Amazon is a Monopoly

[Paul in Saudi]

Amazon is a monopoly, or the word has no meaning at all. It sells 40% of the books in the US. It and Wal*Mart sets the prices producers must meet in movies, music and other product lines. They drive down prices and so wages. They mistreat workers. They doge taxes. They bust unions. They hurt local business and so local economies. They use predatory pricing to destroy competitors. Amazon will make paupers of us all.

Amazon must be broken up. Discuss.

 

[Hygro]

Amazon is a monopoly, or the word has no meaning at all. It sells 40% of the books in the US. It and Wal*Mart sets the prices producers must meet in movies, music and other product lines. They drive down prices and so wages. They mistreat workers. They doge taxes. They bust unions. They hurt local business and so local economies. They use predatory pricing to destroy competitors. Amazon will make paupers of us all.

Amazon must be broken up. Discuss.

Wait, Amazon has to be broken up because they keep prices down? That's defying the conventional problem of a monopoly.


edit: I agree what you're saying is a problem, but you have to treat the source, not the symptom. If you treat this symptom you will only be hurting people in other ways.

If you want to fix the problem, cut taxes a lot on the bottom 95%, raise taxes, not even by much, on the top 0.5%, and then increase spending on the bottom until we get bit of inflation, and then keep raising interest rates to hold the inflation steady while you keep spending on useful stuff. This will give you room to cut interest rates rather than change spending to deal with shocks in the economy, like we could in the 90s.

People will have so much more money in their pockets they won't need to worry about saving every damn penny that they'll actually go into a bookstore.

The entire problem is 35 years of an austerity economy. Monetary/fiscal tightness has caused a deep consumer need for cheaper prices, obtained only by Wal-Marting the country. We could have had a big-box system running the show years ago but people just didn't need it. Relative to the amount of stuff to buy, once upon a time money was plentiful. Now money is scarce.

 

[Tahuti]

They doge taxes.

Such taxes!

Amazon must be broken up. Discuss.

Amazon is the tip of the iceberg. As Hygro said, it is treating the symptoms. Though my solution would be different: Break up the banks instead. And increase reserve ratios annually with by the percentage of GDP increase.

 

[Hygro]

Yeah but you want us all to be yeomen

I want us all to be free and dirty capitalists with robots doing all the work.

 

[Tahuti]

Yeah but you want us all to be yeomen

I want us all to be free and dirty capitalists with robots doing all the work.

I don't think robots doing all the work makes us more free.

 

[Paul in Saudi]

Actually, prices being driven ever-lower is a social evil and one of the curses of a monopoly. Lower and lower prices drive down wages. Further, selling below cost is a means of destroying competitors. This is why some products have legal minimum prices.

A monopoly may lower prices today, but this puts them in a position to raise them unilaterally tomorrow.

 

[GenMarshall]

Are you sure you're not mixing up oligopoly with monopoly? Amazon doesn't come near a monopoly.

Lowering prices is not an evil.

 

[Paul in Saudi]

Lowering prices to below the cost of production (as Amazon did to capture the mail-order diaper market) is wrong. It destroys innovation, allowing only existing players to sell.

 

[Hygro]

Actually, prices being driven ever-lower is a social evil and one of the curses of a monopoly. Lower and lower prices drive down wages. Further, selling below cost is a means of destroying competitors. This is why some products have legal minimum prices.

A monopoly may lower prices today, but this puts them in a position to raise them unilaterally tomorrow.

They're not going to unilaterally raise prices tomorrow, but as you are saying, that's not the real problem. The real problem is in the wages part.

But the problem is not that Amazon is driving down wages, the problem is that wages are being driven down by market forces and amazon profits from that trend by participating in it while giving consumers affordable prices. Amazon has benefitted me more than its hurt me by a mile. But the trend that made Amazon a necessity to my shopping experience hurts me and everyone more than Amazon can make up for that trend.

See what I'm saying?

The system rewards firms that empower the system. Right now the system is Reaganomics. Neoliberalism. Schumpetarian Workfare Postnational Regime. Late Capitalism. Supercapitalism. I don't care what you call it, it's a thing. Amazon gives us a much needed way to get what we want in this constricting, tight-money system. It basically allows the system to bargain with us the people in a way conventional bookstores (and now everything else) could not.

It would be mutually beneficial except the current system is parasitic, so it's rewarding us (good) and the system (bad). But to kill Amazon is to kill the middleman and the system would only hurt worse.

The solution is to change the system. My plan would work. It's not even much of a structural change.


edit: should be noted when I say "market forces" I mostly mean political power structures and laws combined with economic logic.

 

[Bamspeedy]

They dodge taxes.

Then you must really hate that American company GE.

regarding the other stuff:

I see businesses booming around the wal-marts, and the 'main street' businesses miles away are the ones dying (this didn't start with walmart's, but with shopping malls, and the 'middle of the city' stores had less parking space and more traffic congestion to deal with, among other reasons).

Do you really think Walmart paid higher wages than the mom n pop shops did? The mom n pop shops I'm sure break more labor laws than walmart ever did, it's just when some small shop does it nobody outside that local area cares about it.

An article posted in another thread a few months ago about working in Amazon's warehouse: If everything in the story is true, it's far worse than walmart. Some of it is similar, some was similar at one time, and some things are just industry standards, and has been for decades so the article looks like it was written by someone who never worked in a warehouse before or was deceptively written for sensationalism (typical for a journalist I guess).

 

[Tahuti]

Lowering prices to below the cost of production (as Amazon did to capture the mail-order diaper market) is wrong. It destroys innovation, allowing only existing players to sell.

Except that in practice, this never happens. At best, it buys time. Because it costs money, and cannot indefinitely be sustained, which would be a must if it is to be worth it. Eventually, companies that do this go bust or are forced to stop regardless. After all, for-profit companies are not interested in market share, but in profits.

 

[Paul in Saudi]

Amazon paid $300M to take over the diapers-by-mail business. Amazon, famously, does not pay dividends, it "reinvests in the business." Someday it may run out of money and have to revert to fair pricing, or perhaps someday it will own everything and everybody. It is sort of a race to see which happens.

 

[bhsup]

How can you call it a monopoly and in the very same OP mention another company AND the fact that it only sells 40% of all books? 40% is hardly a monopoly. In fact, I dare are Standard Oil would laugh heartily and then sneer a bit at Amazon if they tried to call themselves a monopoly.

 

[Tahuti]

Strictly speaking, monopolies are government-made as in 'you have the only right to sell stuff'. But if we move towards the casual definition of monopolies to include a very large market share (say 80%), one will notice monopolies or at least oligopolies - instead of competition - were the norm. Like before the 20th century, people seldom left a town casually, so the town's local pharmacist had like a market share of 100% in that town, idem dito for the groceries store, and everything else. This went pretty okay, since social pressure was used to keep the quality and pries decent.

Anway, I never bought anything from Amazon, and I think governments should tax Amazon into oblivion.

 

[luiz]

Amazon is an online business. They have no control over a finite natural resource, no government-granted privileges, nothing that could possibly make them a monopoly.

The notion that they could consistently undercut prices is ludicrous. Are you suggesting they have been operating at a loss since they opened - oh wait, we actually check that, and they have indeed made money.

So what exactly is the problem here? What are they doing wrong?

 

[Paul in Saudi]

They are using their size to suppress competition and innovation.

 

[Borachio]

I've bought a lot of stuff through Amazon.

It does seem to dodge (I do like "doge", very venetian!) paying tax, though.

£4.2 million tax on sales worth £4.3 billion doesn't seem to be a very moral approach. 0.1%? Hmm. Though apparently totally legal

There's a neat thing (as in an outrageous scam) it does by making out that the goods (or at least the payment) are coming via a transit thingy in Luxembourg. (If you see "Amazon EU S.a.r.L" on your bill, that's what they're doing.)

Yet any retailer in the UK could easily do the same. Even supermarkets could do this at their check-outs. I wonder why they don't.

 

[Tahuti]

I do like "doge", very venetian!

'Doge' just sounds very, doge. Such doge!

Spoiler :

Yet any retailer in the UK could easily do the same. Even supermarkets could do this at their check-outs. I wonder why they don't.

They aren't online, that's the thing. I support an Amazon tax to help the Brick-and-Mortar stores be kept on equal footing with Amazon. As it stands now, Amazon has way to many privileges.

 

[Borachio]

Supermarket payments - if you pay by debit or credit card - are equally on-line though. And if you order your goods on-line, supermarkets are directly comparable with Amazon.

I can't see why they don't take a similar advantage.

 

[Tahuti]

Supermarket payments - if you pay by debit or credit card - are equally on-line though. And if you order your goods on-line, supermarkets are directly comparable with Amazon.

I can't see why they don't take a similar advantage.

It's too easily traceable by the government because the offline element is too strong. In the Netherlands (and pretty much any other WE and NA country I wager) the debit card automata industry is very tightly regulated probably with the goal of eliminating the possibilities for tax evasion.