AMAZON’S PREDATORY CAPITALISM
How is Amazon different from other companies?
THE FACE OF THE RESISTANCE Author Danny Caine is raising Cain about the problems he says Amazon causes
BY ED MCKINLEY
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We’ve never seen a company quite as big that does quite as much. It started as a retailer and then expanded into a third-party online retail platform. Now, it’s into home security video surveillance and web hosting. I see a lot of parallels with Walmart and its rise in the ‘90s and its effect on small businesses. But from where I’m sitting, Amazon is a much bigger threat than Walmart ever was simply because of how big it is and how many things it has its fingers in. Amazon sometimes sells at a loss. What’s the strategy behind that?
They look to catch customers in a flywheel. You get hooked into Amazon products, and you just keep spinning around within their ecosystem. You’ve got a Prime subscription so that’s where you get your video streaming and where you get your groceries. That’s where internet advertising is targeted to you, and the Ring Video Doorbell is owned by Amazon. You just keep spinning around that flywheel, and Amazon is collecting more and more data about you. That makes it easier and easier for them to extract money from you. They also say they’re driven by customer obsession. That doesn’t mean they’re obsessed with customers—it means they want their customers to be obsessed with them. One way to get people onto the flywheel is with really cheap retail goods and shipping that’s very fast and appears to be free. So
they’re selling a book at a loss. When I buy a hardcover book from a publisher for my store, I pay $15 and sell it for $26.99. Amazon might sell it for $10. They’re either getting a bigger discount from the publishers, which is a problem, or more likely they’re selling it at a loss. And that’s just to get people hooked in. You’ve said that Amazon bends the rules of capitalism. How?
They’re selling at a loss to drive their competition out of business. That’s predatory pricing and it’s illegal. It’s also incredibly difficult to prove. The way government interprets antitrust law, the burden of proof for predatory pricing is extremely high, so it’s rarely prosecuted. Amazon tried to buy Diapers. com, but Diapers.com refused to agree to a deal. So Amazon dropped all of its prices on competing products, and Diapers.com either had to go out of business or sell to Amazon. As soon as that was resolved, Amazon raised the prices. How well does Amazon treat workers?
Well, this is a big one. Because Amazon is one of the most profitable companies in the world, other companies are going to look to Amazon for inspiration and tricks. They’re going to mimic the way Amazon handles jobs, which is not good. Next-day shipping for Prime subscribers is built upon a huge network of fulfillment centers, and the workers in those centers are facing dangerous conditions. They’re pushed to incredible quotas and expected to maintain a pace they can’t hope to achieve. They’re working 12-hour shifts with the feeling that they can never catch up. The grueling effect on mind and body makes Amazon fulfillmentcenter work twice as dangerous as warehousing industry peers, and Amazon workers are twice as likely to get injured as workers in other
PHOTOGRAPHS: COURTESY DANNY CAINE
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ots of people complain about Amazon, but Danny Caine is doing something about it. Caine, a poet and the owner of The Raven Book Store in Lawrence, Kansas, is the author of the book How to Resist Amazon and Why. He sat down with Luckbox to detail what he sees as problems with the giant retailer and tech company.
Luckbox | June/July 2021
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5/13/21 10:13 PM
