Amazon Destroys the Intellectual Justifications for Capitalism(currentaffairs.org)
currentaffairs.org
Amazon Destroys the Intellectual Justifications for Capitalism
https://www.currentaffairs.org/2020/12/how-amazon-destroys-the-intellectual-justifications-for-capitalism
66 comments
It’s the government’s job to prevent this anticompetitive behavior but corporate lobbyists have been interfering and will until lobbying is illegal
Our (americans) only hope is the EU.
A system that requires outside manipulation to keep it functioning is not a good system.
The fact that capitalism inevitably converges towards monopoly (and therefor the concentration of wealth and power) with out the intervention of the government (which is often very vulnerable to corruption at the hands of concentrated power and wealth) is effectively a fatal flaw.
This is why I am an advocate of free market socialism - a market system where companies are democratically run by their workers and the financiers are limited to a regulated return on the form of interest on their loans.
Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows. Plus the bigger the organization gets, the slower and less responsive it will get. And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
All of these factors will act to keep companies from growing to big and help keep the market in balance. Which benefits the consumers.
And in the meantime the fact that the workers call the shots will prevent the kinds of labor abuses that have plagued the capitalist system since its inception.
The fact that capitalism inevitably converges towards monopoly (and therefor the concentration of wealth and power) with out the intervention of the government (which is often very vulnerable to corruption at the hands of concentrated power and wealth) is effectively a fatal flaw.
This is why I am an advocate of free market socialism - a market system where companies are democratically run by their workers and the financiers are limited to a regulated return on the form of interest on their loans.
Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows. Plus the bigger the organization gets, the slower and less responsive it will get. And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
All of these factors will act to keep companies from growing to big and help keep the market in balance. Which benefits the consumers.
And in the meantime the fact that the workers call the shots will prevent the kinds of labor abuses that have plagued the capitalist system since its inception.
How does your system prevent the formation of a monopoly? The employee-run corporation merges with its competitors until there are none left, then charges monopoly prices to customers in order to pay above-market wages to employees. How does that solve the problem?
Is your parent a time travel comment? Because you asked a question they specifically addressed!
Jokes aside they may have edited their comment. HN not showing 'edited' on comments except if you specifically add 'Edit' to your post is a pet peeve of mine. You replied within 9 minutes, edits are common in that time period.
Jokes aside they may have edited their comment. HN not showing 'edited' on comments except if you specifically add 'Edit' to your post is a pet peeve of mine. You replied within 9 minutes, edits are common in that time period.
> Is your parent a time travel comment? Because you asked a question they specifically addressed!
The explanation doesn't actually address anything:
> Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows.
It's like saying no one will want to buy shares of a large conglomerate or vote to have it merge with another one because the shareholder's votes will be watered down. Empirically false, happens regularly in practice. Especially when the larger company with less competition could pay higher dividends/wages.
> Plus the bigger the organization gets, the slower and less responsive it will get.
Which doesn't really stop it once it merges to a monopoly and has no competitors.
> And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
But being a monopoly provides more resources to tackle those other issues, at the expense of the customers, and why do the employees care about them any more than the shareholders would?
The explanation doesn't actually address anything:
> Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows.
It's like saying no one will want to buy shares of a large conglomerate or vote to have it merge with another one because the shareholder's votes will be watered down. Empirically false, happens regularly in practice. Especially when the larger company with less competition could pay higher dividends/wages.
> Plus the bigger the organization gets, the slower and less responsive it will get.
Which doesn't really stop it once it merges to a monopoly and has no competitors.
> And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
But being a monopoly provides more resources to tackle those other issues, at the expense of the customers, and why do the employees care about them any more than the shareholders would?
>>>> Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows. Plus the bigger the organization gets, the slower and less responsive it will get. And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
> It's like saying no one will want to buy shares of a large conglomerate or vote to have it merge with another one because the shareholder's votes will be watered down. Empirically false, happens regularly in practice. Especially when the larger company with less competition could pay higher dividends/wages.
No it isn't. Shareholder capitalism is one-share-one-vote, but those shares can and usually are concentrated under the control of a small number of people. The GGGP seems to be talking about a system of one-worker-one-vote, which would prevent that kind of concentration and therefore have a different dynamic. Also, shareholders tend to monomanically pursue maximization of dividends + capital gains over some time horizon, while I'd imagine a worker would care a more diverse range of things.
> It's like saying no one will want to buy shares of a large conglomerate or vote to have it merge with another one because the shareholder's votes will be watered down. Empirically false, happens regularly in practice. Especially when the larger company with less competition could pay higher dividends/wages.
No it isn't. Shareholder capitalism is one-share-one-vote, but those shares can and usually are concentrated under the control of a small number of people. The GGGP seems to be talking about a system of one-worker-one-vote, which would prevent that kind of concentration and therefore have a different dynamic. Also, shareholders tend to monomanically pursue maximization of dividends + capital gains over some time horizon, while I'd imagine a worker would care a more diverse range of things.
> No it isn't. Shareholder capitalism is one-share-one-vote, but those shares can and usually are concentrated under the control of a small number of people. The GGGP seems to be talking about a system of one-worker-one-vote, which would prevent that kind of concentration and therefore have a different dynamic.
The distinction you're making doesn't appear relevant. If you're an employee and your company merges with one of equal size, your vote is diluted by half. If you're a shareholder and your company merges with one of equal size, your vote is diluted by half. It's true whether you own one share or a million.
> Also, shareholders tend to monomanically pursue maximization of dividends + capital gains over some time horizon, while I'd imagine a worker would care a more diverse range of things.
=> But being a monopoly provides more resources to tackle those other issues, at the expense of the customers, and why do the employees care about them any more than the shareholders would?
The distinction you're making doesn't appear relevant. If you're an employee and your company merges with one of equal size, your vote is diluted by half. If you're a shareholder and your company merges with one of equal size, your vote is diluted by half. It's true whether you own one share or a million.
> Also, shareholders tend to monomanically pursue maximization of dividends + capital gains over some time horizon, while I'd imagine a worker would care a more diverse range of things.
=> But being a monopoly provides more resources to tackle those other issues, at the expense of the customers, and why do the employees care about them any more than the shareholders would?
> The distinction you're making doesn't appear relevant. If you're an employee and your company merges with one of equal size, your vote is diluted by half. If you're a shareholder and your company merges with one of equal size, your vote is diluted by half. It's true whether you own one share or a million.
But the dynamic and motivations of the actors in the two systems would be different. In every company I have shares of, my ability to influence company policy with my votes literally rounds down to nothing because I own such a small fraction of shares, so I don't care about that getting diluted. 0 * 50% is still 0. Even in contemporary companies, one-worker-one-vote would give the smallest actors massively more say, and in such a system I'd imagine there'd be incentives for companies to remain smaller so each individual worker feels like they have more say over their day-to-day life.
Having a say in your area in important, and for instance (IIRC) the founders of WhatsApp and Instagram quit Facebook after it became clear that their previous assurances of maintaining control over their creations despite their dilution was a lie.
But the dynamic and motivations of the actors in the two systems would be different. In every company I have shares of, my ability to influence company policy with my votes literally rounds down to nothing because I own such a small fraction of shares, so I don't care about that getting diluted. 0 * 50% is still 0. Even in contemporary companies, one-worker-one-vote would give the smallest actors massively more say, and in such a system I'd imagine there'd be incentives for companies to remain smaller so each individual worker feels like they have more say over their day-to-day life.
Having a say in your area in important, and for instance (IIRC) the founders of WhatsApp and Instagram quit Facebook after it became clear that their previous assurances of maintaining control over their creations despite their dilution was a lie.
> In every company I have shares of, my ability to influence company policy with my votes literally rounds down to nothing because I own such a small fraction of shares, so I don't care about that getting diluted. 0 * 50% is still 0.
How is that not the same thing when you're dealing with companies that have thousands of employees and each individual's vote would also already be ~0%?
> and in such a system I'd imagine there'd be incentives for companies to remain smaller so each individual worker feels like they have more say over their day-to-day life.
That would only apply to companies that aren't already big. But then you're subject to the same dynamic as is already present where the larger company has greater economies of scale and undercuts the smaller company on price until they go out of business. Walmart didn't get where they are by buying all the smaller competing retailers.
How is that not the same thing when you're dealing with companies that have thousands of employees and each individual's vote would also already be ~0%?
> and in such a system I'd imagine there'd be incentives for companies to remain smaller so each individual worker feels like they have more say over their day-to-day life.
That would only apply to companies that aren't already big. But then you're subject to the same dynamic as is already present where the larger company has greater economies of scale and undercuts the smaller company on price until they go out of business. Walmart didn't get where they are by buying all the smaller competing retailers.
>If you're a shareholder and your company merges with one of equal size, your vote is diluted by half. It's true whether you own one share or a million.
This discussion wasn't about mergers. Amazon isn't merging with anyone. They're outright buying their competition.
This discussion wasn't about mergers. Amazon isn't merging with anyone. They're outright buying their competition.
I don't understand what distinction you're trying to make. If Amazon doubles in size by merging with one Amazon-sized company or by acquiring a thousand companies that are each 0.1% of their size, the effect on shareholder control of the combined entity is the same.
Democratic ownership can counter act the tendency to grow and absorb competitors, because each new worker who gets a vote waters down the votes and control of their fellows
Non-sequitur
And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
If lobbying applied to Congress is already dirty, imagine applied to less transparent orgs.
All of these factors will act to keep companies from growing to big and help keep the market in balance. Which benefits the consumers.
Another non-sequitur
Non-sequitur
And a democratic organization run by its workers will have a myriad of motivating factors to balance, other than chasing infinite profit or return for the investors.
If lobbying applied to Congress is already dirty, imagine applied to less transparent orgs.
All of these factors will act to keep companies from growing to big and help keep the market in balance. Which benefits the consumers.
Another non-sequitur
What would illegal lobbying look like in the US?
Easy. You are not allowed to donate to political campaigns.
In fact, I've often suggested that the real solution is this. Elections and the electoral system are in the public interest, so why not fund it 100% publicly? The FEC sets aside a budget for anyone who gets a certain number of signatures of endorsement. They can spend that, and only that. They get a set amount of time on all TV stations. Nobody is allowed to donate publicly or privately. Elections are argued on their merits not on their budgets.
If it's shown to benefit a candidate, it's a crime, and you face civil and potentially criminal penalties.
In fact, I've often suggested that the real solution is this. Elections and the electoral system are in the public interest, so why not fund it 100% publicly? The FEC sets aside a budget for anyone who gets a certain number of signatures of endorsement. They can spend that, and only that. They get a set amount of time on all TV stations. Nobody is allowed to donate publicly or privately. Elections are argued on their merits not on their budgets.
If it's shown to benefit a candidate, it's a crime, and you face civil and potentially criminal penalties.
> They can spend that, and only that. They get a set amount of time on all TV stations.
That’s naive. Media is owned by a few folks. There’s nothing to stop Murdoch from broadcasting/publishing the names of only the person that Murdoch wants to win. And you’ll never hear about the little Green Party lady that YOU want to win, and you can’t donate to help her out.
You can cap TV time for funded spots, but the talking heads on radio and TV will just keep mentioning how great Candidate Y is.
That’s naive. Media is owned by a few folks. There’s nothing to stop Murdoch from broadcasting/publishing the names of only the person that Murdoch wants to win. And you’ll never hear about the little Green Party lady that YOU want to win, and you can’t donate to help her out.
You can cap TV time for funded spots, but the talking heads on radio and TV will just keep mentioning how great Candidate Y is.
This is getting meta because the media being owned by a few folks is a monopoly/antitrust problem created in large part by lobbying. Our legislators should not have let all of the media companies in the country be owned by like 15 organizations.
> That’s naive. Media is owned by a few folks. There’s nothing to stop Murdoch from broadcasting/publishing the names of only the person that Murdoch wants to win. And you’ll never hear about the little Green Party lady that YOU want to win, and you can’t donate to help her out.
Yes, there is, make it illegal.
> You can cap TV time for funded spots, but the talking heads on radio and TV will just keep mentioning how great Candidate Y is.
I'm sure after the FCC issues the first few fines they'll settle right down.
At the end of the day, all of these roadblocks can be bowled over, its just a matter of how much you want it.
Yes, there is, make it illegal.
> You can cap TV time for funded spots, but the talking heads on radio and TV will just keep mentioning how great Candidate Y is.
I'm sure after the FCC issues the first few fines they'll settle right down.
At the end of the day, all of these roadblocks can be bowled over, its just a matter of how much you want it.
Illegal lobbying happens all the time. First of all, if you're involved in certain activities you must register as a lobbyist. People who walk the line with informal lobbying etc. are breaking the law. Secondly, obviously quid pro quo happens but is illegal. And finally there are those people that once worked for the government / military who are now greatly influencing government spending at a contractor. Of course some of that is allowed to a degree, but the envelope is constantly being pushed.
My opinion is that someone should file the proper case(s) that would eventually lead to SCOTUS overturning the Citizens United ruling. Then we should move to publicly-funding races. And we should DEFINITELY remove PAC money from justice races (why is that even a thing?).
But this country has a long history of increasingly corrupt government cranking out pork barrel projects and ignoring us little people. That will not change any time soon unfortunately, without a massive revolution.
My opinion is that someone should file the proper case(s) that would eventually lead to SCOTUS overturning the Citizens United ruling. Then we should move to publicly-funding races. And we should DEFINITELY remove PAC money from justice races (why is that even a thing?).
But this country has a long history of increasingly corrupt government cranking out pork barrel projects and ignoring us little people. That will not change any time soon unfortunately, without a massive revolution.
The right to petition the government is guaranteed by the 1st Amendment to the US Constitution.
Petition all you want, but you're not allowed to donate to them or their campaign. That much isn't guaranteed.
It seems that it's a matter of interpretation. I thought (but I could be wrong) that the supreme court decided that donating money is "speech" and therefore protected. I'm not saying that I agree or disagree with that, just that the supreme court seems to have already weighed in on the matter.
You’re both right, the Citizens United ruling said cash was speech according to the 1st amendment if it was an “independent expenditure” ie Super PACs etc. You can’t donate unlimited amounts directly to a candidate, but you can to “independent entities”.
IANAL so I’m not sure why you can’t just donate it all directly to a candidate, perhaps a different section of the constitution?
https://en.m.wikipedia.org/wiki/Citizens_United_v._FEC
IANAL so I’m not sure why you can’t just donate it all directly to a candidate, perhaps a different section of the constitution?
https://en.m.wikipedia.org/wiki/Citizens_United_v._FEC
> I thought (but I could be wrong) that the supreme court decided that donating money is "speech" and therefore protected.
Yeah and constitution needs to be changed to subject the supreme court to confirmation by the voters every so often.
Yeah and constitution needs to be changed to subject the supreme court to confirmation by the voters every so often.
It can also be amended to separate money and speech. A constitutional amendment is the way to rectify poor Supreme Court rulings, the way the 14th amendment was brought in specifically to overturn Dred Scott.
How is money not speech? Jeff Bezos is able to buy the Washington Post (or multiple TV stations if he wanted) and can say anything he wants under the guise of free speech.
I don’t have Jeff Bezos’ resources, but if I buy a single television ad to advocate for my position I should be regulated?
I don’t see a difference between media companies publishing material and overt partisans buying advertisements.
I don’t have Jeff Bezos’ resources, but if I buy a single television ad to advocate for my position I should be regulated?
I don’t see a difference between media companies publishing material and overt partisans buying advertisements.
Money isn’t speech it’s volume. Anyone can speak, the one with more money yells loudest. The constitution doesn’t guarantee the right to free screaming.
Lobbying is speech. Make it public, not illegal.
All donations... public. All meetings... recorded and public. Air it all out. Disinfect it with sunshine.
Making it illegal will just make it hidden. It will be worse.
All donations... public. All meetings... recorded and public. Air it all out. Disinfect it with sunshine.
Making it illegal will just make it hidden. It will be worse.
Amazon has been great for the consumer, Amazon's your margin is my opportunity mantra has lowered costs for tons of things and added a ton of value to people's lives. Sure this hurts other businesses, but that's business and eventually someone will come for Amazon. Do I as a consumer care if some drop shipper camera tripod company got eaten by Amazon basic? Hell no I don't.
Over time they have been systemically raising prices. I have noticed this and it has been mentioned on HN by ex-team members.
The argument posited here is that Amazon has reached "escape velocity" and that the sheer amount of market share and capital and control of infrastructure they have makes it unrealistic that someone will come for Amazon. That's not an argument I've heard made before, but I do find it persuasive.
They literally control large portions of the internet with AWS, are moving into air freight, ground freight and I assume sea freight is next. They control the warehouses and they control the customer experience. They have third-party sellers and then once popular they steal their ideas and drive them out of business, because they can afford to.
The bigger Amazon gets the harder it gets for someone to overtake them.
And while you may not care yet, the natural outcome is that once they are the only game in town, they will simply raise prices. On every purchase you're winning the battle while losing the war.
They literally control large portions of the internet with AWS, are moving into air freight, ground freight and I assume sea freight is next. They control the warehouses and they control the customer experience. They have third-party sellers and then once popular they steal their ideas and drive them out of business, because they can afford to.
The bigger Amazon gets the harder it gets for someone to overtake them.
And while you may not care yet, the natural outcome is that once they are the only game in town, they will simply raise prices. On every purchase you're winning the battle while losing the war.
That's what they said about Walmart 2 decades ago and it what they said about Sears 2 decades before that.
I'm not sure that has any bearing. Clearly they hadn't reached the scale Amazon has, so I'd suggest they hadn't found escape velocity. Not that the concept of escape velocity doesn't exist.
You can be wrong a million times, you only have to be right once.
You can be wrong a million times, you only have to be right once.
It does have bearing. Walmart has twice the revenue, and has a grocery monopoly in “43 metropolitan areas and 160 smaller markets”. Walmart put Main Street out of business in most small towns decades ago
https://ilsr.org/wp-content/uploads/2019/06/Walmart_Grocery_...
https://ilsr.org/wp-content/uploads/2019/06/Walmart_Grocery_...
Sure, if Amazon becomes Standard Oil or Ma Bell, have the government bust em up (for them to split logistics from sales or something like that seems likely). For now they seems to be working as capitalism intended created win/win situations where Amazon gets new margin and the customer gets lower prices/better service. I don't think they have reached a monopoly level at all.
They're way past Ma Bell. After all Ma Bell is back, all the Baby Bells merged back together to re-form "The New AT&T." What changed is our tolerance for monopoly.
Long distance calls cost a pittance now. Service is better.
VoIP is a big innovation.
Lack of competition in cellular is another story....
Lack of competition in cellular is another story....
Which is also AT&T after the bought back Cingular which was split off from at&t
> It can simply lift the innovations of others, and because it can undercut their prices, it can put them out of business.
I agree that what amounts to dumping (pricing products below the cost of production) should be illegal. Nor should a company be forced out of business by the effort required to prove illegal act(s) by a competitor.
But it's not like customers are getting completely screwed by a "competitor" duplicating a product (provided the pricing isn't malicious towards the original manufacturer): they're getting low prices for presumably reasonable quality goods.
I agree that what amounts to dumping (pricing products below the cost of production) should be illegal. Nor should a company be forced out of business by the effort required to prove illegal act(s) by a competitor.
But it's not like customers are getting completely screwed by a "competitor" duplicating a product (provided the pricing isn't malicious towards the original manufacturer): they're getting low prices for presumably reasonable quality goods.
This is the exact problem I have with survelliance capitalism. What stops Microsoft, Google, ect from cornering every market? The last time I posted the question I was told those companies are looking for billion dollar investment opportunities and anything less isn't worth their time... and here we have Amazon cutting the nerdy kid's lunch money like a high school bully.
Allow for private property and profit from trade and you have Capitalism. What this is about is the need for eternal vigilance.
“But corporations all depend on the state and their workers to survive, and thus there are ways to seize it, democratize it, and keep it in public hands where it belongs.”
Sounds like something the villain in an Ayn Rand novel would say...
Sounds like something the villain in an Ayn Rand novel would say...
Most dramatic changes in economic systems have resulted in disaster. Yes there are competing ideas and some have merit but it's important to realise that most of the systems we've had have not work as well as capitalism has. That is not to say we have the perfect system but it is not the disaster most of its opponents claim it is. As such we should be very careful to make sudden changes in the hope of a utopia, because getting it wrong has a very high price. A price that will cost lives.
The reality is there is no purely capitalist society in the world. Each society is somewhere on the spectrum of socialist and capitalist, borrowing different quantities of ideas from both.
For instance, America has a socialized postal system, socialized school system, socialized highway network, socialized fire departments, socialized police, and a socialized army.
That doesn't make it socialism, but it doesn't make it 100% capitalist either. The question being asked here is more one of redistricting the divisions between the socialized and the private sectors of America.
For instance, America has a socialized postal system, socialized school system, socialized highway network, socialized fire departments, socialized police, and a socialized army.
That doesn't make it socialism, but it doesn't make it 100% capitalist either. The question being asked here is more one of redistricting the divisions between the socialized and the private sectors of America.
This is very true. I don't think there are any examples of pure capitalism.
I don't typically speak of pure capitalism when discussing the topic. Most of the time when people say they want to change away from capitalism they are actually talking about the current system. Often when they talk about ending capitalism they are actually talking about slightly increasing the mix of socialism.
But there is a strong sentiment that our current system is inherently broken due to the level of capitalism it currently contains. I would argue that it's the best system we've ever had. By that I mean the mix of capitalism and socialism we have in the western world. All the varying mixes that exist have been wild successes compared to any historical systems. Also noting that changing too fast could be dangerous.
Much of the language is used inaccurately, something I'm very guilty of, so it is hard to assess what change people are hoping to achieve. I've heard a scary amount of poorly thought out claims that we have a suitable replacement for our current mix of capitalism and socialism. I'm afraid that could lead to similar problems that the Soviets faced. I could be wrong so all I call for is caution.
I don't typically speak of pure capitalism when discussing the topic. Most of the time when people say they want to change away from capitalism they are actually talking about the current system. Often when they talk about ending capitalism they are actually talking about slightly increasing the mix of socialism.
But there is a strong sentiment that our current system is inherently broken due to the level of capitalism it currently contains. I would argue that it's the best system we've ever had. By that I mean the mix of capitalism and socialism we have in the western world. All the varying mixes that exist have been wild successes compared to any historical systems. Also noting that changing too fast could be dangerous.
Much of the language is used inaccurately, something I'm very guilty of, so it is hard to assess what change people are hoping to achieve. I've heard a scary amount of poorly thought out claims that we have a suitable replacement for our current mix of capitalism and socialism. I'm afraid that could lead to similar problems that the Soviets faced. I could be wrong so all I call for is caution.
> Much of the language is used inaccurately, something I'm very guilty of, so it is hard to assess what change people are hoping to achieve.
This is very well said, and I think there's an awful lot of public perception manipulation by entrenched interests that's contributing to that.
This is very well said, and I think there's an awful lot of public perception manipulation by entrenched interests that's contributing to that.
They suppress competition, they can’t prevent it.
It costs more over time to undermine competitors via loss pricing than to compete.
It costs more over time to undermine competitors via loss pricing than to compete.
I feel like this article is capitalizing (lol) on a trendy hatred of capitalism, rather than a serious takedown of "the intellectual justifications for capitalism." Capitalism isn't anti-government libertarianism! Capitalism's whole ethos is based on rule of law — especially property law — and competition; anti-competitive monopolies with near-infinite money that can commit intellectual property theft without meaningful penalty aren't capitalist. I don't know what they are. Broken, certainly.
This just isn't true. No firm wants to enter a perfectly competitive market, because the expected long-run profit margin is zero. If a firm loves competition, they are free to increase competition in their market at any time by giving away their patents, copyrights, tech, etc. They don't do these things because they don't want competition.
Just because a bunch of people claim to love competition doesn't make it true.
Regarding the rule of law, some pretty disgusting things have been done for private investment (i.e. capitalism.) Banana republics come to mind.
This "broken capitalism" claim is essentially a no-true-Scotsman fallacy. Real-world capitalism didn't play out like the perfect scenario in our heads, so blame it on "broken capitalism" or "crony capitalism". In truth, the system yields flawed results like everything else.
Regarding the rule of law, some pretty disgusting things have been done for private investment (i.e. capitalism.) Banana republics come to mind.
This "broken capitalism" claim is essentially a no-true-Scotsman fallacy. Real-world capitalism didn't play out like the perfect scenario in our heads, so blame it on "broken capitalism" or "crony capitalism". In truth, the system yields flawed results like everything else.
> private investment (i.e. capitalism)
I think this definition is the root of our disagreement. Private investment doesn't necessarily equate to capitalism. Even feudal lords spent their own money on their own property, but that doesn't mean they were operating in capitalist economies. It stretches the definition of capitalism to the point of basically irrelevance to use it to refer to literally anything done for personal profit.
Wikipedia has a pretty good definition of capitalism:
"Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor."
https://en.m.wikipedia.org/wiki/Capitalism
Notably, "competitive markets" and "recognition of property rights" are exactly the issues the article brings up with Amazon: there is little competition, and Amazon has (thus far) been able to steal intellectual property with impunity. This article is not exactly a takedown of capitalism! Its complaint is that Amazon is violating central characteristics of capitalism, and that it would prefer Amazon to not violate them.
I think your other point re: firms requiring profit motive and thus competition being impossible, is a little bit of a strawman. No one said perfect competition is something that markets have at a single point in time: just that monopolies without any option for competition are antithetical to a functional capitalist economy, and that capitalist markets are defined by the ability for firms to compete with each other. I think most economists would agree with me on that point.
I think this definition is the root of our disagreement. Private investment doesn't necessarily equate to capitalism. Even feudal lords spent their own money on their own property, but that doesn't mean they were operating in capitalist economies. It stretches the definition of capitalism to the point of basically irrelevance to use it to refer to literally anything done for personal profit.
Wikipedia has a pretty good definition of capitalism:
"Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, a price system, private property and the recognition of property rights, voluntary exchange and wage labor."
https://en.m.wikipedia.org/wiki/Capitalism
Notably, "competitive markets" and "recognition of property rights" are exactly the issues the article brings up with Amazon: there is little competition, and Amazon has (thus far) been able to steal intellectual property with impunity. This article is not exactly a takedown of capitalism! Its complaint is that Amazon is violating central characteristics of capitalism, and that it would prefer Amazon to not violate them.
I think your other point re: firms requiring profit motive and thus competition being impossible, is a little bit of a strawman. No one said perfect competition is something that markets have at a single point in time: just that monopolies without any option for competition are antithetical to a functional capitalist economy, and that capitalist markets are defined by the ability for firms to compete with each other. I think most economists would agree with me on that point.
I wasn't using an overly broad definition of capitalism; I was using the definition you bring up here.
Moreover, whether or not a market is perfectly competitive is irrelevant. The point is that no firm wants any competition, and in order to maximize profit they must actively fight competition, the very thing they claim to value.
What we have here is a fallacy of definition. If we define capitalism to be a system with no negative consequences (such as monopoly), then any real-world system with these negative consequences is, by definition, not capitalism. Thus we've protected the system that is precious to us. People do the same thing with communism ("That isn't real communism because..."). Economists don't really weigh in on what capitalism is very often; they discuss things in terms of markets, and any intro microecon class will tell you that monopolies occur in markets pretty frequently, with or without government intervention. Monopolies, competitive monopolies, natural monopolies.... These are all discussed early on in an econ program. Your capitalism definition is designed to make it infallible, and economists don't really use it.
Source: I have an MA in econ.
Moreover, whether or not a market is perfectly competitive is irrelevant. The point is that no firm wants any competition, and in order to maximize profit they must actively fight competition, the very thing they claim to value.
What we have here is a fallacy of definition. If we define capitalism to be a system with no negative consequences (such as monopoly), then any real-world system with these negative consequences is, by definition, not capitalism. Thus we've protected the system that is precious to us. People do the same thing with communism ("That isn't real communism because..."). Economists don't really weigh in on what capitalism is very often; they discuss things in terms of markets, and any intro microecon class will tell you that monopolies occur in markets pretty frequently, with or without government intervention. Monopolies, competitive monopolies, natural monopolies.... These are all discussed early on in an econ program. Your capitalism definition is designed to make it infallible, and economists don't really use it.
Source: I have an MA in econ.
Yeah, I think we're debating the difference between "markets" and "capitalism." Capitalism, as opposed to other systems that also have markets, relies on property rights and competition. Feudalism also had markets; you can't just say anything with a market is capitalist. It doesn't meaningfully define anything — I guess, other than not being communism.
Econ does concern itself more with "markets" as opposed to "capitalism" (and hey, I've taken plenty of college econ classes, thanks), but that's because economics is the study of markets, not the study of capitalism.
"Your capitalism definition is designed to make it infallible"
*Wikipedia's capitalism definition, FTFY. I don't think their definition is designed to make capitalism seem "infallible." It's the consensus view of capitalism designed to distinguish it from other systems that also include markets. There are plenty of scholarly references for the definition linked in the page, written by notable economists (who have PhDs in economics).
Econ does concern itself more with "markets" as opposed to "capitalism" (and hey, I've taken plenty of college econ classes, thanks), but that's because economics is the study of markets, not the study of capitalism.
"Your capitalism definition is designed to make it infallible"
*Wikipedia's capitalism definition, FTFY. I don't think their definition is designed to make capitalism seem "infallible." It's the consensus view of capitalism designed to distinguish it from other systems that also include markets. There are plenty of scholarly references for the definition linked in the page, written by notable economists (who have PhDs in economics).
This article is a great example of the straw man fallacy. The article pretends that there is an "intellectual justification" for capitalism that doesn't recognize the need to break up monopolies to preserve the free market. I think that recognition is quite common even among "hardcore libertarians".
The article makes good points in favor of a government intervention of some kind against Amazon. But the headline and thesis is overwrought, unsupported clickbait.
(For what it's worth, in my opinion, the lack of government action in this area is good evidence that no one in power in the US right now gives two shits about the intellectual justification for capitalism).
The article makes good points in favor of a government intervention of some kind against Amazon. But the headline and thesis is overwrought, unsupported clickbait.
(For what it's worth, in my opinion, the lack of government action in this area is good evidence that no one in power in the US right now gives two shits about the intellectual justification for capitalism).
Capitalism has had many justifications over its two to four centuries of existence. The justifications you refer to held currency starting around the time of the trust busters, but that was a new idea then (and apparently not universally held since Reganomics came into fashion when the focus of anti-trust became consumer cost rather than market concentration).
I think you would be hard-pressed to find any justification for capitalism that doesn't include:
1. Competition, and
2. Property rights.
This article does effectively slam Amazon for violating both of those capitalist tenets. But it doesn't effectively say anything about capitalism; the whole problem with Amazon is that it's violating capitalist tenets by being an anti-competitive monopoly, with enough power that it can steal intellectual property with impunity. If there was meaningful competition, and Amazon was forced to respect intellectual property rights... At least as presented by this article, there wouldn't seem to be a problem.
Capitalism isn't anti-government — it relies on governments so that businesses don't have their property stolen.
Amazon's business practices do indeed suck though, and seem (to me) to be illegal. The US government should step in forcefully.
1. Competition, and
2. Property rights.
This article does effectively slam Amazon for violating both of those capitalist tenets. But it doesn't effectively say anything about capitalism; the whole problem with Amazon is that it's violating capitalist tenets by being an anti-competitive monopoly, with enough power that it can steal intellectual property with impunity. If there was meaningful competition, and Amazon was forced to respect intellectual property rights... At least as presented by this article, there wouldn't seem to be a problem.
Capitalism isn't anti-government — it relies on governments so that businesses don't have their property stolen.
Amazon's business practices do indeed suck though, and seem (to me) to be illegal. The US government should step in forcefully.
I would argue the article correctly points out that the tendency of capitalism via the prism of Amazon is to concentrate wealth and power and undermine the justifications that it grew out of.
This article sort of half-made sense until I read this part:
"But corporations all depend on the state and their workers to survive, and thus there are ways to seize it, democratize it, and keep it in public hands where it belongs"
MMhh.. excuse me? Says who? Stalin?
Lately there seems to be a strong, veiled and (dare I say) coordinated effort to put down capitalism in the US. Has everyone forgotten what built this great country in the first place?
"But corporations all depend on the state and their workers to survive, and thus there are ways to seize it, democratize it, and keep it in public hands where it belongs"
MMhh.. excuse me? Says who? Stalin?
Lately there seems to be a strong, veiled and (dare I say) coordinated effort to put down capitalism in the US. Has everyone forgotten what built this great country in the first place?
> Lately there seems to be a strong, veiled and (dare I say) coordinated effort to put down capitalism in the US. Has everyone forgotten what built this great country in the first place?
Sure. In rough historic order:
Slavery, genocide of the natives and theft of their land, unprecedented consumption of fossil based fuels, invention of consumerism as a culture, untouched industrial capacity after WWII and massive brain drain from developing countries.
Which ones were you referring to exactly?
Sure. In rough historic order:
Slavery, genocide of the natives and theft of their land, unprecedented consumption of fossil based fuels, invention of consumerism as a culture, untouched industrial capacity after WWII and massive brain drain from developing countries.
Which ones were you referring to exactly?
Those are definitely things that helped build this country, but one of them - massive brain drain from developing countries - (and by the way, you missed from Soviet countries) - is based on the fact that there's something appealing about living here. Some folks like to call that freedom, or a set of ideals about how we structure things.
I agree with the parent comment that lately people are really down on the US and capitalism, and others are super positive about it in unthinking response. Capitalism has provided a lot of amazing things - avocados are always available! - but also done damage and been destructive.
Similarly, America was the experiment and inspiration for modern democratic/republican governance, and a major component in the beginning of more freedom for more people, while also having been built on slavery, the killing of natives, massive environmental devastation, and other terrible things.
The world is really complex, and simplifying things to good or evil tends to lose a lot of reality.
I agree with the parent comment that lately people are really down on the US and capitalism, and others are super positive about it in unthinking response. Capitalism has provided a lot of amazing things - avocados are always available! - but also done damage and been destructive.
Similarly, America was the experiment and inspiration for modern democratic/republican governance, and a major component in the beginning of more freedom for more people, while also having been built on slavery, the killing of natives, massive environmental devastation, and other terrible things.
The world is really complex, and simplifying things to good or evil tends to lose a lot of reality.
A lot of folks, including Nathan Robinson, seem to have a weird idea that proponents of capitalism think that it creates freedom. I think a more accurate way of thinking about it is that freedom creates capitalism. Black markets are a sign of the imperfect control of people, for example.
But as for what we should do about Amazon, there's a response that is more principled than just breaking up Amazon because they're huge, and that acknowledges the massive failure in history of socialist control of things. (Sorry, socialists - governments don't run things well, with exceptions that are interesting and worth study, but not yet repeatable)
We need to ban companies from both creating and distributing if they're at a certain size. This worked really well in a bunch of states for liquor laws, and would prevent the current idiocy with Netflix, Hulu, Amazon, Apple, and Disney streaming channels that have their own content. Let Netflix and whoever else wants to compete on distribution, and don't let them create their own content unless they offer it for distribution to anyone else who wants to distribute it, for standard terms.
Same with Amazon.
But as for what we should do about Amazon, there's a response that is more principled than just breaking up Amazon because they're huge, and that acknowledges the massive failure in history of socialist control of things. (Sorry, socialists - governments don't run things well, with exceptions that are interesting and worth study, but not yet repeatable)
We need to ban companies from both creating and distributing if they're at a certain size. This worked really well in a bunch of states for liquor laws, and would prevent the current idiocy with Netflix, Hulu, Amazon, Apple, and Disney streaming channels that have their own content. Let Netflix and whoever else wants to compete on distribution, and don't let them create their own content unless they offer it for distribution to anyone else who wants to distribute it, for standard terms.
Same with Amazon.
> Amazon is becoming a giant private government with the power to direct the economy.
Nope. This is nonsense. Doesn't really even deserve a response.
> Amazon Destroys the Intellectual Justifications for Capitalism
Uh no.
"Current Affairs Magazine Operates Prison's Run By Slave Labor in Third World Countries and has Destroyed Democracy"
See how that works. You can just string words together that aren't true with no consequences. The fact that someone has strung those words together doesn't make it true.
This is garbage journalism.
Nope. This is nonsense. Doesn't really even deserve a response.
> Amazon Destroys the Intellectual Justifications for Capitalism
Uh no.
"Current Affairs Magazine Operates Prison's Run By Slave Labor in Third World Countries and has Destroyed Democracy"
See how that works. You can just string words together that aren't true with no consequences. The fact that someone has strung those words together doesn't make it true.
This is garbage journalism.
Can you maybe expand on that? Why aren’t those words true?
Make a set of "The Intellectual Justifications for Capitalism" which is complete(you couldn't argue something has been destroyed which at best you could come up with a partial definition for, how would you know you destroyed all of it?) and that would be able to reach even an absurdly low bar of societal consensus.
It doesn't exist. My justifications would be different than many others and there is no official source on the question. The premise is nonsense.
Happy to take my downvotes for calling nonsense nonsense. It doesn't require a justification in every case.
It doesn't exist. My justifications would be different than many others and there is no official source on the question. The premise is nonsense.
Happy to take my downvotes for calling nonsense nonsense. It doesn't require a justification in every case.