On the place of Amazon in politics and modern capitalism

OK, that's enough day-to-day politics.  Bigger picture.

One of the more irritating tics of modern political commentary is to treat the left and the right as mirror images of each other, functionally equivalent.  They are not, for a variety of reasons.  They are structurally different.  And yet, every once in a while, something interesting happens that leads to a "hey, look, the ideological spectrum is a circle and the far left and far right are meeting on the ends" kind of a moment.  If I could draw, or had any graphic/technological competence, I'd do some sort of visual/graphical thing here, but you come here for the snark, not the visual aids.

Snark, the herald angels sing!

So let's talk about Amazon.  Not our soon-to-be-trillionaire overlord, Jeff Bezos, but Amazon itself.  Do you order stuff from them?  I'll bet you do.  You have probably increased your orders over the last few months, but you probably ordered stuff before then.

Now, do you like Amazon, as a company?

Here's where things get fun.  I'm hangin' around here, on a lovely Sunday morning, sipping my coffee, and it is not Starbucks.  Why?  Because Starbucks sucks.  They make bad coffee.  Do I have anything against the company?  Not the point.  I have something against their coffee.  I drink snooty coffee because it's better coffee.  Sure, you can have various discussions about market structures and all of that, but mostly, I care about the coffee.  Once upon a time, I was a college student who hung out in cafes to all hours of the night, but I'm an oldster now, so I just care about my damned coffee, and it matters less to me whether or not they put out of business the local joints (even the ones that provide venues for musicians) than the quality of the coffee.

Starbucks sucks.

How do you feel about Amazon?  Do they have the stuff you want to buy?  At a reasonable price?  Good delivery times, customer service, etc.?  Some of that is changing these days, obviously.  Just try ordering some hand sanitizer and see what happens, but I'm just asking about the basic mechanics of the business.

Amazon has taken over a lot based on what Joseph Schumpeter called "creative destruction."  Convenience of shopping, fast delivery, and all of that, have meant that they dominated a lot of markets.  Nobody made you buy your tchotchkes from Amazon, but they were faster, and more convenient.  And for those people who just hate stores, hate crowds and hate shopping... there's an advantage even aside from speed.

Why are you looking at me?

Amazon is currently under some investigations for violations of antitrust practices, such as undercutting third party sellers on prices for their own generic brands, and there is a lot going on here, but from the consumer's perspective, there's a reason it works.

So I return to my earlier question:  do you like Amazon?

Lemme come back to that.

There's a weird thing going on generally with capitalism and modern political ideology.  The left has been moving left, and away from capitalism for some time.  To be sure, there are no political movements to nationalize Amazon, nor to nationalize any competitors to Amazon, which would be a true socialist response to Amazon.  Instead, there are inchoate proposals to "break up" any company deemed "big."  Scratch that.  There are inchoate proposals to "break up" any "corporation" deemed "big."  What's the difference between a "company" and a "corporation?"

Well, I could actually give you a long lecture on what a limited liability partnership is, why it exists in the law, and all of that, but that's never the point.  The point is that the word, "corporation," has become a stand-in for the evils of profit-seeking among the far-left, and that's kind of my point.

Listen to Bernie Sanders or Elizabeth Warren say the word, "corporation," and it's like listening to Donald Trump say the word, "immigrant."  Diction and intonation can be very revealing about intent, even when actual proposals cannot go as far as the speaker would want because of external constraints.

Now, here's the basic economic point.  A market with "perfect competition" has five elements:  many buyers, many sellers, perfect information, identical goods, and no entry barriers.  You can group or rename those conditions in a variety of ways, just like different bibles rename the "commandments" in different translations, but notice that "many sellers" thing.  The idea is to have enough firms in the market that no one firm has a dominant market share.

Amazon does.

So, is that intrinsically and always bad?  We have antitrust policies for some circumstances...

Well, the thing is that there is also a concept in economics called an "economy of scale."  When a firm gets big enough, it can charge less per unit because production gets more efficient at higher volumes.

In other words, big isn't always bad.

Entry barriers.  Those are the things we really don't like.  This gets into rent-seeking, public choice economics, and that whole shebang.

Where do we see an economy of scale with Amazon?  Delivery.  You know those trucks driving all over the place delivering packages at absurd speeds?  They became rather important of late.  Without Amazon's size, that couldn't have happened.  They needed size and market share to fund the creation of their own delivery service.  Now imagine stay-at-home orders without Amazon and its delivery services.  Without its... economy of scale.  Do the math, people.  Entry barriers?  We don't like those, but economies of scale are real.

This requires thinking not just about those conditions for perfect competition, but what they do and why.  After all, as Friedrich Hayek noted, a market with perfect competition, by definition, has no innovation because everyone is selling the same good.  Think about this stuff.

But the left has just latched onto the equation of big=bad.  Amazon is bad, bad, bad.  If you're on the left, you're supposed to hate Amazon.  Reasons range from treatment of workers in warehouses-- and I'll leave it to you to determine the role of governments versus consumers versus labor organization to address those concerns-- to general sympathy for those put out of business (I miss book stores and music stores, I admit) to an ungrounded big=bad ethos that misses a lot about economics before we even start getting into Schumpeter.

Point being, the left doesn't like Amazon.

And neither does the right.

Of course, conservatism has been in a state of flux since 2016, when the Republican Party turned itself into a Trump personality cult, regardless of how many ways he deviated from what had been defined as "conservatism" to that point.  (Matt Grossman & David Hopkins are still wrong, and the Republican Party is not, nor has it ever been an ideological purity-seeking movement.  That cannot be said with enough frequency.  Simply using the phrase "asymmetric polarization" does not mean that their explanation for "asymmetric polarization" was anything like correct.)

Donald Trump is, obviously, not a capitalist.  He is a mercantilist.  He adheres to a pre-capitalist ideology that sees economic transactions generally, and international trade especially, as zero-sum.  Yet, Trump is both more and less than a mercantilist.  He has beliefs beyond mercantilism, but they are less systemic.  Mainly, he is corrupt and narcissistic, which leads to his assessment of Amazon.  Jeff Bezos owns Amazon, Jeff Bezos also owns the Washington Post, the Washington Post factually reports when Trump lies and otherwise says or does stupid/vile things, so Trump hates Amazon.  The transitive property of narcissism-driven vitriol.

This has led to such interesting developments as Trump instructing the Pentagon to steer a contract away from Amazon (which does cloud computing) to get at Bezos, because of the WaPo.  Ongoing story.  We're beyond capitalism there, and entering the territory of government corruption in contracting, because it's Trump.  Add to that Trump constantly lying and saying that Amazon gets some sort of special deal with the Post Office (it doesn't-- it's the same bulk deal that every company gets), and this turns into fuel for a Republican fire that will lead to currently unknown consequences for the USPS.

Because Trump doesn't like the Washington Post.

Ah, capitalism.

The Republican war on Amazon is particularly stupid and venal, because it is being led by Trump.  Lefties who hate Amazon at least have a gripe with Amazon, even if some of the gripes are less informed than others.  Your position on labor issues in the warehouses... that's up to you.  If you don't understand economies of scale, or creative destruction, then that's a gap in understanding basic economics, and in the latter case, it isn't even math.  Schumpeter was pretty much just throwin' around highfalutin rhetoric in place of microeconomic modeling.  Worth reading, but study the econ too.

Amazon, then, is in a weird place, hated by both the left and the right, if for different reasons amid declining support for capitalism on the left and right.  The left hates Amazon for both specific reasons (its warehouses) and a general opposition to "corporations," without understanding the role of limited liability partnerships, along with an increasing belief that big=bad.  Not true, economically, but a belief nonetheless.  The right continues to demonstrate that it was never driven by ideological purity as its cult leader uses the power of government to wage personal economic wars.

And capitalism?  For different reasons, it is being attacked from the right and the left.  Strange times.

Now, let me just check that tracking.  Where's my damned package!  I ordered it, like, an hour ago!  Damn it, Bezos, you promised me drone delivery!