Is Amazon Evil? Here’s How to Decide
Jeff Bezos, founder and CEO of Amazon, stands atop a supply truck during a photo opportunity at a shopping mall in the southern Indian city of Bangalore in September. (Abhishek N. Chinnappa/Reuters)
It seems like only yesterday that Amazon founder Jeff Bezos enjoyed a heroic-genius coronation on 60 Minutes, in a segment that reduced Charlie Rose to a puddle of all-agog admiration.
In fact that was last December. Since then, let’s just say the conversation about Amazon has changed.
By this past May, the online retailer’s disputes with publishing firm Hachette fueled a wave of complaints about the company’s “scorched-earth,” “ruthless” behavior.
It started when the company was accused of charging higher prices for Hachette books, and minimizing their presence in recommendation results, as a tactic to (allegedly) extract more favorable financial terms from the publisher. (The core issues include how ebooks are priced, and how revenue is divided among Amazon, Hachette, and its authors — and the essential charge was that Amazon would disadvantage all Hachette titles until it got its way.)
This war of words lingered through the summer. Stephen Colbert (a Hachette author) wagged his finger at the retailer. By September, literary titans like author Philip Roth were slamming Amazon — and Amazon defenders were complaining that the company was being unfairly demonized in the press.
Most recently, the liberal-ish magazine The New Republic upped the ante by declaring on its cover that “Amazon Must Be Stopped.” This promptly ignited a full-on debate about the company:
Is it evil? Is it virtuous? Is it some of each? From online magazines to the editorial pages of The New York Times, every possible answer to these questions has been offered, argued, rebuked, and offered again.
So what does all this mean to the rest of us? Should Amazon customers (which is a lot of us) feel shame for shopping at an evil retail empire? Or should we feel grateful for being able to take advantage of this futuristic tool that delivers low prices, convenience, and all-in-all savvy consumption?
I won’t tell you what to think. But I can tell you what you need to know to decide.
The case for the prosecution
That New Republic piece, written by the magazine’s editor, Franklin Foer, kicks off by declaring Amazon to be a monopoly. Not an old-school monopoly like Standard Oil that cornered a market in order to raise prices, but a 21st century version of the idea — “the shining representative of a new golden age of monopoly that also includes Google and Walmart.”
(This emphasis on the “monopoly” notion may have been a rhetorical misstep: As we’ll see below, the pro-Amazon crowd pokes many holes in it.)
A screenshot from The New Republic’s cover story, “Amazon Must Be Stopped.”
But let’s set aside the debate over whether Amazon is a “monopoly” and try to extract Foer’s deeper point. A hundred years ago, he argues, judicial and legislative thinkers seeking to rein in mega-businesses were largely concerned with the effect these entities had on other businesses.
Pointing to the efforts of crusading lawyer and eventual Supreme Court Justice Louis Brandeis, Foer writes: “If this campaign forced consumers to pay slightly higher prices, Brandeis didn’t mind one bit. In an essay he wrote for Harper’s Weekly in 1913, he excoriated the consumer who cared only about short-term prices.”
Later, of course, the interests of “the consumer” shifted to front and center — and low prices are a big one. Thus Amazon’s apparent ability to deliver bargains seems like a great thing. But (the argument for the prosecution goes) this virtue conceals a multitude of sins: The low-price benefit to consumers can happen only by way of unfairly squeezing suppliers (such as Hachette and its authors) and, as others have emphasized, its workers.
Addressing the Amazon imbroglio recently, New York Times columnist Paul Krugman busted out a new vocabulary builder: Amazon is behaving less like a monopolist, he argued, than a “monopsonist, a dominant buyer with the power to push prices down.”
This is a bad thing. Krugman was making an argument that Amazon’s ability, and evident willingness, to thwart the circulation of ideas in the course of battling a specific publisher (by making Hachette titles more inconvenient to buy) is the most prominent example.
“Don’t tell me that Amazon is giving consumers what they want, or that it has earned its position,” he wrote. “What matters is whether it has too much power, and is abusing that power. Well, it does, and it is.”
The case for the defense
As noted above, those skeptical of the anti-Amazon argument have largely seized on the “monopolist” charge. Sure, they tend to admit, Amazon is a dominant force in book selling.
“But this is cherry-picking,” as Annie Lowrey of New York Magazine puts it: In the broader retail and online context, the company faces a host of formidable competitors. All the skeptics make this point. That, in fact, is why the company “is not really profitable,” another critic points out.
A response to Foer’s essay, by Annie Lowrey.
Any call, then, to change Amazon’s behavior through antitrust laws that exist to curb monopolies is a nonstarter: The facts simply don’t back up the allegation. “The truth is that American antitrust law is simply not very concerned with the fate of competitors,” Joe Nocera observed in The Times recently. “What it cares about is whether harm is being done to consumers.”
Moreover, Nocera contends, even in the realm of books, Amazon has won its dominant place “fair and square.” As a writer, he concedes, he roots for Hachette and its authors in their dispute with the retailer. But as a consumer, he’s unmoved by calls for forcing the firm to change its ways: “To say that Amazon has to be stopped because it is giving people what they want is to misunderstand the nature of capitalism.”
Your decision
The skeptics are almost certainly right about the difficulty of — and questionable intellectual justification for — any antitrust assault on Amazon.
But maybe the more relevant point lurking in the case for the defense is how frequently it includes a passing admission that Amazon is, as one puts it, a “shitty, vicious competitor.”
Well, OK! Then maybe the real issue isn’t parsing the law to debunk some magazine’s supposed case about the “monopoly” charge. Maybe the real issue is this: Should I — should you, should we — be supporting this “vicious competitor” with our spending power?
This, too, is part of the “nature of capitalism”: We sort things out in the marketplace.
So maybe being a good consumer means no more than pursuing the holy grail of low prices and convenience, period. But maybe it means something broader: Maybe the good consumer’s self-interest encompasses more than just grasping at the cheapest and easiest (legally defensible) option. Maybe it means choosing options that pay off in more broadly social ways — rewarding economic contributors like workers and producers — and punishing those that don’t.
At the very least, Amazon’s critics are doing us all a favor by forcing this debate into the mainstream — and creating a nagging sense that this is an issue we, as individuals, need to grapple with.
The future behavior of Amazon.com probably has little to do with antitrust laws. It has to do, instead, with what makes you and me click the “Buy Now” button — or not.
Even in the realm of books, consumers have other choices. So if you’re comfortable with the way Amazon does business, click away. If not, you have plenty of options. That’s the blessing of a robust marketplace — and the burden of it, too.
Write to me at rwalkeryn@yahoo.com or find me on Twitter, @notrobwalker. RSS lover? Paste this URL into your reader of choice: https://www.yahoo.com/tech/author/rob-walker/rss.
