost always has what I need at a reasonable price, as well as a dozen other things I very much want. So into the Amazon cart they go! At last count, my Amazon cart has a couple hundred items on its list. (Bibliophilia is as much a curse as it is a blessing.)
So I was surprised when I learned that, according to one widely read piece, Amazon is simply awful and must be broken up.
The Case Against Amazon
Douglas Rooshkoff, in an op-ed published on Fast Company, tells us that after the announced acquisition of Whole Foods by Amazon, a friend texted, “It’s over. The world.”
Rushkoff says, “Surely the company, which now generates 30% of all online and offline retail sales growth in the United States, and already controls 40% of internet cloud services, has reached too far.” He continues:
Corporations are great at extracting all the value from a marketplace, but really bad at deploying the money they accumulate in the process. They take all the poker chips off the table, leaving nothing for the other players to exchange between themselves. And by sucking their customers and suppliers dry, such companies end up destroying the marketplaces on which they depend for revenue. It’s a form of financial obesity, where the only thing left for the company to do is acquire a new marketplace, extract all its value, and move on.
… Just as winner-takes-all network effects lead to just one Taylor Swift and millions of penniless artists, these same dynamics promote the establishment of platform monopolies like Amazon.
So many errors, so little time.
First, why is it “surely” true that a company, which has 30% of all online and offline retail sales, has “reached too far”? Why is more than a quarter of an industry just too much for any one man, in this case Jeff Bezos, to control?
Let’s be clear: Bezos doesn’t command our dollars through force. In Ayn Rand’s terms, he offers us value for value. We exchange our money for the services or goods provided by Amazon. No one coerces us into using Amazon; we buy from it because it is effective at serving us.
Second, if a 30% market share is too much for a business, what about government? Government is a monopolist in law enforcement, courts, national defense, the coining of currency, and more. If we should distrust Amazon, why shouldn’t we distrust government? Amazon has no monopoly of violence, and no army of men with guns. All it has are goods and services, offered on the open market.
A Kernel of Truth
Now, Ruskkoff has a point when he complains about the actions taken by corporations like Amazon. However, it’s not the one he thinks he does. Rushkoff thinks that, because corporations drain a particular market of all its available business, that that’s somehow a bad thing.
Businesses often act in their short term interests. Businessmen are trained to avoid uncertainty, and long-term thinking can certainly introduce uncertainty. The longer the perspective, the more uncertain the outcome. It is a rare businessman who can think long-term and make it work. Men like James J. Hill or John Rockefeller did it, but how many men are Hills or Rockefellers?
However, aside from such human failings, we’re forgetting something. As much as Rushkof may complain of how corporations bilk dollars from suppliers and customers, we must also point the finger at ourselves. Corporations wouldn’t exist if we didn’t choose to buy from them.
Keeping A Rational Outlook
However, Amazon is the product of human wants and needs. We want things available with a few keystrokes, and thanks to Amazon, we can get those things at a great bargain. Amazon can sell you a book, a shirt, a computer, a pair of pants, or a dish rack, and have it shipped to you in a couple of days.
Whatever may happen with Amazon in the future, we can say one thing about its critics. Surely, a man as smart as Rushkoff is reaching too far when he calls for breaking up businesses which will be replaced, in time, by others?