"There is danger from all men. The only maxim of a free government ought to be to trust no man living with
power to endanger the public liberty." - - - - John Adams

Wednesday, June 21, 2017

Should we break up Amazon and Google?

We Need A Teddy Roosevelt

  • Corporations and their drive to create monopolies not only allows price fixing but creates super-powerful political powers who buy and sell members of Congress.
  • Pure Capitalism says allow business to do what it wants.  But what if 90% of pharmacies were controlled by a single multinational corporation? A company so huge they could sell below cost in order to crush any new company entering their market.

(Fast Company)  -  “Amazon just bought Whole Foods,” my friend texted me seconds after the announcement of the proposed acquisition. “It’s over. The world.”
This unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force. Surely the company, which now generates 30% of all online and offline retail sales growth in the United States, and already controls 40% of internet cloud services, has reached too far. 
Whatever you may think of Jeff Bezos, and whether or not antitrust regulations can justifiably be applied to a company whose expansion doesn’t raise but actually lowers costs for end consumers, may be beside the point. Many of us get that something is amiss, but are ourselves so deeply enmeshed in the logic of last century’s version of free-market industrial capitalism that we can’t quite bring ourselves to call this out for the threat it poses to our markets, our economy, and even our planet.

The reason why monopolies were broken up in an industrial economy was that they tended to gain control over the platforms through which their products were distributed. The biggest oil company ends up controlling shipping and refineries, the biggest airline controls too many gates, and the biggest phone company controls the wires.

But in a digital economy, the platform is the business. Netflix content sells its platform. Apple’s devices sell its supposed “ecosystem.” Amazon’s book business, like Uber’s cab business, was just an easy foothold—the low-hanging fruit of an existing but inefficient marketplace—through which to establish a platform monopoly. From that beachhead, the company then pivots to other verticals.

The problem is, when an existing market is merely a means to another end, the company doesn’t consider the long-term effects of its actions. Amazon treated the book industry the same way companies like Walmart once treated the territories into which they expanded: Use a war chest of capital to undercut prices, put competitors out of business, become the sole employer in the community, turn employees into part-time shift workers, lobby for deregulation, and effectively extract all the value from a given region before closing up shop and moving to the next one.

It’s not that internet founders are somehow more evil or rapacious than their forebears. It’s simply that when companies are platforms, survivability and scalability amount to the same thing. Just as winner-takes-all network effects lead to just one Taylor Swift and millions of penniless artists, these same dynamics promote the establishment of platform monopolies like Amazon.

Read More . . . .

Teddy Roosevelt vs the Constitution
The pure Capitalists want zero government while Communists
 want 100% government control.
Teddy found a middle way.  Break up monopolies to
actually allow free market competition.


Anonymous said...

well said

Anonymous said...

better not , if foreign Amazons or Googles don`t break too !!!