We've seen this sort of thing happen before, with Walmart. And none of these arguments worked! Walmart is big and dominant. It killed off smaller places, but people don't care because it has mostly everything and is cheap.
"This convenient good thing is actually bad!" isn't super convincing I guess....
EDIT: the ultimate irony being that Walmart/Amazon are the "ideal endgame" of market capitalism. Razor-thin margins everywhere, people get things cheap.
But how do you get cheap goods? Pressure suppliers, pay workers as little as possible. The _best case scenario_ for this economic model leads to a terrible status quo. And the only difference between this and other industries is the size of the slice of the pie the C-suite gets.
Few remember today the fear that people had of the unstoppable juggernaut that was IBM before 1990 or so.
Nobody remembers that before IBM there was RCA.
Terrible status quo? You realize that competitive pressure is what drives progress right?
Except when it doesn't. It's perfectly possible to have, for example, a bunch of scientists crazy motivated to learn the answers to their questions and all collaborate as cooperatively as possible toward that end. Adding competition could result in duplicated effort, secrecy… or to added pressure and motivation… I mean the one thing we can say is that there's no guarantee that competition is good or bad for progress, it depends on so many factors.
You can reasonably say that competition can drive progress. Your sentence implies that it is the primary (or sole??) driver of progress, and that's nonsense.
Consider Richard Dawkins' tree analogy: competition is what drives trees to become super tall, but that means they spend tons of energy doing that. Being tall in itself has no value to the trees. Yes, evolution inherently creates ecosystems around tall trees, but that doesn't mean that particular ecosystem is somehow better than other possibilities. It's more true that competition is just a fact of life rather than that we know it to be good or bad. There are tons of cases where reduced competition and increased cooperation can provide more progress.
>You can reasonably say that competition can drive progress. Your sentence implies that it is the primary (or sole??) driver of progress, and that's nonsense.
actually competitive pressure is the primary driver of evolution. Some aspects of evolution when applied to humans we call progress.
>There are tons of cases where reduced competition and increased cooperation can provide more progress.
cooperative behavior in a group evolves when it helps the group to compete, and thus it may result in increased competition between the groups. Organized human society would be an obvious example of cooperative behavior. Massive battles and wars and other atrocities inflicted by the human societies upon each other, and overall effect of the human society upon the rest of the Earth species doesn't seem to qualify as reduced competition. If anything, increased competition between organized human societies, like wars for example, has significantly sped up the tech progress as a result of the need for weapons development.
And that is key. Indeed, competitive pressure drives evolution (but isn't the strictly sole driver or the mechanism of evolution itself). The most important point is: evolution only values survival/reproduction, it doesn't value "progress".
There's a very strong argument that humans now understand evolution enough to make conscious decisions not to just play the natural competitive game. We can actually make a better world by refusing to follow that natural game. Life in competitive natural circumstances is brutal, painful, and short. We value progress as in human (and non-human even) flourishing, happiness, scientific progress, etc. and we get those things best by refusing to just act like competitive evolution but instead by rising above that. For example. we have no evolutionary benefit in caring for the least among us as an entire global human society but when we do so, it's because we recognize the ethical value.
But on an ethical level we have to acknowledge that "letting the markets do their thing" doesn't automatically reach the best result. Me having all the money and you having none is a Pareto optimum, after all.
If we could make many people's lives better at the cost of a tiny bit of progress, we should consider it.
There's also the fact that progress isn't a line. Native ads are "progress". Bail loans are "progress". Employer-based health insurance is "progress". Society can make decisions that go beyond what makes people more money.
The free market is an equilibrium that represents an average of all of our subjective needs, wants, and judgments. No individual will ever see all of its outcomes as ideal, but any attempt to 'correct' it will necessarily favor one person's values at the expense of someone else's.
A change might come at the expense of one person, but can potentially help many more.
A 50.1% majority does seem to be what we use to decide things (with some edge cases meaning sometimes you need more , but rarely do you need less). One person, one vote and all that. Systems not perfect but it's a lot better than restricting to property owners
The economic behemoths regularly change shape, form, and function and others replace them. Believing that we're at the final result of everything seems misguided at best.
That's one possible explanation. I think a much more plausible explanation was that Steve Jobs needed a significant amount of capital infusion to turn-around Apple but he needed the terms to be reasonable, which was why he leveraged on his longstanding friendship with Bill Gates even though they were (unequal) competitors at that time.
It's next to impossible to get any form of capital for a dying company, whether debt or equity without having cut-throat clauses included to protect the investors' capital.
"In a remarkable feat of negotiating legerdemain, Apple co-founder Steve Jobs got needed cash — in return for non-voting shares — and an assurance that Microsoft would support Office for the Mac for five years. Apple agreed to drop a long-running lawsuit in which they alleged Microsoft copied the look and feel of the Mac OS for Windows and to make Internet Explorer the default browser on its computers — but not the only choice."
Is the eradication of small business in favour of cheap mass delivery progress?
It probably looks like progress on Amazon's balance sheet. But I doubt everyone in the supply chain is as happy as them.
We know that that has been true in many cases, but we don't know that it always will be true in all cases. For example, I don't think there's a very good argument that competitive pressure has led to a super high quality healthcare system in the US vs. the rest of the industrialized world. Competitive pressure optimizes for certain things, and those things are not always what is best for the public. Especially, if "competitive pressure" is applied by a trust, it can cause market failures.
I don't know that Amazon is that. Maybe it will be. But, last I checked, we do still have ground floor retail. I think there's an equilibrium that we'll reach at some point, where retail space commands lower rents and has to provide a high quality shopping experience. The Best Buys of the world are done for, but the Nordstroms are not.
Allow doctors to be "certified" by private organizations, then watch how quickly medical schools change, residency allotments open up, and doctor ranks swell. As the supply of seats in medical schools and number of residencies rises, the cost of medical school will decrease. More doctors with less debt will put downward pressure on medical prices.
You may argue that quality would not increase under such competition, but I disagree. People who can't afford healthcare would be able to afford poor quality healthcare which is better than they currently enjoy. Rich people will still have vanity certified doctors. In general the cost of comparable quality healthcare would be lower.
TLDR; don't complain about disappointing results of competitive pressure in a market with very limited competitive pressure.
That's because there really isn't any competitive pressure. Not for consumers anyway. The way our healthcare is tied to our employment means we get little choice in providers ourselves, leaving that decision to our employers, who probably don't have our best interest at heart.
Up to a point. E.g. in non-equilibrium thermodynamics systems can change from negative feedback and stability to positive feedback - finally they explode and reorganise themselves. Like society or the market. Nice model, as long as we are not in the middle of such an explosion.
Google: Yahoo!
Facebook: MySpace
Tesla: The Automotive Industry
My doubt is about these economic theories. I worry about the many dangers with Amazon's burgeoning monopoly.
A lot of preconceptions may be in the way though in trying to understand this.
It doesn't make it the ultimate endgame though. For example, Marx would say then the workers rise up, institute a state with differing priorities and either provide guiding regulation or take over Amazon and increase wages. We shall see!
A decline in profit will lead to a significant hit in the stock price for Walmart.
Would I buy clothes from Amazon? No, I like to try them on first. Returning stuff by mail is a pain.
Would I buy expensive home furnishings from Amazon? No, I like to see, touch, try these things before I spend a lot of money.
Would I buy perishable groceries from Amazon? No, because deliveries happen when I'm at work and I don't want perishable food sitting in the sun for three hours on my front porch.
Do I buy toilet paper from Amazon? No, because it's easier to pick it up at the store when I'm there for something else anyway, than to get it delivered and then have to deal with disposing of the cardboard box it came in.
And with anything Amazon, I'm worried about counterfeit goods.
So what do I buy from Amazon? Inexpensive, low risk, low margin goods, and the occasional book.
> And with anything Amazon, I'm worried
> about counterfeit goods.
However:
> Would I buy clothes from Amazon?
> Would I buy perishable groceries
> from Amazon?
- If you are located in a suburban / semi-rural with more stores around, you may be less likely to use Amazon - If you are in a very rural / urban area, you may be more likely to use Amazon
Of course it'd probably be hard/impossible to find, but I'd like to be able to see a map of customers/purchases on Amazon in relation to urban and other areas.
Like clothes. The experience is invariably better in stores than online. Amazon might offer better selection but I see that as a negative; I don't want to spend 2 hours just trying to find the right pair of jeans from 2,000 variants.
I get toilet paper on Amazon subscription. I don't even need to think about buying toilet paper, it's already there when I need it.
I imagine AR might convince people otherwise.
for now.
Also, depending on where you are many people's "local super market" is Whole Foods - so yes Amazon literally "threatens" a large percentage of the US' local supermarket.
[1] http://fortune.com/2017/06/16/amazon-whole-foods-stores-loca...
They were king of the PC, imposing a Windows (and Office-) tax on every other business. They were trying to extend that dominance to the internet: Internet Explorer, CitySearch, Expedia, MSN portal, MSN Shows, MSN Messenger, you name it. They were building interactive TV, software for cars, and a mobile phone platform. For a while they were building a bill presentation and payment service. They had an e-reader platform and tried to sign up publishers for it.
You name, if it had software in it, Microsoft was trying to dominate it. They knew they were the new IBM and that IBM had stumbled, and they were paranoid about that happening to them. And here we are.
I think that 20 years ago people couldn't see a competitor coming along that could disrupt Microsoft, because they were so big and into everything.
But that's because no one foresaw the coming of the smartphone. Microsoft is still king on PCs, but the PC market has been in decline for years. Back in the early 00's no one predicted the iPhone and Android, and what a massive impact they would have on the PC market.
I would argue that Microsoft actually has two core competencies today: Office, and services (e.g. Windows/Azure). But yes, they definitely went from "king of everything" to "well enterprise still uses them" remarkably quickly.
tl;dr - Something will likely disrupt Amazon, but it's difficult for us to predict what that will be until it happens
Personally, I find AWS' interface to be super clunky. In fact, I find all of Amazon's interfaces (AWS, Amazon.com, the Amazon iOS app, to name a few) to really be poor examples of UX.
Amazon's problem is that it has a very large surface area. To competitors, that can be a feature or a bug.
And so it goes :-)
You’re assuming that at present small businesses can do this, or, at least will be able to make this transition before companies like Amazon have crowded them out of the space they operate in. I don’t think current evidence suggests that’s likely.
By analogy, small businesses right now are a bit like ants, and Amazon a child with a magnifying glass. The child and ants are categorically different, and the ants that the child chooses to melt can’t “get creative” or “adjust their model” from being the prey of a quasi-predator: they merely die, the threat is too powerful and their biology too slow to let them escape. There is such a mismatch in scale between the ants and child that even though both could, in vague terms be described as “living creatures”, and even although the ants, at their most powerful, can sting, the vast majority are merely at the child’s mercy, with the other ants only being safe by nature of being hidden.
What’s key is we’re not really seeing new small business competitors emerging who, were your model correct, should be “getting creative” and then successfully taking on Amazon locally, BUT INSTEAD we’re seeing what we expect in the unbalanced ant scenario, almost all companies and lines of business Amazon targets being taken over by them or destroyed.
Based on this, I’m inclined to believe the view you have is flawed. Not only is there not a level playing field in which getting creative would be meaningful, there isn’t even room to actually compete, were you creative, unless you’re the child’s size.
And even if you’re his size, the child is a vicious fighter.
I'm not talking about a theoretical situation in which small businesses or even large ones might get creative to compete against Amazon. This is something that's actually happening right now, and consumers are benefiting from it. Prices are going down while the expected quality of customer service is going up. Wages in retail are starting to rise to attract better talent as competition increases. Companies that used to be complacent because they owned their local markets are rethinking their strategy for the first time in a long time because they have no choice.
The ants are thriving even in the cities.
Sears ditched their convenient mail system, a differentiator at the time, for brick and mortar stores, the big box carcasses of suburbia we all loath yet yearn for.
If this was the end game of capitalism, sears would have done it 100 years ago, while Standard Oil was masquerading as the end game of capitalism.
Yes, but this time its different. Not to trivialize the threat, just to point out the irony. The capitalist pressures are such that Amazon may drop some less profitable lines, eventually, and others get to fill the void, again.
Yayaya, Bezos is smart, hired smart people, has many accomplishments, etc.
But what makes Bezos unique, his primary innovation, was convincing Wall St that marketshare was more important than quarterly results.
Not just business owners, but startup founders. Also, emphasis on the "owner" not the "maker". There's no real fetish for hackers disconnected from business ownership in the zeitgeist.
Why would a temporarily embarrassed monopolist support monopoly busting?
They'll put a lot of people out of work, which is what proponents of basic income and automation have been warning us about for a while now.
In fact, we should want this, because an Amazon that can automate a large amount of its workforce will paint the clearest picture possible because of the perception and (frankly) importance of Amazon to the US economy.
On Amazon, independent sellers are an after thought, hidden away and barely able to offer anything that distinguishes them from any other seller. On Taobao you can apply your own branding much more comprehensively and build a customer base that will follow you.
When it comes to purveyors of physical goods, Amazon has the power to reshape the fabric of our streets and neighborhoods in ways few people can fathom. Say goodbye to grocery stores and ground floor retail if they get their way. They are just smart enough to do it slowly enough where they don’t have any jarring sudden impact.
In tech, Amazon has tremendous power to put anyone they want out of business. AWS puts them in the enviable position of understanding all sorts of intimate details of everyone else’s business models. Again, they are too smart to do it too quickly.
It pains me that my generation, a generation of people who dream of being makers and business owners, don’t see the irony of the convenience of having toilet paper delivered and lower prices at Whole Foods for what they really are - a trick and a trap that strengthens a company that can and will have a real tangible negative impact on everyone’s employment and business prospects in the future if hasn’t already.