More reasons Boston should take a hard pass on Amazon
There are myriad practical reasons why Boston should walk away from the Amazon headquarters sweepstakes: an out-of-control real estate and rental market, chronic transit and traffic problems, and an overheated tech sector, which is exacerbating inequality. But the most compelling reason is that Amazon is a deeply immoral and unfathomably powerful monopoly that threatens small business, labor, publishing, retail, and even the architecture of the internet. It has no place in our great city, nor, quite frankly, anywhere else.
Amazon’s reach is so enormous—retail, cloud computing, supply chain, film, books, television, music, artificial intelligence, delivery, and even food—that it is honestly difficult to grasp it all. But a good place to start is a well-researched and damning 79-page report on Amazon by the Institute for Local Self-Reliance (ILSR), a nonprofit promoting community-based economies. It should be required reading for Boston Mayor Marty Walsh, Massachusetts Gov. Charlie Baker, and every other person in a position to promote any city as an applicant—or supplicant—for Amazon’s second headquarters.
From Amazon’s inception, CEO Jeff Bezos’ explicit aim has been the absolute destruction of all competition, until Amazon—and only Amazon—would sell everything to everybody. How he’s done that thus far is less about innovation and more about old-fashioned anti-competitive behavior and extortion.
Using tremendous amounts of capital investment, Amazon subsidized below-cost sales, losing money for nearly two decades in order to eliminate competitors—often small businesses—who could not match its prices. As market share has grown, Bezos has leveraged that power to intimidate new rivals into selling their businesses to him or participating in the Amazon Marketplace, where those businesses essentially hand over all of their proprietary knowledge to algorithms, join a race to the bottom in prices, and pay for the privilege. If they don’t, Amazon drastically undercuts them until they fold. Just ask Zappos and Diapers.com.
Because Amazon now controls an unimaginable share of online commerce—over 40 percent of the US market according to Business Insider—it has enormous influence in who sees what. In The Everything Store, Randy Miller, an executive in vendor relations, happily described to author Brad Stone the way he pressured publishers to give Amazon a better deal—raising prices, pulling titles from their recommendation engine, and promoting their competition—saying, “I did everything I could to screw with their performance.” Since an increasing number of searches are done on Amazon directly, the company can effectively ruin a book’s chances of success. That isn’t merely a question of economics, but of virtual censorship. That such clear monopolistic behavior was played out in a brazen public price dispute between Amazon and Hachette in 2014 is evidence that Amazon—correctly—feared no trust-busting reprisals.
But what about jobs? One of the misperceptions Amazon is happy to promote is that it creates jobs. In fact, Amazon is responsible for a massive net job loss in this country, estimated at 149,000 by ILSR. The migration to e-commerce has been devastating to retail, which employs 10 percent of the American workforce. The New York Times reported earlier this year that 89,000 general merchandise workers had been laid off in six months, more than are employed in the entire coal industry. The loss of brick-and-mortar shops affects not only employment but the very fabric of local communities, who have seen their main streets hollowed out. Like a lot of recent shifts, this trend hurts smaller, rural communities the most.
But Amazon never cared about labor. Bezos’ attitude is encapsulated perfectly by Mechanical Turk, Amazon’s online task outsourcing platform that turns people into meaningless, replaceable parts. Its warehouse workers are forced to work a relentless pace, kept from unionizing, forced to go through metal detectors, and paid lower than industry average wages. In 2011, Allentown’s the Morning Call famously reported that Amazon preferred to have ambulances standing by when employees collapsed from heat stroke rather than pay to air-condition its 100-degree warehouse. Of course, in the future, all of those warehouse jobs will be done by robots. My guess is the robots will get air conditioning.
In places hit by job loss, local governments are all too happy to welcome Amazon’s fulfillment centers, showering the company with incentives and tax breaks—such as the nearly $15 million offered for Fall River’s new warehouse—never once considering the fact that Amazon and companies like it are partly responsible for the economic decline of our main streets in the first place. And these governments continue to fawn over Amazon even, apparently, while suing them. The Boston Globe just reported that Massachusetts recently went to court over records regarding taxes owed by Amazon’s third-party vendors, which the company has thus far refused to provide. But that’s not surprising, since it built much of its unfair advantage over physical stores by not charging sales tax for most of its existence.
The headquarters search itself illustrates Amazon’s self-centered venality and corrupting power. The company could easily narrow down its headquarters search to a few locations and quietly engage them. Instead, Bezos launched a sweepstakes so he can watch the spectacle of over 100 municipalities, most of which have no chance, fumble all over themselves to woo the internet giant, all while wasting millions of taxpayer dollars and tens of thousands of work hours. A caller to WBUR’s On Point on Sept 20 distilled this process to its essence, calling it “a public auction to see which city in North America can give the most money to the world’s richest man.” To be fair, Bezos is only the fourth-richest man, according to Forbes. For now.
Even if Amazon were a paragon of virtue, giving taxpayer money to the world’s fourth- or fifth-most valuable company is civil malpractice. Offering it to a monopoly which manipulates markets, degrades labor, destroys small business, and controls what media America sees is utterly disgusting. Boston should redirect the prodigious handouts they are prepared to offer Amazon toward the communities who actually need and deserve it.
Mo Lotman is a writer, public speaker, and publisher of The Technoskeptic, a magazine taking a critical look at the impact of technology on society.
