The Singular Pursuit of Comrade Bezos

Harris, Medium, Feb 15, 2018

Amazon’s plan to increase our efficiency a good thing?
Jessica Siao
It was
explicitly and deliberately a ratchet, designed to effect a one-way passage
from scarcity to plenty by way of stepping up output each year, every year,
year after year. Nothing else mattered: not profit, not the rate of industrial
accidents, not the effect of the factories on the land or the air. The planned
economy measured its success in terms of the amount of physical things it

— Francis
Spufford, Red Plenty
But isn’t
a business’s goal to turn a profit? Not at Amazon, at least in the traditional
sense. Jeff Bezos knows that operating cash flow gives the company the money it
needs to invest in all the things that keep it ahead of its competitors, and
recover from flops like the Fire Phone. Up and to the right.
— Recode,
Amazon’s Epic
20-Year Run as a Public Company, Explained in Five Charts

From a
financial point of view, Amazon doesn’t behave much like a successful 21st-century
company. Amazon has not bought back its own stock since 2012. Amazon has never
offered its shareholders a dividend. Unlike its peers Google, Apple, and
Facebook, Amazon does not hoard cash. It has only recently started to record
small, predictable profits. Instead, whenever it has resources, Amazon invests
in capacity, which results in growth at a ridiculous clip. When the company
found itself with $13.8 billion lying around, it bought a grocery chain for
$13.7 billion. As the Recode story referenced above summarizes in one of the
graphs: “It took Amazon 18 years as a public company to catch Walmart in market
cap, but only two more years to double it.” More than a profit-seeking
corporation, Amazon is behaving like a planned economy.
If there
is one story on Americans who grew up after the fall of the Berlin Wall know
about planned economies, I’d wager it’s the one about Boris Yeltsin in a Texas
In 1989,
recently elected to the Supreme Soviet, Yeltsin came to America, in part to see
Johnson Space Center in Houston. On an unscheduled jaunt, the Soviet delegation
visited a local supermarket. Photos from the Houston Chronicle
capture the day: Yeltsin, overcome by a display of Jell-O Pudding Pops; Yeltsin
inspecting the onions; Yeltsin staring down a full display of shiny produce
like a line of enemy soldiers. Planning could never master the countless
variables that capitalism calculated using the tireless machine of
self-interest. According to the story, the overflowing shelves filled Yeltsin
with despair for the Soviet system, turned him into an economic reformer, and
spelled the end for state socialism as a global force. We’re taught this lesson
in public schools, along with Animal Farm: Planned economies do not work.
almost 30 years later, but if Comrade Yeltsin had visited today’s most-advanced
American grocery stores, he might not have felt so bad. Journalist Hayley
Peterson summarized her findings in the title of her investigative piece, “‘Seeing
Someone Cry at Work Is Becoming Normal’: Employees Say Whole Foods Is Using
‘Scorecards’ to Punish Them
.” The scorecard in question measures
compliance with the (Amazon subsidiary) Whole Foods OTS, or “on-the-shelf”
inventory management. OTS is exhaustive, replacing a previously decentralized
system with inch-by-inch centralized standards. Those standards include
delivering food from trucks straight to the shelves, skipping the expense of
stockrooms. This has resulted in produce displays that couldn’t bring down
North Korea. Has Bezos stumbled into the problems with planning?
OTS was in play before Amazon purchased Whole Foods last August, stories about
enforcement to tears fit with the Bezos ethos and reputation. Amazon is famous
for pursuing growth and large-scale efficiencies, even when workers find the
experiments torturous and when they don’t make a lot of sense to customers,
either. If you receive a tiny item in a giant Amazon box, don’t worry. Your
order is just one small piece in an efficiency jigsaw that’s too big and fast
for any individual human to comprehend. If we view Amazon as a planned economy
rather than just another market player, it all starts to make more sense: We’ll
thank Jeff later, when the plan works. And indeed, with our dollars, we have.
In fact,
to think of Amazon as a “market player” is a mischaracterization. The world’s
biggest store doesn’t use suggested retail pricing; it sets its own. Book
authors (to use a personal example) receive a distinctly lower royalty for
Amazon sales because the site has the power to demand lower prices from
publishers, who in turn pass on the tighter margins to writers. But for
consumers, it works! Not only are books significantly cheaper on Amazon, the
site also features a giant stock that can be shipped to you within two days,
for free with Amazon Prime citizensh…er, membership. All 10 or so bookstores I
frequented as a high school and college student have closed, yet our access to
books has improved
at least as far as we seem to be
able to measure. It’s hard to expect consumers to feel bad enough about that to
change our behavior.
they attempt to grow in a single direction, planned economies always destroy as
well as build. In the 1930s, the Soviet Union compelled the collectivization of
kulaks, or prosperous peasants. Small farms were incorporated into a larger
collective agricultural system. Depending on who you ask, dekulakization was
literal genocide, comparable to the Holocaust, and/or it catapulted what had
been a continent-sized expanse of peasants into a modern superpower. Amazon’s
decimation of small businesses (bookstores in particular) is a similar sort of
collectivization, purging small proprietors or driving them onto Amazon
platforms. The process is decentralized and executed by the market rather than
the state, but don’t get confused: Whether or not Bezos is banging on his desk,
demanding the extermination of independent booksellers
though he probably isthese are top-down decisions to
eliminate particular ways of life.
Now, with
the purchase of Whole Foods, Bezos and Co. seem likely to apply the same
pattern to food. Responding to reports that Amazon will begin offering free two-hour
Whole Foods delivery for Prime customers, BuzzFeed’s Tom Gara tweeted,
“Stuff like this suggests Amazon is going to remove every cent of profit from
the grocery industry.” Free two-hour grocery delivery is ludicrously
convenient, perhaps the most convenient thing Amazon has come up with yet. And
why should we consumers pay for huge
dividends to Kroger shareholders
? Fuck ’em; if Bezos has the
discipline to stick to the growth plan instead of stuffing shareholder pockets
every quarter, then let him eat their lunch. Despite a business model based on
eliminating competition, Amazon has avoided
attention from antitrust authorities
because prices are down. If
consumers are better off, who cares if it’s a monopoly? American antitrust law
doesn’t exist to protect kulaks, whether they’re selling books or groceries.
has succeeded in large part because of the company’s uncommon drive to invest
in growth. And today, not only are other companies slow to spend, so are
governments. Austerity politics and decades of privatization put Amazon in a
place to take over state functions. If localities can’t or won’t invest in
jobs, then Bezos can get them
to forgo tax dollars (and dignity) to host HQ2
. There’s no reason
governments couldn’t offer on-demand cloud computing services as a public
utility, but instead the feds pay Amazon Web Services to host their sites. And if
the government outsources health care for its population to insurers who insist
on making profits, well, stay tuned.
There’s no near-term natural end to Amazon’s growth, and by next year the
company’s annual revenue should surpass the GDP of Vietnam. I don’t see any
reason why Amazon won’t start building its own cities in the near future.
never had to find out whether capitalism could compete with the Soviets plus
21st-century technology. Regardless, the idea that market competition can
better set prices than algorithms and planning is now passé. Our economists
used to scoff at the Soviets’ market-distorting subsidies; now Uber subsidizes
every ride. Compared to the capitalists who are making their
money by stripping the copper wiring from the American economy
, the
Bezos plan is efficient. So, with the exception of small business owners and
managers, why wouldn’t we want to turn an increasing amount of our life-world over
to Amazon? I have little doubt the company could, from a consumer perspective,
improve upon the current public-private mess that is Obamacare, for example.
Between the patchwork quilt of public- and private-sector scammers that run
America today and “up and to the right,” life in the Amazon with Lex Luthor
doesn’t look so bad. At least he has a plan, unlike some
From the
perspective of the average consumer, it’s hard to beat Amazon. The
single-minded focus on efficiency and growth has worked, and delivery
convenience is perhaps the one area of American life that has kept up with our
past expectations for the future. However, we do not make the passage from
cradle to grave as mere average consumers. Take a look at package delivery, for
example: Amazon’s latest disruptive announcement
is “Shipping with Amazon,” a challenge to the USPS, from which Amazon has been
conniving preferential
. As a government agency bound to serve everyone, the Postal
Service has had to accept all sorts of inefficiencies, like free delivery
for rural customers
or subsidized
media distribution to realize freedom of the press
. Amazon, on the
other hand, is a private company that doesn’t really have to do anything it
doesn’t want to do. In aggregate, as average consumers, we should be cheering.
Maybe we are. But as members of a national community, I hope we stop to ask if
efficiency is all we want from our delivery infrastructure. Lowering costs as
far as possible sounds good until you remember that one of those costs is
labor. One of those costs is us.
this month, Amazon was awarded two
for a wristband system that would track the movement of
warehouse employees’ hands in real time. It’s easy to see how this is a gain in
efficiency: If the company can optimize employee movements, everything can be
done faster and cheaper. It’s also easy to see how, for those workers, this is
a significant step down the path into a dystopian hellworld. Amazon is a notoriously
brutal, draining place to work
, even at the executive levels. The
fear used to be that if Amazon could elbow out all its competitors with low
prices, it would then jack them up, Martin Shkreli style. That’s not what happened.
Instead, Amazon and other monopsonists have used
their power to drive wages and the labor share of production down
If you follow the Bezos strategy all the way, it doesn’t end in fully
automated luxury communism
or even Wall-E. It ends in The
Matrix, with workers swaddled in a pod of perfect convenience and perfect
exploitation. Central planning in its capitalist form turns people into another
cost to be reduced as low as possible.
because a plan is efficient doesn’t mean it’s good. Postal Service employees
are unionized; they have higher wages, paths for advancement, job stability,
negotiated grievance procedures, health benefits, vacation time, etc. Amazon
delivery drivers are not and do not. That difference counts as efficiency when
we measure by price, and that is, to my mind, a very good argument for not
handing the world over to the king of efficiency. The question that remains is
whether we have already been too far reduced, whether after being treated as
consumers and costs, we might still have it in us to be more, because that’s
what it will take to wrench society away from Bezos and from the people who
have made him look like a reasonable alternative.