I wanted to buy some last minute supplies for a week-long hike and I stopped by a locally-owned Army Surplus store and a national discount chain. The brick-and-mortar stores in my city did not have what I wanted. I stomped home in frustration and ordered everything on Amazon. All of it has arrived at my door without a hitch at reasonable prices. I see this as evidence of a tipping point. The stores inventory was so depleted it seems as if they have conceded defeat to Amazon. Amazon has a pick-up store in my neighborhood. It is official, it is easier to buy virtually everything from Amazon.
I am not happy about it but I am also powerless to resist.
The article is very good in that it points out that Amazon is violating some of the most important rules of capitalism. Like price to marginal cost and aim to earn a profit on each sale. Because growth is so rewarded by the capital markets, Amazon has had no pressure to earn profits let alone distribute them to shareholders or even spread the cash around by buying back shares.
Some of the commenters have overlooked that the references to Soviet-style planning was tongue in cheek. The author is clearly aware that a private entity in charge of an entire economy is different even than a dictatorship with access to state power. The private entity does not have to act in the public interest but it also has no recourse to the coercive tools of state power.
Also important but overlooked is the contrast between the growth-oriented “unicorns” and the rest of the capitalist economy. I am a refugee from the chemical industry. I have made a study of recent quarterly reports and almost without fail the major companies are sending most of their cash flow back into investor’s pockets and not into capital spending or growth. How long can the goods producing sectors fail to spend on improved capital and labor before the system starts to implode? How long can there be a net drain of cash from these sectors? The answer is that perhaps the goods producing sector has been imploding for years; there is just enough job growth and wealth generation in the tech and service sectors to mask that implosion. And then there was offshoring to China. How long will we keep pulling these rabbits out of the hat?
