It’s big. It’s successful! It has greatly enhanced the average consumer’s life with its low prices and fast shipping. And now, Amazon must be broken up because…why?
Amazon just purchased Whole Foods. This means it’s going into direct competition with Wal-Mart. I saw it written somewhere that Amazon is trying to become Wal-Mart, and Wal-Mart is trying to become Amazon. Wal-Mart is the big box retail store trying to increase its share of the online market. Amazon is the online market trying to increase its share of retail sales.
Amazon offers low prices. If you go into any retail store and see an item you like, chances are you can find it on Amazon for cheaper. And, you can have it delivered to your doorstep in two days, for free, if you’re an Amazon Prime customer. Grocery shopping is different. We’re not there yet. There were some online attempts that crashed-and-burned during the Dot-Com Bust. A handful of small online grocery order-and-delivery companies rose up out of that tumultuous period, but the shift to mainstream grocery delivery hasn’t begun yet.
But now the handwriting is on the wall: Amazon’s aggressive price competition is about to invade the halls of traditional grocery chains like Kroger and Publix. And liberals are screaming.
For some reason. That they really can’t explain, except that it’s just what liberals do when large firms offer great deals to consumers while simultaneously putting other established, but less efficient competitors out of business. Consider what this blogger has written:
“Amazon just bought Whole Foods,” my friend texted me seconds after the announcement of the proposed acquisition. “It’s over. The world.”
This unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force. 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.
So, the argument so far: Amazon should be broken up (by the government) because it has reached too far. But what does that really mean? I think it has something to do with saving the planet. He continues:
Whatever you may think of Jeff Bezos, and whether or not antitrust regulations can justifiably be applied to a company whose expansion doesn’t raise but actually lowers costs for end consumers, may be beside the point. Many of us get that something is amiss, but are ourselves so deeply enmeshed in the logic of last century’s version of free-market industrial capitalism that we can’t quite bring ourselves to call this out for the threat it poses to our markets, our economy, and even our planet.
Amazon is lowering prices that consumers pay. This means their monthly budgets get some relief. Their labor lets them buy and save more, even though wages are stagnant, and have been since the 1970s.
He claims that monopolies were broken up in the old “industrial economy” because they gained total control over the production chain. Efficient control. Like Andrew Carnegie did, which drove steel prices into the dirt and gave rise to the concrete-and-steel structures that undergird our entire modern world. This is bad, he assures us.
Basically, he says that this aggressive price competition, which has accelerated in the modern digital era, will have bad long-term effects that the companies don’t think about. The worst of those effects, he articulates as thus:
[Corporations] Use a war chest of capital to undercut prices, put competitors out of business, become the sole employer in the community, turn employees into part-time shift workers, lobby for deregulation, and effectively extract all the value from a given region before closing up shop and moving to the next one…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.
That’s as clear as he comes for explaining why all of this is bad. And it’s nonsense. Companies don’t “suck their customers dry.” Customers choose to spend money wherever. And they generally prefer to spend it at places that offer the lowest prices.
Customers don’t care whether employees are working shift-work or not. They applaud innovative companies that lower prices. If this means shaking up the old way of doing things, then so be it. The older players aren’t as efficient. They are resting on their laurels. They stop innovating on behalf of the consumer because there’s no competition forcing them to stay fit.
Amazon is now entering markets long established and dominated by players who have not been challenged for their positions of dominance. Amazon is doing this on behalf of the consumer. It is representing the folks who want cheaper prices.
And this is upsetting the old boys. Liberals scream about it. It’s so bad, that the planet may be in danger. The liberals who cry out for the government to slow Amazon’s march are working for the big-name, money-grubbing companies that they claim to despise. They fear the new world order, but we should embrace it.
Save money. Live better. That’s Wal-Mart’s slogan. But now, Amazon is doing it better.
Liberals regulate. They love the power that comes from regulation. They get to be in control. But the bureaucrats can’t keep up in the digital age. They can’t issue new regulations fast enough. That’s positive for liberty. It’s positive for our budgets. But that doesn’t stop the liberals from screaming.
They’re still trapped in the logic of last-century’s age of Progressivism.