So if you are an inventor, and you come up with some wonderful new widget, and Amazon is impressed by the number of widgets you sell, well, you can expect to see the Amazon Basic Widget popping up for half the price of yours soon. (And to find yourself banned from selling on Amazon.) The Journal reports that Amazon is even willing to take a loss in order to drive others out of business; when it decided to take on diaper manufacturer Quidsi, Amazon was at one point “losing $7 for every box of diapers” it sold. An internal email said that “we need to match pricing on these guys no matter what the cost.” Quidsi “unravel[ed]” and was forced to sell itself to Amazon.
Amazon’s marketplace has become so large that it is very difficult for manufacturers not to offer products through it. But when they do, they have to agree to Amazon’s terms, and Amazon’s control over who gets to sell on their platform means they can extract nearly any concessions they like, including getting access to the kinds of information that help them launch competitor products. So manufacturers are in a bind: they can’t not sell on Amazon, but if they sell on Amazon, Amazon will try to steal their ideas and destroy them. If Amazon is willing to take a $7 loss per sale, who on earth could compete?
I once wrote a short hypothetical called “The Infinitely Rich Man” that was designed to show how large amounts of concentrated wealth can come with almost limitless power to shape the economy according to your whims. If someone has near infinite riches, and decided they would like to destroy your life, there are nearly endless ways they could do it, because money is power. Amazon, which has this kind of nearly “endless” resources, could, if it wanted to, destroy pretty much anything you love. If they wanted to put your beloved corner coffeeshop out of business, they could do it. If they wanted to buy your whole neighborhood and flatten it, they could.
When a corporation becomes this powerful, all of the stories told about the “freedom” of the market begin to fall apart. This is because Amazon, as its unstoppable growth continues, is becoming more and more like the government in the scale of its power. Corporations are already like “private governments”—going to work is like entering a dictatorial microstate. Amazon’s control of the marketplace is as if a private company owned all of the roads, rails, and airports in the United States. Such a company would have almost endless power to make coercive demands on anyone wanting to engage in commerce. They would be a “dictatorship within a democracy.”
Jeff Bezos’ vision for Amazon is megalomaniacal, and one company engineer has observed Bezos aspires to be the 21st century’s Alexander the Great. Bezos does not disguise the fact that there is no end to his ambition: he quite seriously wants to establish giant privatized space colonies, presumably under his sole control. We can see here how, if a single entity “wins the market,” eliminating all competition, the distinction between capitalism and dictatorship ceases to be very meaningful. A hierarchical organization exerts coercive control through its monopoly on necessary resources; the fact that it is “private” rather than “public” just means that it is free of any democratic accountability.
[ed. See also: Inside the Whale: An Interview with an Anonymous Amazonian (Logic).]
