AMAZON’S PREDATORY CAPITALISM
LUCKBOX LEANS IN WITH SCOTT GALLOWAY What do you say to those who believe Amazon is winning at capitalism?
The fact that Amazon is now “too big to fail” is less a testament to the firm simply “winning at capitalism” than it is to our country’s outdated antitrust laws and lax enforcement. Don’t get me wrong: Amazon is an extraordinarily innovative company and a world-class operator. Jeff Bezos is one of the strongest CEOs we’ve ever seen. But scale and wealth ultimately accrue advantages that distort the functioning of the free market. Healthy capitalism is defined not just by profits, but also by real value creation, which relies on having stringent checks on monopolies so companies like Amazon can’t just continue amassing wealth by exploiting their own dominance. For those who really feel Amazon is being treated “unfairly” (which it isn’t), remember: Antitrust isn’t punishment, it’s oxygenation. After Ma Bell was broken up in the early 1980s, the spinoff companies grew faster than the market, and we kicked off a digital communications revolution that is still unfolding today. In your most recent book, Post Corona, you criticize what you view as Amazon’s abuse of its power. What aspects of Amazon’s influence concern you most?
One of Amazon’s most gangster moves is turning expenses into revenue streams—for example, the firm now sells its data center to other companies as a service. This ability, combined with the
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company’s sheer wealth and data on its customers, means that Amazon can afford to take massive, unlimited risks in creating new offerings (ahem, healthcare), which will only make the company more indispensable to Americans and the world and, therefore, more difficult to regulate. Given Amazon’s significant lobbying efforts, can regulators and Congress create and enforce meaningful antitrust legislation? How would you assess the political will of both parties to come together on this?
President Joe Biden has given us reason to be optimistic, putting forward Lina Khan and Tim Wu for important roles. Senator Amy Klobuchar, arguably the most effective member of Congress, is laser-focused on this issue, along with Warren and others. Plus, big tech has become a sort of common enemy across party lines. Major lawsuits against Facebook and Google were launched by the Trump administration. So, my hope is that there’s enough political and cultural pressure to put real checks on big tech’s power. That said, writing and implementing laws takes time, so any change will be slower than most people would like. We need to keep in mind that the problem of antitrust—really, the problem of concentrated power—has been festering for decades and goes beyond Amazon and even beyond big tech. Too many industries have been allowed to consolidate for too long. There’s a lot to be done.
PHOTOGRAPH: COURTESY SCOTT GALLOWAY
Scott Galloway is a speaker, podcaster, entrepreneur, best-selling author and instructor of brand and marketing strategy at the New York University Stern School of Business. His books include The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google ; The Algebra of Happiness, and Post Corona: From Crisis to Opportunity. Galloway has been calling for the breakup of the big tech companies since 2017. Luckbox reached out to him after watching him rail against “crony capitalism” in a recent appearance on Real Time with Bill Maher. Here, he shares his latest thoughts on Amazon.
Luckbox | June/July 2021
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