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Why Is the Left so Worried about Amazon’s Growing Empire?

By: Guest Contributor - Jun 30, 2017, 2:32 pm
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It’s a pretty bleak vision of the future: a world where all commerce is controlled by Jeff Bezos, the CEO of Amazon.com, and Prime memberships are required to gain access to basic necessities. (Imgur)

By Logan Albright

With the announcement that Amazon.com is purchasing Whole Foods for $13.7 billion, a certain strain of the anti-business Left went into panic mode. It’s the same concern you see every time two large companies merge, amplified by the fact that Whole Foods happens to be particularly popular among people skeptical of corporate power.

It’s a pretty bleak vision of the future: a world where all commerce is controlled by Jeff Bezos, the CEO of Amazon.com, and Prime memberships are required to gain access to basic necessities. As Slate Magazine apocalyptically warns, “Jeff Bezos wants to take over the world.” How can we be free when even our food supply is controlled by the Amazon empire?

Give People What They Want, or Fail

Of course, all these fears are terribly dramatic and overblown, falling into the classic error that confuses corporate power with government power. While governments can use police and military forces to compel people to behave in a certain way, the only power corporations have in a free market is to offer to buy and sell goods. No one is obliged to do business with them, and they depend entirely on keeping their customers happy.

Businesses are not successful because they lie, cheat, and steal their way to the top. They are successful because they provide goods and services customers want, at prices they are willing to pay. Amazon isn’t successful because Bezos is an evil genius, but because it provides a wealth of easily searchable products, at reasonable prices, with great customer service, delivered in a matter of hours to your home.

Think about how amazing that is. It’s a business model that would have been unthinkable a generation ago. There’s nothing sinister about vastly improving the shopping experience for people all over the world.

Likewise, Whole Foods achieved its status by providing an exceptional service unavailable anywhere else. People wanted fresh, high-quality groceries in a pleasant shopping environment, and John Mackey, the founder of Whole Foods, gave it to them. Why should anyone complain about that?

When the two companies become one, one of two things will happen: either they will remain much as they are now, providing the same quality services and keeping customers happy, or they will change. Any change incurs a risk. If the quality of Whole Foods is compromised, customers will leave in favor of competitors like Trader Joe’s or Fresh Market. In short, if Bezos isn’t a good steward of his purchase, he will not be able to profit from it.

Single Providers

But what about monopoly? Isn’t Amazon dangerously close to capturing the whole of e-commerce? And won’t the Whole Foods purchase further consolidate their power?

Maybe. But it’s important to remember that, these days, there are different understandings of what constitutes a monopoly. Most of us instinctively bristle at the idea of monopoly because we know competition is good. In the real world, however, monopoly usually comes from government actions that prevent competition.

What about when there is only one provider? In a free market, there is usually one company that’s best at satisfying the demands of consumers at the lowest price. There aren’t any legal barriers preventing competitors from entering the market, but customers are so satisfied with their current options that they feel no need to defect. Still, thanks to the open market, such seeming monopolies cannot be sustained indefinitely.

As technology advances and people figure out new ways of doing things, older business models yield to newer ones. The corporate giants of yesterday become bloated and bureaucratic, unable to outpace the nimbleness of hungry startups. Single players that dominate a sector of economic life are inherently fragile, toppling as soon as someone else finds a better way to please customers.

This is why the nightmare of a single corporation running everything is so unrealistic. The second a company starts doing things its customers don’t like, there will be an opening for competitors. A company can never be tyrannical because customers can always leave, and as the revenue dries up, so does the power.

This is not just a theoretical construct. History teaches us that the only examples of durable monopolies are either heavily supported by governments, or governments themselves. It could be argued that the Sears-Roebuck catalogue, a sort of 19th-century equivalent to Amazon.com in which families could buy almost anything they needed from the comfort of their own homes, represented an analogous threat of monopoly. One could easily have imagined a world in which the catalogue continued to expand until there was no room for other sellers of any type of good, just as people imagine Amazon might do today.

But where is Sears-Roebuck now? The company stopped issuing the catalogue in 1993, but it had become largely irrelevant decades earlier, thanks to modern developments in retail. The threat of monopoly was illusory, failing to account for a world that is always changing and developing.

The truth is that Amazon.com doesn’t control us, we control it. We will use it to satisfy our wants and needs until it fails us, and then we will cast it aside in favor of something newer, shinier, and better. Then Bezos’ empire will fade into history, just like Sears, Standard Oil, and Gimbels. Instead of fearing Amazon and Whole Foods, we should rejoice in all the ways they have improved our lives and take advantage of them while we can before they are replaced by something better.

Logan Albright is the Director of Research at Free the People. Logan was the Senior Research Analyst at FreedomWorks, and was responsible for producing a wide variety of written content, research for staff media appearances, and scripts for video production. Logan also managed the research and interviews with congressional candidates used for endorsements by FreedomWorks PAC. He received his Master’s degree in economics from Georgia State University in 2011, before promptly setting out for DC to fight for liberty. This article was originally published on FEE.org. Read the original article.