As Amazon.com holds its annual shareholders meeting today, let’s take stock, so to speak.
I like it that CEO Jeff Bezos ignores Wall Street’s short-term gambling demands in order to invest in building a company. Amazon is a major creator of high-wage jobs in Seattle, and doing it in the central city (one can’t get greener). It’s innovative and creative. (Disclosure: Amazon sells my books, but so do the independent bookstores that Amazon is committed to destroying). I don’t like Amazon’s lack of corporate citizenship here. Without it from others, Seattle wouldn’t be the appealing city for Amazon’s headquarters. Amazon treats its warehouse workers poorly. The company has been a tax dodger, more than a little ironic considering its business model wouldn’t exist without the taxpayer investment in creating the Internet. It is not forthcoming about its practices, including support for the controversial corporate-power front ALEC, which has taken control of a shocking number of state legislatures.
[UPDATE: Amazon announced it won’t renew its ALEC membership].
Bezos told the ever-gullible Thomas Friedman, “I see the elimination of gatekeepers everywhere.” Friedman’s interpretation: Amazon is “making it easier and cheaper than ever to publish your own book, start your own company and chase your own dream. Never have individuals been more empowered, and we’re still just at the start of this trend.”
The reality is that Amazon is working effectively to be the mega-gatekeeper, using highly questionable tactics to gain control of supply chains and drive competitors out of business. This trend is a major cause of the squeeze on middle-class wages and opportunity. Amazon is actually a reincarnation of the trusts that Theodore Roosevelt and the Progressives worked so hard to bust. Back then, the likes of John D. Rockefeller and the robber barons behind the Northern Securities Co. didn’t use Orwellian, New Age language about how they were really “eliminating the gatekeepers.” Give them credit for being blunt about their monopolistic, plutocratic aims (Rockefeller: “Competition is a sin”).
Amazon wants it both ways. It wants to be a monopoly, or perhaps part of a cartel with Wal-Mart and other giants. It aims to crush local businesses and help starve the commons of tax money. It wants no part of civic stewardship, even as powerful, consolidated, global “capitalism” is causing ever more Americans to lose economic mobility and a chance for a better life. And it demands to be praised as a plucky destroyer of those hated “gatekeepers.”
The world is not flat. It’s spiky, as Richard Florida says. Good Amazon has helped make Seattle a city at the top of those spikes. Bad Amazon and other proto-monopolists help leave much of America behind in the valleys. It’s time for Amazon to step up and grow up. The ALEC decision is one good sign. But the Northern Securities trust more than a century ago didn’t care much about public opinion, and it’s doubtful that popular condemnation alone will rein in their successors. No wonder back then a Progressive movement demanded policy reform to return the balance to the common good. Nowadays, we’re still waiting.
And Don’t Miss: The Facebook IPO — Shareholders weren’t invited to the real party || Matt Taibbi/Rolling Stone
Today’s Econ Haiku:
Money saving tip
As the EU tips over
Cut out the summits