As soon as you start viewing amazon's core competency and competitive advantage as being a tax dodge everything else makes a lot more sense. They're not really much good at anything else but having that massive tax dodge advantage takes the whole industry on a competitive spree toward the gutter.
Remember when it became well known what a terrible employer amazon are? So they paid staff to fake twitter post positive things about working at amazon? The only thing that will improve amazon's behavior is if they percieive a threat of losing their tax dodges due to political unpopularity.
See now all this looks a lot more to me like vested interest socialism and cronyism than anything resembling capitalism but I'm sure my socialist friends will view it as the opposite. Everyone is holding their nose at the sheer stench of it.
Whatever your cause without cleaning up the endemic, pervasive corruption leading to massive regulatory capture, that cause is lost.
Amazon is the new socialism. There are basic services which the government ought to provide -- access to unlimited books, movies, music, software, and similar. It's dramatically more economically efficient that way. The governments won't, for a whole range of reasons. Amazon seems to be stepping up. You pay a private tax, and you join a private government.
Amazon is the best of what capitalism can offer. They have basically crushed competition by focusing on providing better value, not building a monopoly through lobbying or a legal moat.
Given that, I wish us economic policy was focused on allowing more Amazon’s to exist in more industries, and a social policy that focused on helping the folks that are acutely negatively impacted by competition.
I don't see why Amazon is the only company privileged to grow. The only reason they are capable of operating right now (as in - on their low margins) is the sheer size they had reached by this time - and they are going nowhere but towards becoming the sole monopoly in the sector.
That is - all of the power and a relatively low amount of taxes; given to their investors.
Here's another bummer: why are citizens forced to pay for the social security that is provided by the government to Amazon? For example police, roads and the airports that are the key parts of the infrastructure that are making Amazon work?
You could make a point that they are not making cash for the investors today. But the investors are making a fortune by having enough power to affect our living. I don't see why this should be in private hands and not a part of governmental institution in this case as they do not pay taxes for the same reasons.
On the other hand - it would be interesting to see Amazon becoming that hugely low-margin business that is only allowed to stay afloat by keeping their monopoly on the market but also keeping the prices low because otherwise there would be another competitor soon enough.
I'm all for raising taxation, but I've always felt Amazon is often the wrong target to pick on. They are a rare example of an old-school business in the digital age - they pinch every penny and then reinvest all revenues in the business itself or send them out as personal compensation. They don't stash billions in Bermuda accounts, they don't give them to Wall Street players with the right connections, they don't leverage their might to spike property prices, and so on. Amazon is what every big business could be if people at the top were a bit more concerned with actual efficiency and growth, and less with pure greed.
But: in their actual business practices, Amazon often squeeze the little guy - both their workers and their small-retail competitors - so they are easy to hate. They clearly display all the problems with cyberspace (who should be taxed where, when bits go up and down some fiber? Where is my data "in the cloud"? Etc etc), so they are at the nexus of a number of critiques, and rightly so. I personally don't think, though, that their overall investment/growth strategy should be attacked, because it's actually very good from a social perspective.
Innovation in wage theft or shirking of regulations/tax evasion is not innovation. Amazon built itself on ignoring expenses and processes everyone else has had to deal with for ages.
Props to em for having a logistics network, but if the abuse of their workforce is what keeps them competituve, I'd frankly prefer their collapse, as I'm not sure the distribution model we've settled on now is any better than what it replaced given the way it's adversely effected local brick and mortars.
I'd rather everybody have a shot at being a distributor than only a single monolithic company outcompeting by ignoring half the pre-reqs of business.
Amazon is not a monopoly. They offer a compelling bundle of services. The whole point of breaking up monopolies is that monopolies are uniquely positioned to manipulate market prices. None of Amazon's businesses can arbitrarily increase prices without losing customers to their competition.
In 2020 Amazon's political donations were roughly half those of Google and Microsoft, two companies who could more easily qualify as monopolies. Microsoft used to explicitly avoid political donations until the FTC made noise about breaking them up. Meta gets away with donating less because, as Zuckerberg stated on Lex Friedman, they collude with federal agencies to censor wrongthink.
Amazon will remain whole and they're going to have to raise their protection fee to the Federal Mafia.
I don't understand the people in this thread defending Amazon. They're just an impersonal corporate conglomerate that doesn't give a *&$! about you. Capitalism is about competition and the more competition the better.
On the one hand, Amazon deserves much of the success it's had. They've changed the game in both online shopping, and in infrastructure management.
Most liberal societies implement policies to create an environment of diminishing returns, to help curb the ability of companies to get "too big to fail". They also implement policies to keep the environment competitive for new companies.
Tax systems that create an environment of diminishing returns seem to be a good approach. If Amazon were paying the amount of taxes that would normally be warranted for a company of its size, this situation would be less frightening. But they've been able to take great advantage of the fatal flaw in our current approach to capitalism: aggressive reinvestment and expansion.
There is no reason to suspect that Amazon won't succeed in fully vertically integrating their supply change through private ship, air and land delivery. There is no reason to think they will not succeed in aggressively expanding into more markets, like music production, tv and movie production, audiobook production, etc. And there is no reason to think they will not aggressively seek to automate as much as they can to further augment their already substantial lead in online retail.
None of these things are inherently bad. They create good products, good services and are a general boon to society. But we need to put in some limits, whether by better tax policy, or by taking a more aggressive stance on anti-trust.
It's unfortunate that these sorts of debates often devolve into "Capitalism vs Socialism", reductionist arguments. The truth is capitalism is a fantastic tool. But unchecked capitalism has serious flaws, and regulation and unions can help to keep things in balance.
You are criticizing capitalism and globalization as a system for producing social progress, not Amazon.
Your points seem very weak to me. People perceive value from Amazon's tax "evasion" (efficiency) in buying goods at a cheaper cost. I'm sure you agree that not every dollar that goes to taxes is better spent than if it wasn't.
I highly doubt that net global employment in headcount dropped because of Amazon. For every store clerk that got fired in a US brick and mortar shop, probably 10 sweatshop workers in China were hired to make gizmos at a fraction of the cost.
If you are going to argue that the world would be better off without Amazon when hundreds of millions use and love their services every day, you need to at least make an attempt to quantify the value the company provides. You can't just point at 3 isolated data points. I'm not even saying you're wrong in your conclusions, but they're hardly unquestionable.
"I'm all for raising taxation, but I've always felt Amazon is often the wrong target to pick on."
Agreed.
Amazon is the embodiment of our new winner takes all economy. The natural result of the combination of power law distribution of attention and market unification.
If society chooses to mitigate, the two available strategies are pro-competition (anti-monopoly style breakups, artificial top-down market segmentation) or radical cashectomies (wealth redistribution thru higher tax rates and universal basic income).
I think you would be hard-pressed to find any justification for capitalism that doesn't include:
1. Competition, and
2. Property rights.
This article does effectively slam Amazon for violating both of those capitalist tenets. But it doesn't effectively say anything about capitalism; the whole problem with Amazon is that it's violating capitalist tenets by being an anti-competitive monopoly, with enough power that it can steal intellectual property with impunity. If there was meaningful competition, and Amazon was forced to respect intellectual property rights... At least as presented by this article, there wouldn't seem to be a problem.
Capitalism isn't anti-government — it relies on governments so that businesses don't have their property stolen.
Amazon's business practices do indeed suck though, and seem (to me) to be illegal. The US government should step in forcefully.
Uh, because this isn't socialism. If Amazon makes a ton of money it's perfectly okay to want to make even more, and they have no obligation to make it possible for their competitors to survive.
I am pro-free market and fiscally conservative and don't get why Trump is picking this fight with Amazon. Amazon is fantastic for consumers. Sure they have put ton's of American small brick and mortars out of business and even brought down retail institutions such as Sears and perhaps next Macy's. Yet they provide an outlet for small niche makers to sell their products to a huge online market for essentially no-overhead. Market decides, and the market has chosen the Amazon model.
In terms of them "dodging" state taxes, as far as I know they are fully compliant. If president Trump wants to make them pay their fair share, then adjust the laws. Wasn't this the same argument Trump made about not paying a ton of taxes, he said it is just smart business and he is totally compliant within the law.
Remember when it became well known what a terrible employer amazon are? So they paid staff to fake twitter post positive things about working at amazon? The only thing that will improve amazon's behavior is if they percieive a threat of losing their tax dodges due to political unpopularity.
See now all this looks a lot more to me like vested interest socialism and cronyism than anything resembling capitalism but I'm sure my socialist friends will view it as the opposite. Everyone is holding their nose at the sheer stench of it.
Whatever your cause without cleaning up the endemic, pervasive corruption leading to massive regulatory capture, that cause is lost.
reply