Economy & Business

On Amazon and the Tech Monopolies

Amazon CEO Jeff Bezos onstage during a product launch in 2011. (Reuters photo: Shannon Stapleton)
The technology that has amplified the private citizen also amplifies the corporate executive, the tech-savvy oppressor, and the billionaire dilettante with political aspirations.

Everybody hates Amazon. It’s kind of weird.

Donald Trump, as a candidate, threatened to bring antitrust actions against Amazon and accused the Internet retailer of dodging taxes, and as president Trump has taken a special interest in the company’s CEO, Jeff Bezos, who also owns the Washington Post, which offends Trump by reporting on his antics from time to time. “Believe me, if I become president, oh, do they have problems,” he said. “They are going to have such problems.” Farhad Manjoo, writing in the New York Times, said Amazon’s behavior during its dispute with book publisher Hachette “is confirming its critics’ worst fears and it is an ugly spectacle to behold.” Tony Schwartz blasted Bezos for having an overly aggressive management style marked by periodic angry outbursts. (Tony Schwartz is the man who actually wrote Donald Trump’s Art of the Deal.) Paul Krugman insists Amazon “has too much power, and it uses that power in ways that hurt America.” Krugman also suggested that Amazon was scheming to help Republicans’ electoral chances. The company has been the target of boycotts since the 1990s, and it has been criticized for its handling of taxes, for selling and not selling certain items, and for — incredibly enough — not making enough of a profit. Junie Hoang, an actress you’ve never heard of (Hood Rats 2: Hoodrat Warriors), once sued the company for revealing her age on IMDb, which Amazon owns. Whole Foods shoppers, who tend to be as crunchy in their political preferences as in their produce preferences, have lamented Amazon’s acquisition of the high-end grocery chain, perhaps unaware that Bezos’s politics are well to the left of those of Whole Foods’s libertarian founder, John Mackey. Daniel Ellsberg of the Pentagon Papers pronounced himself “disgusted by Amazon’s cowardice and servility” for kicking WikiLeaks off of its Web-hosting service.

There was some eye-rolling in the nation’s capital when Bezos acquired two large Kalorama properties — a 27,000-square-foot museum complex, in fact — which he is converting into what will be Washington’s largest private residence, just around the corner from the Obamas and the Kushners and surrounded by embassies. “The home is expected to be an East Coast pied-à-terre for the family,” the Washington Post daintily reported, “allowing him to avoid hotel bills.” As though Jeff Bezos, net worth $81 billion, a man who for the sake of convenience just bought the estate next to his estate in Beverly Hills — where he does not live, his main home being in the suburbs of Seattle — would worry about paying for a couple of rooms at the Holiday Inn.

If Donald Trump had Jeff Bezos’s money, he’d die of priapism.

Everybody hates Amazon — except its customers: Its sales have more than doubled just since 2012, and its gross income has more than trebled during the same period. With the company being oriented toward long-term expansion rather than near-term profit, Amazon’s net income is famously low, and it was losing money on paper as late as 2014; in 2016 its net income was $2.4 billion. But the shareholders aren’t complaining: Shares that were trading for around $250 in 2013 are approaching $1,000 today. Depending on what the market is doing at any given closing bell, Jeff Bezos is either the world’s wealthiest man or near the top of the list. Millions of consumers are delighted by what Amazon does and how it does it — same-day delivery! Alexa! video streaming! — and are looking forward to further innovations.

There are a few holdouts: New York City’s Sandinista mayor, Bill de Blasio, a Luddite and an anti-capitalist, has never used the site. “I believe in bricks and mortar,” he told the New York Daily News. “I personally just like the experience of going into the store, choosing something myself, having the physical opportunity to see what the thing looks like.”

De Blasio is at the moment working very diligently to convince Amazon to choose New York City as the site of its new headquarters.

It isn’t just Amazon that brings out the fear and loathing. The quadrumvirate of Google, Amazon, Facebook, and Apple — GAFA, as they are collectively known — is a source of broad anxiety felt from the anti-capitalist Left, which fears that the corporations that dominate commerce will come to dominate culture and politics, to the libertarian Right, which has concerns about privacy and fears that freedom of expression may be threatened by progressive-leaning corporate bosses who seek to smother conservative content and repress conservative views on social-media platforms. Franklin Foer, the former editor of The New Republic, has just published an anti-GAFA jeremiad titled “World without Mind: The Existential Threat of Big Tech.”

Existential threat?

Foer is entirely serious about that. He believes that firms such as Facebook and Google are jockeying not just for market share but for mind share, that their ambition is nothing less than to redefine — and in the process deform — what it means to be human. Foer’s argument is at times fascinating, though what scandalizes him most isn’t the ruthlessness of highly competitive technology companies but their ambition: “Where do these companies begin and end?” he asks.

Larry Page and Sergey Brin founded Google with the mission of organizing all knowledge, but that proved too narrow. Google now aims to build driverless cars, manufacture phones, and conquer death. Amazon was once content being “the everything store,” but now produces television shows, designs drones, and powers the cloud. The most ambitious tech companies — throw Facebook, Microsoft, and Apple into the mix — are in a race to become our “personal assistant.” . . . More than any previous coterie of corporations, the tech monopolies aspire to mold humanity into their desired image of it. They believe that they have the opportunity to complete the long merger between man and machine — to redirect the trajectory of human evolution.

Critics are right to detect a strong whiff of get-off-my-grass-ism in Foer’s argument, and of course his personal experience as editor of The New Republic, which was acquired, and ruined, by Facebook co-founder Chris Hughes, is a splinter in his mind. He began his journalism career as a Microsoft employee and now writes for The Atlantic, the venerable magazine founded by Ralph Waldo Emerson and recently acquired by Laurene Powell, the widow of the late Steve Jobs, who was the very archetype of the hippie-capitalist-utopian tech guru whose machinations keep Foer up at night.

While there is much in World without Mind that is over-the-top and some that is ill considered, Foer is right to look west: The most interesting and consequential conversations being had in the United States in 2017 are not happening in Washington — they are happening in California, which extends beyond its formal borders to include parts of Washington State, a sliver of Austin, and about five blocks in New York City.

No doubt Bezos dreams of ever larger and more shockingly ambitious things for Amazon.

Part of the anxiety that Very High Tech induces in Foer and others is simply the mind-boggling scale of its reach and the capital it can command. Of course Google is getting into a dozen businesses almost entirely unrelated to search, its core business. What the heck else is Google going to do with all that money? Of course men such as Jeff Bezos will acquire high-prestige/low-return businesses such as the Washington Post — owning a newspaper (if you can afford it!) is a lot more fun than playing golf or collecting old sports cars.

No doubt Bezos dreams of ever larger and more shockingly ambitious things for Amazon, but does anybody really think he is scheming to make himself, personally, another $1 billion or another $5 billion or another $10 billion? The quality-of-life returns on net worth exceeding the first couple of billion diminish rapidly. (“The first million is the hardest,” the rapper Drake once boasted on Twitter, only to be answered by oilman T. Boone Pickens: “The first billion is a helluva lot harder.” That’s why Twitter exists.) Like Jeff Bezos, Steve Jobs was known as demanding, competitive, and prone to angry outbursts, but the genuine pleasure — the thrill — he enjoyed from midwifing cool stuff into existence was impossible to miss. That joy is a big part of the magic that makes Apple Apple, and that watch-me-go exhilaration is what exnihilated Google and Facebook into existence. Billionaires don’t work 80 hours a week because they are driven by mere greed. They are driven by something far more powerful. Franklin Foer thinks that this force is hubris, the desire to ascend, godlike, to remake man in their own image. There is hubris in the mix, but there is something else there, too: love.


Foer traces the culture of today’s Silicon Valley back to Stewart Brand, the hippie impresario who founded the Whole Earth Catalog and brought a bit of discipline and business sense to Ken Kesey’s psychedelic doings with the Merry Pranksters. Brand’s mix of LSD-inspired spaciness, Native American mysticism, and countercultural distaste for men in gray flannel suits made him perfectly suited to be the poet of the computer age. “Engineers across Silicon Valley revered Brand for explaining the profound potential of their work in ways they couldn’t always see or articulate,” Foer writes. Whereas many of those 1960s rebels saw the computer as a symbol of bureaucracy and control, a product of the ultimate gray-flannel-suit corporation, IBM, Brand saw the computer’s potential as an instrument of liberation — and transformation. Foer quotes from an early issue of the Whole Earth Catalog:

We are as gods and might as well get good at it. So far, remotely done power and glory — as via government, big business, formal education, church — has succeeded to the point where gross defects obscure actual gains. In response to this dilemma and to these gains a realm of intimate, personal power is developing — power of the individual to conduct his own education, find his own inspiration, shape his own environment, and share his adventure with whoever is interested.

The Whole Earth Catalog, Brand said, had as its mission to advertise the tools and instruments that would make that liberation possible. And the technology industry has in a real sense more than lived up to the hype of the early days of the World Wide Web. Individuals have been radically empowered: You really can be your own publisher — and, as Dan Rather learned, your own media critic, bypassing the usual gatekeepers and ombudsmen in the pursuit of direct and immediate accountability. You can sit in on the best university lectures, enjoy the best music and film immediately, communicate without friction, and, in many occupations, do the work of 20 or 100 men. Wikipedia, which sounds like a terrible idea on paper, has proved invaluable. Technology has amplified the individual beyond the dreams of 1950s science fiction. The actual limitation of the moment isn’t a question of the technology but of its users: Most people, as it turns out, don’t want to investigate human-rights abuses in Burma or audit computer-science lectures at MIT: They like porn and celebrity news and arguing about dumb things with dumb people on Twitter. The human being is and has always been the brake on the utopian tendency. It is not the structure of the technology industry or the character of its executives that has the homogenizing effect that many GAFA critics fret about — it’s the consumers themselves.

But some people are more ambitious than others, and the technology that has amplified the private citizen also amplifies the corporate executive, the tech-savvy oppressor, and the billionaire dilettante with political aspirations. Stewart Brand was not the first to come along with the offer that “you shall be as gods.” That was the promise of Prometheus, of course, and, most prominently, of the Serpent.

The backlash against GAFA is partly the usual lamentation of the nouveau riche by certain envious people, usually writers and academics, who think they’d do better things with all that money. There is the usual fear of change, the nationalist suspicion of those whom Stalinists and Trumpkins sneer at as “rootless cosmopolitans,” and the traditional lefty paranoia about corporate power. Never mind that the big winner from Amazon’s success has been consumers while the big loser has been Walmart, which was the Left’s favorite boogeyman until the day before yesterday — new concentrations of private power are always a terror to the Left. Foer refers to Google and Facebook as “knowledge monopolies,” which he characterizes as “a new style of firm.” But that’s not quite right. The nature of the firm has not changed all that much, and the radical ways in which corporations are changing (diminishing corporate lifespans, outsourcing of secondary business processes, etc.) are if anything more relevant to non-GAFA companies than to the technology titans that command Foer’s attention. What’s changing isn’t the character of the corporation but the character of the market.

The traditional case against monopolies is that they are bad for consumers. But some technology companies, especially social-media concerns such as Facebook, complicate that, because they become more valuable to consumers the more they dominate the market. Facebook is like the telephone. One telephone user finds it not valuable at all — there’s nobody to call. Two telephone users find it of limited usefulness. A network of billions of users makes the telephone immeasurably more useful. Peter Thiel, founder of PayPal and an early investor in Facebook (who has written in these pages), says that he likes to invest in monopolies, but Amazon, Apple, Google, and Facebook are not monopolies in the traditional sense, leveraging their market power to squeeze more out of consumers via higher prices. They mainly do the opposite. “We measure an antitrust violation by looking at consumer harm — not harm to competitors,” Penn law professor Herbert Hovenkamp told PolitiFact. That’s one reason the Trump administration, in spite of the president’s big talk, probably won’t move against Amazon: There isn’t a case. When consumers begin to feel the bite, conventional economic theory goes, then competition will step in and set things right.

But what if the bite isn’t felt? We don’t write a check to Facebook or Google once a month. We compensate them in other ways — attention must be paid and privacy surrendered and personal data sliced and repackaged and traded like a subprime mortgage. The censors of the Catholic Church helpfully published the Index Librorum Prohibitorum, bringing some much-needed transparency to the process of suppressing thought: The list of banned books was plain as day. Amazon can just disappear a book if it so chooses or, if it’s in a devious mood, as it was during the Hachette dispute, it can monkey with prices, product placement, and delivery times to quietly hobble a work — or an idea. Many unreflective people cheered when the nation’s Web-hosting companies decided to dump a number of neo-Nazi websites, effectively removing their material from the online public square (which is the public square that matters). A lot of conservatives were a little queasy, though: The same people who support banning neo-Nazi communications also believe that everybody to the right of Hillary Rodham Clinton is a neo-Nazi, that criticism of transgender-rights efforts is “hate speech” that should be prohibited, that sermons endorsing the traditional view of marriage should be — and could be — a crime.

Of course social media, mobile phones, and other technologies make it easier to organize a riot in Berkeley, but riots have been around for a long time.

But that’s an old problem, too. Corporate groupthink and institutional closed-mindedness are not products of technology’s effect on culture, and neither is the “social-justice warrior” mob mentality behind efforts to exclude certain kinds of ideas and voices from the public square. If anything, those habits are worse in the physical world — especially on college campuses — than they are in the online space. Of course social media, mobile phones, and other technologies make it easier to organize a riot in Berkeley, but riots have been around for a long time. Political violence is as old as politics itself (older, probably). The illiberal impulse has always been strong, even among academics, corporate leaders, and other highly educated people of whom one might expect the opposite. The conservative movement was obliged to build an entire intellectual infrastructure from the middle of the 20th century onward because the suffocating progressive consensus of the time dismissed rightward thinking as nothing more than “irritable mental gestures,” as Lionel Trilling put it. While the unmediated mobs of Twitter and Facebook have surely contributed to the lowering of our public discourse in important ways, people trafficking in genuinely unpopular ideas have, thanks to the very technology platforms that so concern Foer and others, never been in a stronger or more secure position. The headwinds against free speech are mainly cultural rather than technological. Unhappily, the illiberal culture of the college campuses and the utterly confident ignorance associated with it has found a place in Silicon Valley, too.

Some gods are more equal than others.


Amazon & Whole Foods Merger: Why?

Amazon Monopoly Fears are Misguided

How to Break Silicon Valley’s Anti-Free-Speech Monopoly

— Kevin D. Williamson is National Review’s roving correspondent. This article originally appeared in the October 16, 2017, issue of National Review.


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