Leftists Want To Break Up Amazon. That’s Idiotic.
On Tuesday, Douglas Rushkoff of Fast Company called for Amazon.com to be broken up. Their sin? They bought grocery chain Whole Foods. Rushkoff explains:
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.
This is idiotic.
First off, monopolies control 100 percent of the market. Not 90 percent. Not 50 percent. Certainly not 30 percent. The purpose of breaking companies up via governmental fiat is supposedly to prevent monopolistic practices: preventing new companies from competing by buying them out or undercutting them, or via regulatory capture, then driving up prices to insane levels. As Robert Bork noted in his classic work, The Antitrust Paradox, the purpose of preventing monopoly under the Sherman Antitrust Act is “consumer welfare.” Amazon is the best company in America for consumers, bar none. Its prices are lowest, its delivery fastest. It has made life better for hundreds of millions of people. And Amazon making grocery shopping cheaper and easier, particularly for healthy foods, is wonderful for consumers.
But Rushkoff dismisses that argument with a wave of the hand:
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.
So, Amazon may make your life better; its growth may be good for you as a consumer. But that’s not enough for Rushkoff. Amazon must be destroyed because they make prices too cheap, because they’re too good at providing products to consumers – and that means they’re destroying the industries they take over. So, for example, Amazon has destroyed the retail bookseller business: “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.”
Except that Amazon hasn’t closed up shop. It’s expanded. It’s now creating brick-and-mortar bookstores of its own. And people are buying books from Amazon because it is cheaper. I will admit that while I love bookstores, I buy nearly all my books from Amazon, often after checking them out at the local bookstore. The only good deals at local bookstores are novel paperbacks, since the price differential is minimal. As a consumer, I’ve likely saved thousands of dollars on books thanks to Amazon. And Amazon has dramatically opened the market for sellers of books, too: no longer do you need a publisher to provide a distribution platform.
But Rushkoff thinks Amazon’s business model is “one that even a proto-fascist like Henry Ford would have considered obscene.” It’s “extractive.”
This is nonsense. Rushkoff isn’t angry that Amazon is bad for consumers or for the industries in which they innovate. He’s angry that Amazon is good at its job, and he’s angry that other companies can’t compete.
But it’s a free country, thank God. If Rushkoff doesn’t like how Amazon does business, he’s free to convince others to stop buying from Amazon.