It's $280.5 billion in revenue in 2019 put it above the GDP of Romania, Peru, Ukraine, etc.
Corporations should never be allowed to get this large.
Make your case instead of dropping your groupthink everywhere. Why? And: What is the maximum size a corporation should be allowed to grow? Who gives that permission now?
I don't have an answer for how to determine when a corporation is too large, it's a very difficult question that I am not qualified to answer. As for who determines that, I think a democratic government should decide. I disagree with how the current US government makes these decisions, but I still think it is the right organization for the job.
Citation needed. Democracy is not a sufficient nor even necessary requirement for prosperity or "good" in general.
Do you want me to cite some philosophers that try to justify the value of democracy?
> However, many of those in power today won't allow it to happen since it is against their interests.
Is this bad? Can you prove it? The idea that the few shouldn't rule over the many without their consent is a political opinion.
The end goal is to have a functioning, stable, and just society. Unless we're willing to stick to rules that are proven to work, we're going to keep fumbling and wondering why things are the way they are. I bring up the Islamic Golden Age because Islam places a set of rules which dictate things like government and finance, basically red lines that should not be broken. However, everything within those lines are up to society to decide as it sees fit based on the times.
I don't want to say that Islam is "democractic" because that would give the wrong impression that it is fully in line with the West's current practices. It isn't. However, it has a concept known as "Shura", a form of consultation if you will, that allows society to determine how things are run within the boundaries I mentioned, even including the ruler (but not in the free for all manner how elections are run in the West). It's more nuanced, and it's been proven to work.
You can cite philosophers, and I can also cite philosophers that oppose democracy (again in the Western sense). It won't get anywhere, it's all hypothetical. What I did do is show you a system that has been historically proven to work. Today's system is a fumbling mess and we keep crying about it.
You're going to have to elaborate more, because Islam definitely allows people to have their voices heard. Furthermore, it not only allows people of different faiths to live on its lands, their rights are heavily protected by the law:
http://qaalarasulallah.com/hadithView.php?ID=23053
Note that the word "contracting man" here refers to a non-Muslim.
If this isn't the manifestation of justice, I don't know what is.
> If this isn't the manifestation of justice, I don't know what is.
Now imagine somebody saying that exact sentence in response to, for example, a man being stripped of his possessions because his caste is not allowed to own property. Clearly that kind of law is not reconcilable with your idea of a good society, and yet you both consider these contradictory things to be perfect justice. Does that illustrate my point?
Or: the next verse says that certain taxes should only be leveled on non-Muslims. I don't care whether or not you agree with this, the point is that both views are possible. It's impossible to prove that religious discrimination is just or unjust. It's an opinion! A society could survive perfectly well with or without that rule. Different value systems will come to different conclusions about whether that rule is a good idea.
> Now imagine somebody saying that exact sentence in response to, for example, a man being stripped of his possessions because his caste is not allowed to own property.
Is this in reference to an Islamic position? If so please provide a source.
Look up Shura laws on how these things work. Topics are delegated to experts in their respective fields who have the obligation to act out of interest of the society, a form of "meritocracy" if you will. This doesn't mean that average citizens cannot be consulted.
> for example, a man being stripped of his possessions because his caste is not allowed to own property. Does that illustrate my point?
No it doesn't, because Islam does not prohibit non-Muslims from owning properties. You have not shown what issues you have with the Islamic system so far other than conjecture.
> the next verse says that certain taxes should only be leveled on non-Muslims
Because non-Muslims are not required to pay Zakat, Muslims are already "taxed".
I feel that the discussion went on a tangent. The fact of the matter is that it is perfectly not only possible to build a society without the dangerous practice of interest, but it is in the benefit of the entire society to do so (except a relative few who stand to benefit extremely from interest and other similar practices). We've known about it for a long time now.
Democracy is the worst form of government, except for all the others. I'm a firm believer in continuing to innovate and improve governance. I don't think it's just an abstract philosophical argument. These things can be modeled with game theory (cite: The Dictator's Handbook).
There are opinions and philosophies about evolution, vaccines, and lots of other things, but at the end of the day, those can be resolved through rational discourse.
I'd like my government to look out for my interests. I'd like it to be competent and not corrupt. There are lots of ideas for how to get there, and I'm really not comfortable with the imperialism of democracy.
China had good ideas with civil service exams, which select for competence. Aristotle and Confucius had good ideas around moral philosophy of rulers. Marx had some nice ideas too. They didn't play out as well in practice as capitalist democracy, but that doesn't mean we should toss up our hands, give up, and quit trying. Especially now that we have tools for corrupting democracy like never before, and conversely, ways to model governance like never before.
That's a contrived example, but this kind of disagreement is very common in discussions about government and society. If you believe that individual choice is important and all humans are born with equal rights, and I believe that individual choice is unimportant and some humans are born superior to others, we are never going to agree on an ideal form of government. We can have full agreement on the facts and full disagreement on what we consider to be a "good" outcome.
You mentioned game theory, but you can't design one model that will satisfy one person who wants to maximize outputs for all players, one person who wants to weight players in different castes differently, and one person who wants to set a hard cap on all players because too much material comfort leads us away from God.
... it's almost as if Mohammed was an economist who foresaw all the economic problems of the 21st century, and built protections around them.
Peace be upon him. It's simply more evidence of his prophethood :)
(1) Right now, virtually everyone agrees that individual choice is important and all humans are born with equal rights
(2) If they don't, it's often possible to come up with solutions which work for everyone. The problem is when people jump to solutions ("democracy") rather than problem-statements and first principles.
The early US is a good examples of -- actually quite exactly -- your contrived example. The South had slavery. The North didn't. There was an overarching federal government which dealt with military and foreign diplomacy. It worked for a bit over a half-century until it didn't, mostly for reasons unrelated to why it worked as long as it did (the expansion of northern culture west upset the design, as it had an upper hand in congress).
My claim is that there are systems of government which do a better job of protecting individual choice and equal rights than capitalist democracy. My claim is that if you articulated your value system completely (probably not on a web forum but over an hour-long coffee), we could probably design a better one around your values, which also did better for most people's values. My claim is also that if you've signed an NDA, you probably don't have all that much individual liberty.
Money is a form of power, it is not equivalent to power.
Amazon is valued at $1.6T and this is a calculation that directly correlates to how much individual shares of Amazon. Shares can be sold for money, but this decreases the share of power the shareholder has by the exact amount of shares they sold to the buyer, which increases their shares and power over the company. The act of buying and selling shares affects the stock price which can increase or decrease the market valuation of Amazon.
If Amazon were a lone behemoth sitting on top of the stock market and second place wasn’t even close, I think you would have a stronger case.
Checking literally thirty seconds ago, Amazon isn’t sitting up there all by its lonesome, it is the bronze medal with Apple and Microsoft sitting above it, Apple up above the $2T barrier, and Google lagging pretty closely behind at 1.3T.
Now these market valuations will be a bit different tomorrow, or next week, or next month, but none of this is literal money in the bank. Money in the bank comes from the products and services these companies sell.
They are also both cooperators and competitors with each other and companies like Facebook ($761B), Walmart ($395B I think it was) and Adobe ($232B).
The power they can leverage from these assets is immense, but it is in competition with other motivated actors who are throwing more actual cash around.
If we do nothing, it is likely there will be more trillion dollar companies this decade than the ones we are discussing now, some of those will be in different market sectors altogether, and some of those will be competitors, and some of those will be semi-competitors.
Companies with far less cash than this already lobby for their interests in places like the Capitol, and the amount of money they’re using to successfully (and unsuccessfully) lobby is measured in the low millions, not the billions, and certainly not the trillions.
So what exactly is the problem that reducing the size of these companies valuation and theoretical power supposed to solve? How does this benefit society? Is society being harmed by Amazon at $1.7T or Apple at $2.2B? Is the problem their size or their practices?
Break this down. It’s easy to say “no company should be this size”, it’s a lot harder to say why, and I am not convinced yet. There’s plenty of people in the PRC with billions, and that hasn’t stopped the PRC from soliciting them for “voluntary” contributions, so maybe lots of money < lots of guns and a big Army in the overall economy of power.
If you want an easy to read modern political argument you can read Break Em' Up by Zephyr Teachout. If you want a more academic approach I would look up the syllabus of an antitrust course and read some court cases, but different syllabi will probably give you wildly different conclusions. Supreme Court cases from a couple decades apart will give you different conclusions. As I said earlier, there is no right answer, it's about balancing inherently conflicting rights and deciding where to draw the line.
Sure it is, if there is a good convincing case, you can in the space of a single comment at least get me to seriously question and re-evaluate my priors, check out your book recommendations, and I would do the rest from there whether I ended up agreeing or disagreeing in the end.
Let’s start with what is the impetus for action? Inaction is easy, it’s the default, but if my Representative (presently Pelosi) or US Senators or their eventual opponents and/or replacements trotted that line about how a company shouldn’t be able to get this big, out without an attempt at a good explanation as why we should cap the size of a corporation’s growth, I would throw them from the average politician column into the crazy column. Not just because they are taking that position, reasonable people can disagree, but because they would be seeking power on that position and they would be seeking an expansion of Federal power and action with that position without justification, without a limiting principle, frankly it looks arbitrary and capricious like an imaginary line that exists only in their mind that no company’s market valuation must ever cross without consequence.
The political will to power that led to the anti-trust legislation, prosecution and conviction wasn’t that the defendants were merely too big for their britches; it was their abuse of a market dominant position that it was argued harmed the public. Even today reasonable people can disagree on whether this was a justifiable course of action on the part of the government, but I am not here to re-litigate historical events.
Is the present position of Amazon and its close peers and the other >$100B companies as measured by their market valuations, not market share, not cash and other assets, but present market valuations, equivalent or like to the situations in the past where the government was willing and able to successfully pull the trigger of the antitrust gun? To reiterate, what is the impetus that we must act given the facts that we have about these contemporary corporations with such immensely high valuations?
1. Documented examples of Amazon knowingly using predatory pricing to put a competitor out of business, most famously with Diapers.com. Amazon saw them as a "#1 short term competitor", lowered their prices and took a loss so Diapers.com couldn't compete, and then raised prices again once they were able to acquire their competitor. https://twitter.com/HouseJudiciary/status/128855628101652070..., https://www.bloomberg.com/news/articles/2020-07-29/amazon-em..., https://www.ftc.gov/tips-advice/competition-guidance/guide-a..., https://academic.oup.com/antitrust/article-abstract/7/2/203/...
2. National "competition" that convinced hundreds of city and state governments to offer billions of dollars in subsidies that most economists agree are harmful to the places that offer them. You can blame this on incompetent governments if you want, but the incentive must have been pretty strong if so many of them fell for it. Maybe too strong?
3. Amazon controls its market and is also a participant, so it can promote its own products above competitors'. It can give its own stuff a bump in the search results, or give it a nice looking "Amazon's Choice" badge, or advertise it next to competition, whatever. Even the potential of abusing this power is a problem.
4. If Amazon were to ever abuse its position to harm a seller or employee, they cannot be sued: https://prospect.org/labor/biggest-abuser-forced-arbitration...
5. Amazon has enormous market share of online retail, but sees third party sellers as competition and often works against them. Many sellers simply do not have a realistic alternative, even if they don't like Amazon's terms. This is a news article with a lot of allegations that you may not immediately believe, but I think it can at least be considered an impetus for investigation: https://www.washingtonpost.com/technology/2019/10/01/amazon-...
6. Amazon Alexa has a nearly 70% market share in the US, an absurdly high number. Alexa is not a standalone product, it is deeply integrated into the Amazon ecosystem and is used to promote other business lines.
You can also search for Amazon in here for some better researched claims: https://judiciary.house.gov/uploadedfiles/competition_in_dig...
From the PR statement, you can see their growth hack:
> 1800Diapers also recently added a large selection of very popular diaper bags, also at low prices with free shipping. The Company actually guarantees the prices for its diaper bags are the cheapest on the Internet or it refunds the difference.
Price matching, which is not illegal.
So let’s take a look at the website from 2005:
https://web.archive.org/web/20050301022607/http://www.1800di...
The best unit price on that page is $0.16 for 8 to 15 lb babies, which after about 16 years of inflation, comes out to $0.21 today. Pampers Baby Dry. The exact same diapers are, at the time of this writing, have a unit price of $0.21 on Amazon. Getting a link from the Amazon app on my iPad where I’m typing this is amazingly unobvious, so here’s the item model # to search: 037000862215 <—————— posted this comment and I see my iPad thinks this is a phone number. I advise readers not to click on it should the option present itself.
The company, Quidsi, Inc. was eventually purchased by Amazon for $545M in 2010. It is not apparent that diaper buyers were harmed by this transaction. The price beats Walmart’s at least, yet Walmart continues to sell diapers, and you can find competitive prices at Costco, though you cannot find the same model. At worst, diapers are slightly more expensive today, and at best, this whole line of argument is a wash. Yes, Amazon took aggressive steps against a competitor, but was it an abuse of their market power? Mind this is when Amazon was far from the size they are today by any objective measure, and ultimately the shareholders of that competitor made out well for themselves. 1800Diapers was also measuring their prices against their competitors on the front page, March 2005, with an estimated 6% sales tax rate baked into the price of their competitors, and very prominently advertised the lack of sales tax. Amazon was their only major competitor for which such a tactic would not work so 1800Diapers price matched.
#2: The people I most hold responsible for cronyism are the government officials which participated and bent over backwards so that Amazon could try to get a discount on some New York and Northern Virginia real estate. Not to absolve Amazon, they hold responsibility for initiating it, but cronyism falls squarely on the soldiers of the officials willing to sellout their own tax base, and is arguably an abuse of their power.
#3: Correct. As does Safeway, Whole Foods prior (and after) to the Amazon acquisition, Lucky’s, Albertson’s (which owns Safeway, they might own Lucky’s too) and Costco. Amazon is a website you buy stuff, and some of that stuff is Amazon products, and some of that stuff is Amazon white-label products. There are other means of buying and selling on the internet, and we are starting to see the infrastructure for that develop now.
15 years ago Walmart was the 800 pound gorilla destroying retail. 30 years before that, Sears was untouchable. Clearly it is possible to have a competitive retail landscape even in the face of an enormously dominant competitor. The small businesses that can’t make it on Amazon are in a tough business, in 10 years many of them won’t be around, but other products and service providers will.
#4: There has been a lot of FUD around private arbitration; I have yet to see solid investigative reporting on it. The enabling law, not surprisingly from the 1920s when a lot of crap law was written, is the Federal Arbitration Act of 1926. The specific entity that Amazon uses is the American Arbitration Association, and only for claims that would not qualify for small claims court if their agreement is to be believed.
#5: The WaPo article is less scandalous than I thought it would be. 30-35% of dollars earned by 3rd parties goes back to Amazon, but a lot of it in additional spend on ads, which is basically priority placement like what you would see in any supermarket, and additional services. So it can be as high as 30-35%, but not every third-party seller is paying that much.
They also have additional options to sell in.
Retail is a tough life. You can pursue your own path and start a small business, but you’re not entitled to succeed in doing so. It sounds like for many small businesses, Amazon is an enabling technology that makes much of what they do possible, and maybe even profitable enough to continue doing so.
#6: 70% of the voice assistant market? I can believe that. I am not a fan of this entire product category, but Amazon moved early, it offered a compelling product and it is kicking ass in name ID, the quality of the assistant and price. They offered a compelling package, and people bought it. Other than being overly aggressive in invading the privacy of their customers who seem to both know and not care, is there a specific harm in Alexa dominating voice assistants in a world where a decent number of people are walking around with devices in their pockets that can respond to either Siri or Google Assistant?
I do appreciate the effort on your part, but I want you to see where I am coming from: it is easy to make bold claims based off nothing more than emotions and bad PR. Amazon has had a lot of PR, I won’t buy anything I can put in my body from them and I do the bulk of my shopping elsewhere for various reasons.
However it is a difficult proposition to simply look at big numbers, bad PR and come to the conclusion that this company is simply too big! How could it get this big?! How could we as a society allow this?
Turns out, it is mostly just that Amazon.com and many of their products and services actually are compelling. I remember when the iTunes Music Store was the only compelling game in town in its category, until the Amazon MP3 Store came in and easily took 20% of the market simply by being good and compelling on its own terms, and with a clear value proposition to potential customers. Now it is all about Spotify, Pandora, my beloved Rdio was gobbled up by Pandora and killed, Google has their own music service, Amazon has a subscription, and most people don’t seem to be buying music anymore. C’est la vie.
If you’re going to make the bold claims of this or that entity in a world where no one person or group of people seems to have all that much freestanding power anymore, put the legwork in, make a real case. Power is relative, and not always applicable, as in literally applicable in every circumstance depending on the type of power it is you are holding.
I will review the final link you sent at my leisure. For me, the hour is late. Good night, if you respond by morning, I will see it, but will likely be busy until evening. For what it is worth to you, I’ll even revisit my priors, but it’s going to be a tougher sell because your position used to be mine several years ago, but not so far long ago that I don’t remember.
That WaPo article is a good example of how I see things differently than you now. If you see a bunch of horrible claims levied against Amazon, I see a bunch of small business owners who have problems, some of them legitimate maybe, some of them not, but are a small fraction of the 2.5M 3rd party sellers the WaPo says are on Amazon making a living somehow. That’s a decent number of people doing what they do to really not have any other choice for making a living, and I’m sure I can round up a thousand of them to complain about Amazon shafting them if I tried. For reference, there’s about 2 million farms in America.
Basically, Amazon's "right to grow" or whatever is not important at all to me, and I don't see what harm is done by breaking them up. I guess a few executives and large shareholders might lose some money, but everybody keeps their jobs, their products will continue, it just feels as obvious to me as your position feels to you. Corporations don't have rights and are not innocent until proven guilty, there's no need to convict them of a crime. It's like city planning: if the community would be better served by removing a highway and putting in some dedicated bus lanes, you just take a vote and then do it, you don't have to wait until there's a 20 car pileup on the highway to take action.
First you argue against great concentrations of capital also being great concentrations of power, in this "yes, but no" sentence:
>Money is a form of power, it is not equivalent to power.
This sentence seems to mean absolutely nothing. "not equivalent to power" is some sort of vague semantic argument about what power "is", that is not interesting to the discussion.
Wealth _is_ power in the sense that you can use money to affect change in the world. Wealth is the simplest and most flexible form of power, because it can be directed at anyone or any organization, and transformed into other forms of power. And it even grows by itself!
You then talk about the market cap of Amazon. Why? The market cap, while also representing a sum of money, is not really relevant to the discussion. You even seem to realize this yourself, but you do not really explain the reason for bringing it up.
Are you trying to say that competition exists and therefore everything is good?
That would be fine if it weren't for the fact that the companies you mentioned do not compete in the same markets. They share some markets, e.g. AWS vs GCP, but you offer no evidence that this market is healthy.
Competition is key if you want a healthy market, as is aligning corporate goals with societal ones. You could even argue that competition for customer business is the main mechanism for achieving alignment.
If you allow any one business to get too much power, competition will weaken. Excessive power can come in the form of excessive capital concentration. It can also come in the form of other bargaining chips that come with excessive capital concentration, such as: control over resources used by direct competitors in a market, e.g. the marketplace itself; the ability to create jobs, politicians love jobs; the ability to invade a new market by subsidizing a new department with capital from elsewhere in the organization; or even an information asymmetry created by a huge data collection operation.
Amazon exhibits all these forms of power and more. Some of the other companies you mentioned exhibit these as well. It would be in the interest of society to break up monopolies and other concentrations of power that are actively impeding competition in the way that Amazon is.
These ideas aren't new, developed nations typically create institutions to maintain healthy competition. In the US, the federal trade comission and the DOJ are tasked with keeping competition healthy by enforcing antitrust law. They used to be a lot more active than they are now, e.g. when they broke up Bell. I wonder what has made them slip...
> You then talk about the market cap of Amazon. Why? The market cap, while also representing a sum of money, is not really relevant to the discussion. You even seem to realize this yourself, but you do not really explain the reason for bringing it up.
You’ve lost the thread. Let me help:
============
>>> I still remember when Amazon was only selling Books. People laughed, Media Laughed, and I guess most of us laughed.
>>>Amazon is now a ~$1.6 Trillion Dollar Company. What an era.
>> For comparison, using national total wealth, that makes Amazon worth more than Saudia Arabia, Denmark, Portugal, or New Zealand.
>> It's $280.5 billion in revenue in 2019 put it above the GDP of Romania, Peru, Ukraine, etc.
>> Corporations should never be allowed to get this large.
> Make your case instead of dropping your groupthink everywhere. Why? And: What is the maximum size a corporation should be allowed to grow? Who gives that permission now?
===================
> Amazon exhibits all these forms of power and more. Some of the other companies you mentioned exhibit these as well. It would be in the interest of society to break up monopolies and other concentrations of power that are actively impeding competition in the way that Amazon is.
Sure, they exhibit power, they use their power, but is it actually too much power? We can use any measure you like that isn’t market cap, now that we’ve re-established the thread and where that came in. Pick your measurements, and demonstrate how they show that Amazon is too powerful, not merely powerful.
> These ideas aren't new, developed nations typically create institutions to maintain healthy competition.
As a general rule, although not a hard rule, I don’t have nice things to say about the laws of other nations. Your task is much easier leaving them out of it.
(It is a big company, but I also appreciate being able to order on-demand compute, or getting like a hundred million things in under a day delivered to my door)
The consumer welfare principle post-dates anti-trust.
So unsurprisingly, American tech monopolies are usually middleman-monopolies that offer low (often free) prices while squeezing businesses on the other side. Facebook/Google sells the user as the product, while Amazon is GREAT for low prices, but not so great, and sometimes ruinous for the sellers.
Certainly if a corporation can grow to get so large, it's hard to argue against it. It becomes a bit like a force of nature in that sense. But there are possibly repercussions to that, just as there would be repercussions if a black hole were to suddenly appear in our solar system.
Elon is probabally the prime example of a crazy billionaire who dumps his wealth into wildly unprofitable ventures to get things done for the betterment of humanity.
Of course most billionaires end up like Larry Ellison, whose only drive seems to be increasing the size of his boat collection. He has every right to be doing his own thing, but it would be nice if there was a way to incentivize incredibly risky projects with a potential for significant public good.
As such, it's pretty clear that Amazon is providing tremendous value to society.
--Thomas Jefferson, 1812 [1]
When private power eclipses democratic power, you cease to have a democracy. You have a dominant aristocracy/oligopoly, which is not functionally different for 99% of the populace than a monarchy. Extremely large corporations are filled to the brim with powerful but incompetent people who got there through connections and political warfare instead of merit.
A corporation should be allowed to grow until the point where they own enough of the government to make their own rules and avoid paying taxes like the rest of us. As soon as they do that, they should be split across state lines so there is more democratic control over their behavior, and they are small enough to audit and tax accordingly.
[1] https://founders.archives.gov/documents/Jefferson/03-10-02-0...
The United States is without a King nor aristocrats who hold seats in a House of Lords by their birth; it is without a House of Lords!
What you advocate is anti-Jeffersonian in both its intent and nature, and therefore you are without just cause citing Jefferson.
So if you wish to break with Jefferson and make your own advocation, do so without citing the dead when you clearly have no business doing so, and put your own thoughts and words behind that arrow.
In what way are they like dictatorships by engaging in commercial activities and being worth a large sum of money based on what their shares are bought and sold at?
Bezos can hire people to do things for him, but clearly this has limits, he isn't sending hitmen after Amazon critics even if he could pay them $1 billion Amazon shares each.
> Corporations should never be allowed to get this large.
Or maybe we should convince a larger swath of humanity to unite behind an idea larger than "nationhood" or "my country".
It will always be a matter of "us vs them" it's just a matter of who is "us" or "them"
Also it can appear voluntary... "Sure you can pay 2x the cost for your insurance or you can get insurance, food, accommodation conveniently provided by Amazon who is also your employer for a good discount"
Not saying Amazon IS a monopoly. But a "nation corporation" would effectively be company scrip on a much larger scale I suspect
"Concealment at scale is the secret to Amazon’s success. Customers enjoy a seamless one-stop shop experience from the comfort of their homes. Out of sight is a ruthless game of regulatory arbitrage, as Amazon installs itself in low-tax jurisdictions and exploits legal loopholes around the world. Even further away from the customer lies Amazon’s environmental impact, scorching frontline communities in the global south while executives in Seattle roll out their latest greenwashed PR campaign."
https://www.theguardian.com/commentisfree/2020/dec/01/amazon...
And at a certain point it's consumerism that's driving all of this. I don't know if it's fair to blame Amazon for this any more than it is to blame McDonalds for obesity. We live in a society where people are free to make their own choices, and as long as these "hidden costs" aren't well regulated, a lot of people will take a cheeseburger at the cost of a few extra pounds, and some 2-day shipped plastic junk at the expense of some poor over-worked employee's vacation.
Meanwhile, these consumers are putting additional strain on the healthcare system, and encouraging companies like Amazon to get away with all of its labor abuses.
The US healthcare system, oil, gas and coal companies, weapons manufacturers, factory farms, fast fashion sellers, soft drink and dessert companies?
I mean, Amazon and MS are in ESG investing indexes, so they must be doing okay. Those indexes won't even allow nuclear power in.
From a legal/ideological standpoint, this might be a powerful soft-pivot that would solve a lot of problems.
There's a famous line from Walt Disney, during Disney's golden age, where he said "we don't make movies so we can make money - we make money, so we can make movies". That really hits at the heart of it.
The interesting thing is that, to a large degree, most of the meaningful corporations that improve the world - despite nominally being for-profit companies, generally tend to operate halfways into public-benefit territory. Partly because the benefit provided by them is essentially what the owners are "buying for themselves". To put it in perspective - if you're an extravagantly wealthy patron who wants to - themselves - have animated films to watch, you can't just hire some off-the-shelf people to do it, because they don't exist unless an industry to train them, exists. There's not really a "more narrowly selfish" way to do it - you're best served by building some outfit like Disney to build a brain trust of people to produce what you want.
Similarly with Amazon; sure, an extravagantly wealthy individual could probably accomplish the shipping part of it with personal couriers, but the information-gathering part of it where all the products-available-to-buy are laid in front of you as choices would be nearly impossible to match. Like, you could try to match it with some awful, personal, potemkin setup. But by the time you put in all of that effort ... I mean, you're basically already building what could be a business that could serve others, so you may as well.
So the best thing to do is to try to nudge the system in a direction where the worst tendencies are mitigated: build institutions in which non-sociopaths can thrive politically, and allow a reasonable path for outsiders to join the political process.
The US in particular is very bad at both. First past the post election systems don't provide a path for outsiders to join, which makes them seem stable until they suddenly become very volatile. And the fact that all elections in the US are personalized favours sociopathy over competence in politicians (compare the US system to one where you vote for a party instead of a person; in the former, people who are competent but lack charisma can still rise in the ranks of a party and get to power, while in the latter everything devolves to low-quality popularity contests).
I refuse to believe that is the only alternative.
In my country it is illegal not to subscribe to the state TV channel. The same cannot be said about Amazon Prime.
Just curious: 1) What country 2) Do you have to pay?
2) Yes
You might not like where your taxes go, but at least you can vote for that to change. In a company you have no such freedom unless you have the financial ability to buy stock.
a lot of European counties pay for state tv from a tax on things like electricity, but saying “it’s illegal not to pay tax” is an odd statement.
"Illegal not to subscribe to the state TV channel" seem like small fries.
The governments of Russia, Germany and China killed over a hundred million of their own people last century, no corporation comes anything near that.
Just because the companies doing the murder are more numerous and regularly go out of business, doesn’t mean that capitalism’s hands are free of blood.
This is, frankly, a very silly thing to get hung up on.
First of all, I assume you mean you have to make some payment that goes to that channel, not that you're forced to watch it.
Second, this means you're essentially passing a presumably small tax that is earmarked for that channel.
In other words, it's not any different from all the other taxes: paying them is part of life in society, and you're never going to agree with all their uses.
I bet there are far bigger items in your government's budget that you disagree with.
The British East India company was a corporation when it took over large parts of India.
Corporations are chartered by governments and reflect the chartering government’s values (which may be laissez-faire, but in the case of the British East India Company—and it's state-granted monopoly, violations of which were punishable by indefinite term of imprisonment—were decidedly not.)
Why?
Bonus question: Why should governments be allowed to get that big?
Good government is hard, but it's certainly better than a corporation that is legally obligated to put profit ahead of anything else.
There is no legal obligation to maximize shareholder value.
The shareholders want profit maximised, and with that end, decide upon the board of directors, who decide upon the CEO. If the CEO does not maximise profits, the CEO will not remain the CEO. Therefore, the CEOs of (publicly-traded) companies are obliged to maximise profits – those who do not feel such an obligation are not CEOs.
I do believe that there are people who claim that companies have that legal obligation, which is what you said you’d not observed.
And if you think it's bad now, it's going to get dramatically worse yet. The largest groups that make up the US today, that dominate its politics and culture, have absolutely nothing in common with eachother and will grow further apart as the years pass. The rancor will get much worse. The populism will get worse. The end result is obvious and unavoidable (and I'm not talking about civil war, that's a redneck fantasy; it's tyranny, oppression, endless strife, and ever worsening dysfunction as the Feds try to contain the unspooling and get ever more paranoid).
Like it or not, there's always going to be some powerful entity who you cannot escape because it rules the land. The only question is what shape you want that entity to have. Accountability matters, and so democracy is generally a good place to start.
Also "exhausts their budget every fiscal quarter and successfully demands more" applies just as much to corporate projects. And given we gov agencies rarely can solve the whole problem, why expect them not to exhaust their budget?
This may or may not include specified behaviors, tasks, growth, marketing, sales, profits, goods, services, employees, competitors, etc.
Even corporations without any shareholders are common, found in the non-profit sector, but you do need corporate officers regardless.
Would it be better if there were a couple non-profit corporations with one or two million employees each the size of Amazon or Wal-Mart, to go along with what we have now?
I don't know if this is true, but you'll only talk past each other if you don't acknowledge it.
Governments aren't defined by a market cap, but rather by the services they provide to their citizens.
Consider that a private company's only goal is to enrich its shareholders, and they have no responsibility to the people or places around them. They are only accountable to their shareholders and the government.
A governments responsibility is solely to its citizens who also control it by vote.
The bigger your biggest companies are, the more powerful your government must become to keep them in line - to ensure they don't break the rules. If you want a small government that is able to retain order and fairness, you must also limit the size of the companies within its purview.
The natural state of a company is a monopoly. Once you are a monopoly, you don't need to worry about getting "re-elected" any more than a despot does.
The free society exists only in the space between these two clashing titans.
Corporate monopolies usually only persist due to two reasons: regulatory barriers or technological stagnation. Both are solvable.
Why does the government needs to be big (in size?).
It just needs to be strong enough and really connected to its people it represents. Then also a very small country (with a small government) can set up and enforce clear rules on multinational companies, doing buisness within that country.
The rules just need to be simple. If they are complicated, it just means, those with the best lawers will win and they are usually working for the corporations.
With numbers come also internal struggles, that weaken the whole system.
Look at switzerland or norway for example. They are small in numbers, but don't get really screwed by big corporations either.
Roughly speaking they coordinate on all major rules and policies and practices with the entire rest of the EU and therefore are effectively part of the EU for regulatory and trade purposes.
The UK on the other hand, obviously just wrapped up its Seppuku process of leaving the EU, and we're already seeing the relative increase in their being taken advantage of by corporate interests due to their much weaker position.
Switzerland and Norway take advantage of the power of the EU to push back on corporate interests, and the UK is getting kicked around as its negotiating power just went down by a factor of 10.
[1] https://ec.europa.eu/trade/policy/countries-and-regions/coun...
[2] https://ec.europa.eu/trade/policy/countries-and-regions/coun...
Even in relatively liberal democracies, governments are clearly more beholden to forces other than citizens and their vote. There's a reason why US governments did little to respond to massive BLM protests this summer, as government viewed its responsibility as more aligned to police unions than citizens.
Without a government to enforce monopoly rules, it'll just aggregate all its competition into one big blob, and you won't have any choice. Efficiencies of scale mean there's a natural pressure towards consolidation. The terminal state is always one blob that owns everything.
Once they do, they can smash any new upstarts, by undercutting prices, or by just buying them too.
> A corporation generally doesn't shoot dissatisfied customers.
Sure does shoot dissatisfied union leaders though [1] and enslave children to farm cocoa [2], and take down a democratically elected government kickstarting a 36 year long civil war [3]. Also substantially all of the trans-atlantic slave trade [4, 5].
These things were all allowed to happen because the governments in those respective jurisdictions weren't (and in the case of child slave labor, aren't) strong enough to stop them.
The idea that "a corporation generally doesn't shoot dissatisfied [people]" is a privileged western position to take based on the current system working pretty well. In places that have weak government, your statement simply does not hold.
[1] https://prospect.org/features/coca-cola-killings
[2] https://www.washingtonpost.com/graphics/2019/business/hershe...
[3] https://www.umbc.edu/che/tahlessons/pdf/historylabs/Guatemal...
[4] https://www.britannica.com/topic/East-India-Company
[5] https://dutchreview.com/culture/history/voc-dutch-east-india...
Thats not really true. There are tons of industries out there that are highly competitive, and are not aggravating into a monopoly, and those industries are highly competitive without much action from the government.
Sure, there are some industries that have huge network effects, such as telecom, that have a tendency towards monopolies.
But such industries are not the rule. There are instead many industries where monopolies are not forming, competition is working on its own, without the government doing much to enforce that competition.
Are restaurants a monopoly? Obviously not.
Cars? There are lots of options for cars
grocery stores? There are certain some big players, but the 10 corner stores, target, safeway, and whole foods within 5 blocks of where I live show that it is not a monopoly. MAYBE you could argue geographic monopoly for grocery stores, in certain limited exceptions in a few small towns, but that is not the vast majority of people.
Housing? There are 10s (or Hundreds?) of millions of people own their own home, or rent it to others. Clearly That is pretty competitive
Lets now pick some random things that I see within eyesight of me.
What about refrigerators? There are multiple refrigerator companies.
Furniture? Probably a lot of companies make furniture.
What about shoes? Clothing? There are lots of clothing companies.
And before someone says it, yes I am sure that every example that I gave has some big players in the market.
But my main point is that I simply do not consider the existence of some big players in a market, to be anywhere even close to the same thing as a monopoly or similarly non-competitive market. There is a huge gap between those two things.
The only major exception to all of these examples, is some of the new tech companies that have significant network effects in winner take all markets. Sure, maybe there is an argument that Google is getting to the point where it almost has a monopoly on ads.
But, just looking around my room, and looking at the main things that I buy in my life, which is food, shelter, transportion, and clothing, it seems pretty clear that most of these things have lots of competition, even if there are some big players in these markets.
That is unless someone is going to make a silly argument that the only markets that could be considered "competitive" are ones in which there are 10 thousands small businesses of equal size or something.
The trend however is clear.
It's extra clear in a market like air travel. Just two decades ago the US domestic airline market was actually competitive until...
1. 2001 saw TWA fold into AA.
2. 2005 saw America West fold into US.
3. 2008 saw ATA fold into SouthWest.
4. 2008 saw Northwest fold into Delta.
4. 2009 saw Midwest fold into Frontier.
5. 2010 saw United fold into Continental to form "United".
6. 2010 saw AirTran fold into SouthWest.
7. 2013 saw US Airways (and by extension America West and TWA) fold into AA.
8. 2016 saw Virgin America fold into Alaska.
When the government is asleep at the wheel, consolidation happens. The only reason the Big 4 aren't the Big 3 is because of regulators.
Out of your identified markets, the trend towards consolidation is very clear - except where no meaningful economy of scale efficiencies can be realized (such as real estate, or taxis).
Cars, for instance, consolidated to such an extent that only 14 car companies control 54 brands [1]. Again the only reason there isn't more consolidation is because of regulators.
Fridges are another great example. The market has seen huge quantities of consolidation, and likely the only reason it has hasn't progressed further at this time is because of regulators. [2]
You're mistaking the system working for it not being there at all.
[1] https://www.visualcapitalist.com/14-companies-control-entire...
Sure, that is a market with large amounts of geographic network effects. I already said that markets with large network effects could have competition problems.
IE, with air travel, on any given route between two cities, there might only be 1 or two airlines servicing it. So yes, thats a problem.
Most things that people spend their money on do not have much network effects, so my original point stands.
> to such an extent that only 14 car companies control 54 brands
So not a winner take all market then? Got it. I already said that it would be ridiculous to claim that a market would need to have 10,000 companies of equal size, in order to be considered "competitive".
So yes, I consider the car market to be fairly competitive, and not one where you only have "no choice".
> Fridges are another great example.
You just posted a link that shows that there are a bunch of competitors, and that it is not a winner take all market.
So I stand by my point that neither cars nor fridges are in any way similar to something like internet service, where someone might only have 1 or 2 choices, or something like the Google ads business, where Google has a huge amount of power in the market that is no way comparable to the fairly competitive car market.
Cars went from 54 to 14 establishing clear directionality and benefit. It's not going from 14 to 1 only because of laws against further consolidation in the space. Regulators would simply deny their request to consolidate further. Stopping at 14 isn't some magical constant or some natural end state.
My point is that the natural direction in each of these markets is consolidation, then at a point it hits a dead stop. Why is consolidation only useful up to a certain threshold? It's not. Regulation steps in and keeps it competitive.
No, because these markets don't have some huge geographic network effect.
The markets are pretty different than something like home internet service.
The traditional example being that of water pipes, where there is zero benefit to laying the pipes twice to a house.
You should be able to see how a situation where laying the pipes twice to a house is pretty different than a situation where there absolutely could be benefits to another car company being created, to manufacture new cars.
> Regulation steps
I am not sure how you can claim with with a straight face, that anti-trust laws/regulation is being strongly enforced these days, and that this is the reason why most industries are not turning into monopolies.
Anti-trust law isn't really enforced even in obvious cases where it should be enforced these days , and yet I see a world where there is lots of new companies entering markets, and lots of competition, in most markets, despite regulators failing to enforce regulation in the exceptional and rare cases where it should be doing so.
It is quite clear that regulation is not stepping in, even in the obvious cases. So no, I do not believe that the non-existent enforcement of regulation is doing anything. Instead, we are living in a world that has lots of competition, despite the fact that the regulators aren't doing anything even in the blatant and exceptional cases where it should, such as in telecom/internet/app stores/ect.
As I said, my analysis applies to companies that have demonstrated economies of scale.
Mergers are rejected all the time, and further, you can't discount the mergers that weren't requested in the first place because of the regulators.
I would say in the US mergers tend to skate through, but in if that company operates in other jurisdictions they need approval from all global regulators, and the EU has no such objections to saying no.
You haven't posited a theory at all for why consolidation is good up to 14 players in the automotive space but 13 is just a bridge too far. It's not. There's external pressure. Competition is bad for companies because it reduces margin. Consolidation removes competition and improves margins. That's just fact. Companies don't care about capitalism, competition or free markets. They care about making more money.
I really would not consider the current situation to be one where regulators are doing strong enforcement of anti-trust law.
Regulators are really not doing much regulating right now, on the anti-trust and anti-competition front, and regulators not doing much regulating in these new markets where they definitely should be.
I am not sure how you could possibly look at the current state of some of these rare expectations of monopoly behaving companies, and claim that regulators are doing their job.
> I would say in the US mergers tend to skate through
Well then this concession is good enough to support my point.
> You haven't posited a theory at all for why consolidation
Well I don't need to. All I have to do is point to the existence of lots of markets that are competitive, and point out that regulators that aren't regulating. The reason doesn't matter as long as I point to the clearly true fact that regulators aren't doing much regulating in some of these markets.
But, one possible theory is that consolidation also reduce competition, and can cause companies to stagnate, and can reduce innovation in that market. You would have to argue that no startups ever could succeed in the face of "scale" (something that is clearly not true. Startups suceed all the time), if you are going to argue that scale is such an overwhelming advantage that inevitably causes every single company in that market to join together.
Also, different companies run differently, and this can give them advantages in some things, and disadvantages in others, allowing them to overcome scale problems, due to the advantage/disadvantage of merely being different. Heterogeneity in companies allows them to target niches and stay in the market.
So that already establishes the point.
I would really recommend that you become more informed on the issue of EU anti-trust enforcement. I just did a bunch of research myself.
Here is a source from quoting the EU president himself.
https://www.reuters.com/article/us-eu-competition-juncker/ju...
"Juncker said the Commission had only ever blocked 30 mergers and approved more than 6,000."
https://www.jonesday.com/en/insights/2020/06/eu-court-raises...
Source showing how weak EU anti-trust enforcement is
After doing more research, is clear that the EU is doing much less enforcement against merges than even I previously thought, and I am now going to claim that the EU regulators aren't doing much enforcement either.
Really I am quite surprised at how little the EU is doing, and should have looked that up much earlier, instead of taking your initial claim at face value.
Furthermore, I can only find a single example, in the history of EU anti-trust law, of the EU blocking a US merger. And that was in 2001 regarding a GE acquisition.
If there is only a single example, in the history of EU anti-trust law, of the EU blocking a EU merger, a whole 20 years ago, then it is pretty clear that the EU is not doing much enforcement against US mergers.
So my point stands. You concede that the US is not doing much enforcement of anti-trust law. And the fact that the EU has only ever been successful in doing so a single time, 20 years ago, means that the EU is pretty irrelevant to this conversation as well.
Again, the number of blocked vs approved isn't particularly relevant. What matters is also the number that weren't tabled in the first place, and obviously, the number of things that didn't happen is a particularly challenging set to count. Companies aren't fond of public failure, and so they'll try and suss out whether regulators would be amenable to a merger before making it public.
6,000 vs 30 is a meaningless metric, because 6,000 small companies merging into 3,000 small/midsize companies isn't relevant to this discussion as it doesn't do much to alter the competitive landscape. 30 mega-caps merging into 15 giga-caps is what I'm talking about.
I'm not saying companies should never merge, that's fine, it's in their competitive interest to do so. Mergers are good for companies because they reduce competition and improve margins.
Again, what you haven't explained is why a small company merging into a small company is advantageous, a mid size into a midsize is advantageous, but a giant into a giant just wouldn't ever work. Of course it would work, the same dynamic continues to exist. Regulators are why.
T-Mobile just acquired Sprint, right? So we know there's certainly an advantage on the business front to consolidate these businesses. So why doesn't AT&T buy T-Mobile to form AT&T&T? Well, they tried in the early 2010s and the DOJ filed suit is why. [1] Further AT&T had to pay a huge amount of cash to T-Mo when it all unwound.
[1] https://som.yale.edu/sites/default/files/ATT%20-%20T-Mobile%...
Even if you think that, the metric of only a single american merger ever being prevented, and it happening 20 years ago, is still pretty relevant.
If the regulators in Europe have only blocked a single merger in America, ever, then European regulators are simply not relevant to the conversation, and you have already conceded that American regulators aren't doing much.
You cannot handwave away the true fact that the EU has only stopped a single American merger, one time, 20 years ago. And that this is pretty good evidence that European regulators are not doing much to prevent American mergers.
> T-Mobile just acquired Sprint
Huh. And I guess European regulators didn't do anything about that, did they? In the clear and obvious cases of geographic network effects in the industry of Telecom, which I have already stated is one of the few exceptions where regulation is definitely needed (Telecom, has huge geographic network effects. It is the same problem as internet, or electricity, or water pipes, and I have already said that network effects are the one major area that consolidation will definitely happen), we see that European regulators didn't stop such a clear an obvious thing that should have been stopped.
> 6,000 small companies merging
Well, in one of the cases of large telecoms companies, such as t-mobile/sprint we see that it wasn't blocked!
> so they'll try and suss out whether regulators would be amenable to a merger before making it public.
Well they didn't stop the clear and obvious example that you just brought up regarindg T-Mobile/sprint. Looks like European regulators are doing much of anything.
So no, European regulators are not doing much of anything at all, to prevent American companies from merging, using an example that you brought up.
> Well, they tried in the early 2010s and the DOJ filed suit is why
As I said, before, businesses that have huge geographic network effects are one of the few exceptions where there is a huge advantage to consolidation. But even IN these clear and extremely obvious cases, only sometimes will regulators take action. But sometimes they won't either.
The fact that nobody blocked the t-mobile/sprint situation is clear evidence that regulators aren't doing much to stop mergers, even in the rare and obvious cases where they should step in.
If they failed to stop such an obvious case, then is strong evidence that they aren't doing anything.
But whatever. Going to move on from this thread because it is clear that you know that this example is a clear cut example of how the EU isn't doing much to regulate anything, which is why you completely ignored it.
The complete dodge on that shows that you understand how much it disproves your point, and shows that the EU isn't doing much, which is why you completely ignored it.
So that dodge is good enough evidence for me, to show me that you understand this.
All we know is there is clear pressure in industry to consolidate, that at some point they stop, and that regulations to preclude further consolidation exist.
Someone has to have a monopoly on violence or you're going to have a bad time.
Meeting customer demands is only one way to compete. A better facebook is going to still have a hell of a time not being out-competed by facebook. Likewise with amazon sometimes throwing its weight around to take a loss to undercut competitors until they starve.
And most Western governments are now abdicating this responsibility in the name of political ideals and the stated notion that non-citizens have the right to demand a place in the nation of their choosing.
Nobody is doing that. However, I'd suggest that even if they were, it wouldn't invalidate anything I'm saying.
Non-citizens are permitted to immigrate under various circumstances, defined under naturalization law. Sometimes that's on the basis of being refugees. Sometimes its on the basis of skills and needs. Sometimes its granted in the face of exigent circumstances.
In the case of the DREAMers, it's based on the notion that if you're brought into the country as a toddler, then you didn't intentionally commit a crime and the fair thing to do is to let you remain - in no small part due to the huge role these folks play in the economy. The parents who committed those crimes are not granted any sort of amensty.
Private companies' only effective means to do anything are to produce a product that people freely choose to buy and attract people to work for them (absent a few rare exceptions).
Governments have effectively unlimited means to compel people. They can spy on anyone, fine them, throw them in jail, kill them, all for as much and as long as they feel like.
> National net wealth, also known as national net worth, is the total sum of the value of a nation's assets minus its liabilities. It refers to the total value of net wealth possessed by the citizens of a nation at a set point in time.
Given that multi-national corporations exist, it seems obvious that companies will have greater wealth than nations.
That doesn't follow because every non-totalitarian country has multiple corporations operating in it, in most countries a much larger number than the maximum number of countries a corporation could possibly operate in.
I would argue that most of our current problems are happening because our governments are small, ineffective, and corrupt. I would prefer big, effective, smart, and transparent governments that can take decisive action any day of the week. I'd go so far as to abolish state governments entirely and split their powers between counties and the federal government; they were made for a time when our communications were limited by the speeds of our fastest horses.
Personally I'm a 'taxation makes civilization possible' man myself, and I find that the 'taxation is theft' people rarely make meaningful contributions to society.
I tell you what, though. You design an effective, smart and transparent government and I'll never say a word about how big you would like it to be.
How do we define 'far away'? I can have a face to face conversation with someone at the opposite end of the country with near-zero effort.
> with so little in common with ourselves and our way of lives.
I strongly disagree with this. Partisan politics try to paint people from different regions of the US as being wildly different, and I flatly reject this notion. I've lived in urban, rural, and in areas separated by thousands of miles. Americans are far more alike than different. There are the same (minor) cultural differences within the average state as between states on opposite ends of the country.
> I tell you what, though. You design an effective, smart and transparent government and I'll never say a word about how big you would like it to be.
I don't have all the answers, but I would start by outlawing the bribery of public officials via campaign donations, and I'd put the legislative process in version control.
Corporations exist to enrich shareholders and nothing more.
Now that both corporations and government are so big and intrusive that they're somewhere between a nuisance and prohibitive toward small-scale enterprise, we should at least think about ways to sic them on each other.
Ok, I'll bite. Why? It's not like there's some natural law against it, so you need to provide an argument for why you think they shouldn't.
Think of it like a pool pump that has sprung a leak. It keeps sucking in but not pupping out into the pool, Amazon is amassing this money by NOT spending it on the economy. Eventually your pool will be stuck at the lowest line of the pump inlet.
In short we get more or work less and the overall quality of life for everyone increases.
Quite incorrect on this point, Amazon has pretty small cash reserves compared to peer tech companies. Even then, if Amazon were merely putting that money in the bank, where is it going? It's getting loaned out to other companies and consumers, who are spending it, investing it, etc via fractional reserve banking.
as the sibling comment notes, amazon is not amassing money. rather, amazon has amassed value.
you might want to familiarize yourself with what a corporate valuation is, and means.
What's the value of 1 million shares of Amazon stock? If every single share of Amazon stock went on the market today, would it be worth share price * number of units? Hell no.
This is partly why I left Google.
Countries either. Why did we allow it?
You know, I’m saying things without substantiating them. No offense, but anti-Corp is cool these days. Virtue signaling without thinking on one’s own.