From Palladium Magazine, June 8, 2019:"The notion that social and economic structures under state socialism and large-scale corporate capitalism begin to resemble each other is not a new one. Back in the 1940s, the economist Joseph Schumpeter predicted that the success of corporate power itself would lead to the demise of entrepreneurial markets. Likewise, the unorthodox Hegelian philosopher Alexandre Kojève predicted that a Cold War victory by either American or Soviet power would lead to a fundamentally similar society, where bureaucratic management displaced the older class structure. The same idea can be seen in the familiar cyberpunk trope of a hegemonic and dystopian corporation which embodies state-like powers, unchecked by law or justice."
How Amazon Is Beating Antitrust Before It Happens
Information technology is the largest sector of the stock market, worth more today than the entire market in the trough of the recession, and contains the market’s five highest valued companies.
Amazon, jockeying in the top five, is in a class of its own.
In 2018, the company reached a valuation of $1 trillion, the fastest ever to do so, earned $241.5 billion in revenue—exceeding Facebook and Google combined—and employed 613,000 people. It’s now the second largest employer in the United States. The retail startup has become, as Lina Khan writes in Amazon’s Antitrust Paradox, a “marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.” The firm stands alongside history’s titanic conglomerates.
The pillars of Amazon today are Marketplace, Amazon Web Services (AWS), and Prime membership. Marketplace includes Amazon.com, the familiar retail platform, and Fulfillment by Amazon, providing warehousing and shipping to retailers. AWS is a suite of computing infrastructure services, including cloud computing, and storage. Prime is its annual flat fee membership for free 2-day shipping and other perks.
Amazon can’t be comprehensively described as a retailer, or even a technology firm. It’s more like a utility for commerce comprised of infrastructure service platforms. Like other large firms, Amazon overcomes high fixed costs and low profit margins with massive volume and economies of scale.
The main innovation at Amazon was not technological but organizational. The company is uniquely adapted to the economic logic of the information age, and its structure and conduct lend themselves well to defense against internal and external threats to growth, especially antitrust enforcement. As Khan notes, Amazon is structured in such a way that it’s like “Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them.” The CIA’s computing-intensive operations, for example, are heavily tied into AWS. This is likely not an accident. Aside from providing crucial services to dark parts of the government, Amazon cuts off antitrust angles by obsessing about customer experience. Antitrust requires proof of customer harm, after all. No harm, no antitrust—at least in theory.....MUCH MORE
Rather than take profits and issue dividends, which Bezos specifies as Amazon’s “fundamental measure” of success, the company aggressively re-invests in new growth. Amazon’s value has climbed as investors have rewarded this strategy, enticed by the promise of even greater dividends when the company’s greater ambitions are realized. Management has been characteristically secretive about what that might be.
For a corporation pursuing growth and survival, the ideal position to achieve would be that of the megacorporation. The megacorp is a company that uses economically or technologically derived power to establish a fortified position in society, outside the state’s reach, from which to exploit the population. We’ve seen the trope of the social control state manifest in China; perhaps recent technological perturbations could give rise to a genuine, malicious megacorp.
The notion that social and economic structures under state socialism and large-scale corporate capitalism begin to resemble each other is not a new one. Back in the 1940s, the economist Joseph Schumpeter predicted that the success of corporate power itself would lead to the demise of entrepreneurial markets. Likewise, the unorthodox Hegelian philosopher Alexandre Kojève predicted that a Cold War victory by either American or Soviet power would lead to a fundamentally similar society, where bureaucratic management displaced the older class structure. The same idea can be seen in the familiar cyberpunk trope of a hegemonic and dystopian corporation which embodies state-like powers, unchecked by law or justice.
Amazon’s dominance has invited the comparison. But this might actually underestimate the company’s ability to foresee and adapt to the obstacles of public resentment, particularly where it might have political fallout. Under Bezos, the company’s structure and conduct lack much resemblance to the malicious corporate powers of science fiction. Such criticisms also have to contend with the fact that Amazon’s power has been built off its ability to build customer loyalty. True, workers have had to deal with grueling warehouse work hours and companies using Amazon platforms have been put under pressure. But all these actions are undergirded by a logic which has benefited consumers. And since many of those adversely affected by Amazon in one capacity benefit from it in another, this throws a major wrench into the state’s task of deciding how to deal with its growing power.
The Nature Of Amazon
What’s Amazon’s endgame? It’s impossible to know without first looking at what Amazon is as a company and why it was created that way. In his first letter to shareholders, Bezos describes his aim: “extend and solidify our current market leadership position…in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand.” This sounds entirely banal, but what if a company actually followed the ‘core values’ that normally make half its employees roll their eyes? That company is Amazon.
Amazon is also obsessed with guarding against internal and external threats to growth, primarily organizational sclerosis and antitrust enforcement. These are the interests around which Amazon—and every facet of the company—was devised.....
