An astonishing debate is being waged by the Left over whether breaking up Amazon or nationalizing it would better serve ‘society at large.’
For a business that started, literally, in a garage a mere 25 years ago and has since become one of the largest companies in the world, with hundreds of billions in sales and employing nearly 650,000 people, Amazon is an amazing company.
To say that Amazon is a “market disruptor” would be an understatement.
“From e-commerce to cloud computing to consumer products to media and entertainment, the $900 billion behemoth has its hands in practically every of the economy,” noted Barron’s last year.
“Add to that the industries that Amazon has promised or been rumored to disrupt, and it takes an army of experts to fully assess the investment implications—opportunities or threats—to the companies in Amazon’s way,” according to Barron’s.
Despite the fact that the famously non-union company was the first to announce a minimum wage of $15 for all its workers—even higher than unionized UPS—the Left’s seemingly-irrational hatred of Amazon and its founder Jeff Bezos goes unabated.
In large measure, the Left’s hatred for Amazon comes from the company’s success at being a market disruptor—disrupting industries and destroying once-iconic companies along the way.
“One investment firm even has a ‘Death by Amazon’ index to track the stock prices of 54 retail chains they believe are most threatened by the online retailer,” CheatSheet.com reported last year.
It is, frankly, due to the success of Amazon that the Left has determined that Big Brother—the federal government—must step in.
An astonishing debate between the Marxists on the pages of the leftist on-line publication In These Times: It boils down to the Marxists arguing over whether Amazon should be broken up, or whether it should be nationalized.
The Break Up Amazon Argument
Writing to advocate the break up of Amazon, In These Times’ writer David Dayen, argues that Amazon is essentially a monopoly, citing “its buying power, predatory pricing, union-busting and vertical integration.”
Using the government’s attack on Great Atlantic & Pacific Tea Company, which later become known as A&P (and now no longer exists) in the 1940s and 50s as an example, Dayen argues:
We could sue for anti-competitive practices under current predatory pricing statutes, split off Amazon’s product lines from its marketplace business (as Elizabeth Warren has suggested), and lop off unrelated business lines (such as Amazon Web Services) and the competing businesses it absorbed (such as Zappos)—the way Bell Telephone Company was split up in the 1980s.
Dayen, though, is not fully sold on nationalizing Amazon.
Amazon is definitely a logistical marvel, capable of delivering any of a million products to anywhere in the U.S. within days (if not hours). If the Soviet Union failed at producing enough goods, the theory goes, then modern socialism could instead just piggyback on Amazon’s efficient systems and direct them through public ownership.
But this takeover would also mean co-opting how Amazon makes its system work: bullying suppliers, third-party sellers, workers and partners. In particular, forcing lower margins onto suppliers seems to be a feature of any large efficient organization, from Amazon to Walmart.
‘Let’s be reasonable’ is essentially Dayen’s argument. The government shouldn’t run a logistics business.
“Most of the things we may not like about Amazon—its treatment of workers, its carbon emissions, its use of low-wage labor, its fantastic riches for executives—could be dealt with through regulatory action and competition policy,” he writes.
The ‘Let’s Nationalize Amazon’ Argument
Unlike Dayen, In These Times’ writers Katie Parker and Adam Simpson go all in for nationalizing Amazon.
“Much of what Amazon does is harmful for reasons inherent to the logic of private ownership, and would remain so at any scale,” they write. “While the public probably does not need to own, say, The Marvelous Mrs. Maisel, much of Amazon can and should be nationalized and put to use to build a democratic economy.”
Democratic public ownership of the marketplace platform could retool this infrastructure for public good. The People’s Amazon—call it Ourmazon—could guarantee access to the marketplace for smaller producers rather than driving down the cost of their goods and services. As a public distribution network, Ourmazon could stabilize prices at a point that ensures viability and competitiveness for small businesses at a cost that benefits consumers.
One of Amazon’s key (and controversial, due to real privacy concerns) features is the massive amount of data it harvests and leverages to maximize its profits. In its current position, Amazon picks winners and losers for its own ends, with algorithms that impact prices, order search results and collate recommendations. That data could instead be optimized for a wide array of economic priorities, from reducing greenhouse gas emissions to hobbling products with labor abuses in their supply chains. A nationalized entity, managed along democratic priorities, could advantage small businesses, unionized businesses, or worker-owned businesses.
Democratic public ownership could ensure that the flow of goods meets labor and environmental standards. Amazon’s HQ2 fiasco epitomizes race-to-the-bottom urban planning, while democratically decided plans could incorporate considerations like resiliency to natural disasters or areas needing an economic revival.
Amazon is dominating its way to becoming the backbone of the U.S. economy. A nationalized company could play the backbone of a more equitable system….
Never mind the anti-American moral implications of the federal government seizing a private entity like so many petty third-world Marxist dictators have done in the past.
Never mind that the Marxists want to create an economic model like that of Venezuela or Communist China.
And, never mind that ‘natural monopolies’ do not exist without government involvement.
Amazon, love it or hate it, is not a monopoly. Like many other large businesses it has competitors—both large and small.
Right now, Amazon is doing very well at growing its businesses—much to the hatred of the Marxists on the Left.
However, that does not mean Amazon will be dominant in five, ten, or even 20 years from now.
Right now, as the Left debates breaking up or nationalizing Amazon, the next Jeff Bezos is likely sitting in a garage somewhere in the U.S. building a better mousetrap to replace Amazon.
There is only one reason anyone would want to destroy a successful enterprise like Amazon: Envy.