Tag: Amazon

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Accountability free trade & free markets insider corruption moral hazard national politics & policies porkbarrel politics responsibility too much government

Cry Me an Amazon

cronyism, Amazon, taxpayers, black hole

My idea of a “free market” is not our politicians’. Their idea is to give away free stuff to their new and old business buddies . . . at everyone else’s expense.

That sort of “crony capitalism” has been writ large per Amazon’s search for a location for a second headquarters (HQ2). The world’s biggest retailer — valued higher on the market than all other major retailers combined — announced it would spend $5 billion and bestow 50,000 new jobs on HQ2’s locale. Subsequently, 238 cities, states and provinces in the U.S., Canada, and Mexico offered to take from their current citizenry to give unfairly to Amazon.

Chicago’s proposal would allow Amazon to keep the income taxes their employees pay. Seriously. This “personal income-tax diversion” would add up to over a billion dollars for the company.

New Jersey state government offered a cool $7 billion in subsidies should Amazon choose to locate in Newark.

Seattle Times columnist Danny Westneat described this sorry spectacle of subsidy as not so much a corporate “takeover” as a government “surrender.”

The most egregious example, though, has to be Fresno, California, where the city “promises to funnel 85 percent of all taxes and fees generated by Amazon into a special fund. . . . overseen by a board, half made up of Amazon officers . . . supposed to spend the money on housing, roads and parks in and around Amazon.”

“Rather than the money disappearing into a civic black hole,” explained Larry Westurland, Fresno’s economic development director, “Amazon would have a say on where it would go.”

Selling out the taxpayers? Moolah in the millions. Referring to a normal city budget as a “black hole”? Priceless.

This is Common Sense. I’m Paul Jacob.

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crime and punishment folly free trade & free markets general freedom nannyism national politics & policies responsibility too much government

Serving Consumers? Punish!

Amazon, monopoly, trusts, antitrust, trade, free trade, big business, economic myths

New media ballyhooer Douglas Rushkoff made waves this week. Citing an un-named friend who went hysterical about Amazon.com’s purchase of Whole Foods, he asserted that such “unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force.”*

The company has “surely,” he claimed, “reached too far.”

Apparently, serving customers exceptionally well is bad for business.

Yes, he almost totally ignored the pro-consumer benefits of Amazon. Had to — his case makes no sense when you factor in us consumers. He focused, instead, on Amazon’s success in terms of its recent “online and offline retail sales growth” and its control of 40 percent of cloud storage and streaming services.

He went on to spin a bizarre fantasy about how disruptive bigness is in business. His economically illiterate farrago reminds me of the sad case made against pre-antitrust Standard Oil, a company which, during the whole time of its growth prior to break-up, kept on producing more fuel at ever-decreasing prices.** Broken up because of . . . fears about how businesses change. And of bigness itself.

As long as consumers are being served, this reaction strikes me as paranoid. When businesses get big (and even near-monopolistic) and then cease to serve customers, they fail. While serving customers, there is no call for fretting over businesses that move from one success to another  — which is what Rushkoff has the gall to worry about.

The call for Amazon’s break-up over-sells government and necessarily under-serves consumers.

This is Common Sense. I’m Paul Jacob.

 

* Rushkoff’s piece in Fast Company was the first I heard of such a “call.” Rushkoff is the coiner of the term “media virus” and a sort of populist pusher of market skepticism.

** For the bizarre story of the Standard Oil case, and how it made no economic sense whatsoever, see Dominick T. Armentano, Antitrust: The Case for Repeal (Ludwig von Mises Institute, 1999), p. 41-43, and Antitrust and Monopoly (Independent Institute, 1990), pp. 57-60.

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free trade & free markets general freedom individual achievement property rights responsibility too much government

Roman Rockets?

Blue Origin, Jeff Bezos, rocket, private, privatize, Common Sense, illustration

Is Big Government necessary to accomplish Big Things?

Big government built the pyramids. Big government erected the Great Wall of China. Big government put Man on the Moon.

But humanity could have reached Luna over a thousand years ago, had Roman civilization not gone into a death spiral.

Bill Whittle made this point in some recent talks on Afterburner and guesting on Stefan Molyneux’s philosophy show. He blames the fall of past civilizations on “sexual strategies”: the sociobiology of r/K. (The “r” strategy organisms make lots of babies, invest little in them, accept widespread predation; the “K” strategy makes fewer babies, invests heavily in each, and suppresses predators and parasites.) Civilizations start K-style and decline with r.

It’s a theory.

Whatever the biology, Big Government was integral to Rome’s decline, with its exploitative systems and corruption, monetary inflation and “handouts.”

Rome wasn’t destroyed in a day. There were delays and cost-overruns, like any government job.

But Whittle’s right about progress. Humanity would be a lot further along if it didn’t get caught in government/conflict/exploitation traps. Private companies might be on the Moon today were it not for Big governments that destroyed promising civilization in the past.

But hey: private enterprise is catching up.

“In an historic first,” Popular Science informs us, “the private company founded by Amazon co-founder Jeff Bezos has become the first to land a re-useable rocket that’s traveled to and from space.” The rocket lands as envisioned in old science fiction flicks, vertically — though with the aid of “drag brakes” (parachutes).

Let’s hope our civilization doesn’t once again collapse before we witness (and contribute to) further progress.

This is Common Sense. I’m Paul Jacob.

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Blue Origin, Jeff Bezos, rocket, private, privatize, Common Sense, illustration

 

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free trade & free markets too much government

Biting the Apple

Apple is on trial for refusing to pretend that the company has done something wrong.

In 2009, Apple invited five major publishers to sell e-books through the forthcoming iPad, on the basis of the “agency model.” The publishers would set the prices, Apple would take a 30% cut. Apple also required that the e-books not be sold more cheaply elsewhere.

The publishers were happy to agree because Amazon had been buying new e-books wholesale and steeply discounting them, sometimes at a loss to itself, in order to sell them at $9.99. In the eyes of the publishers, this price seemed too low a benchmark. Apple’s deal gave them new clout in negotiating with Amazon.

The government says average book prices rose in the wake of this “conspiracy.” Apple says prices declined. It’s irrelevant.

To charge a price that some persons dislike violates nobody’s rights. Nor does stipulating terms of contract that a prospective partner dislikes and may reject. Anti-trust law has nothing to do with justice. It’s a bludgeon that some businesses — in conspiracy with the government — use to thwack competitors.

No violation of anyone’s rights has even been claimed in this case, let alone established. Yet five innocent parties have been forced to pay tens of millions to the government and accede to curtailment of their right to contract. And Apple, having refused to be bullied, must defend itself in court.

That’s the crime, and government officials are the ones committing it.

This is Common Sense. I’m Paul Jacob.