President Trump continued his war on Amazon last week, tweeting the following:
“I have stated my concerns with Amazon long before the election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”
Trump’s concerns almost entirely stem from the fact that he is a real estate mogul and as such, see’s Amazon as a threat to brick and mortar establishments. And to be sure, Amazon is a threat to these outdated establishments. But that has everything to do with Amazon’s innovative business practices and nothing to do with the company having an unfair advantage in the marketplace. The internet age has made physical retail spaces less desirable. But with the passing of the old comes robust opportunities for the new. This is precisely what is meant by creative destruction. And Amazon is creative destruction at its finest.
But this hatred for Amazon has united Trump with an unlikely ally: Bernie Sanders. While the two do not usually agree on much, the U.S. Senator from Vermont also declared that Amazon was getting too powerful, saying:
“And I think this is, look, this is an issue that has got to be looked at. What we are seeing all over this country is the decline in retail. We’re seeing this incredibly large company getting involved in almost every area of commerce. And I think it is important to take a look at the power and influence that Amazon has.”
Bernie Sanders has been a voice for modern-day socialists who really do not understand much about the nature of power, or socialism for that matter. It should come as no surprise, then, that like Trump, Sanders does not understand how the market actually works. This is probably why he has claimed that Amazon has grown too large and is now a harm to consumers.
Sure, Amazon’s founder Jeff Bezos may be one of the richest men in the world, but wealth does not make you an enemy of the American consumer. On the contrary, it is precisely because Amazon has made life so convenient for the American consumer, that Bezos has been able to acquire so much wealth.
Amazon Makes Life More Convenient
I had less than 24 hours left before my flight was scheduled to leave and as luck would have it, I had just broken another pair of headphones. This seems like a simple enough problem to solve, but as I was without a vehicle and pressed for time, I was not sure what I was going to do.
Sure, I could buy headphones in the airport, but I would end up paying a great deal for that convenience of doing so, as everything tends to be more expensive in an airport. Then I remembered that certain products are available within hours through Amazon prime. Logging into my account at 11:30 PM at night, I ordered a pair of Beats Studio Headphones and paid a few dollars for overnight delivery.
When I awoke the next morning, I received a notification from my apartment’s management office that I had received a package. I looked at my clock, it was still before 10 AM. Needless to say, I was shocked. In less than twelve hours, Amazon had prepared my order and delivered it to me, saving me from having to endure a 12-hour flight without being able to listen to music or an audiobook.
This is just one story of how Amazon has made my own life more convenient. In fact, just in my own life, I could provide multiple examples of Amazon coming through for me, just as I am sure many of you could do the same.
This is what Amazon has done for so many of us and it is why Amazon is so widely used. Amazon is good at what it does. Sure, that doesn’t mean they don’t have their own fair share of errors. But when Amazon fails, it has to deal with the consumer. When the government fails, on the other hand, it is the taxpayer who must pay.
And because Amazon has such a great reputation among American consumers it has been able to expand into areas that other companies have not. For example, because Amazon has never let me down on a package delivery, I felt more comfortable trying their grocery service, Amazon Fresh. I am now a devote user and even pay an additionally monthly fee for unlimited deliveries. And because Amazon Fresh has been so convenient for me, I also felt more comfortable trying out Amazon’s meal delivery service.
It is precisely because consumers trust its services so much that they feel comfortable supporting Amazon as it expands into new territories. Amazon is not becoming too powerful, it is responding to consumer demand. And consumers love Amazon.
Government Monopolies
While Trump and Sanders would claim that Amazon is growing into some kind of monopoly, the only true monopoly is government. Whereas Amazon and others must respond to consumer demand in order to stay afloat in the business world, the government relies solely on force. And through this force, the government is able to seize the funds it needs to continue all of its federal programs, regardless of whether or not consumers are satisfied with what is being offered.
One prime example of this is the postal service, which Trump has listed as one of Amazon’s victims.
There is almost no reason for the post office to exist anymore. And yet, in the digital age where paper is being used less and less, taxpayers are still on the hook. But unlike other services, where consumers can choose which company to patronize based on their own market preferences, when sending mail you have one choice: The United State Postal Service.
And because of this forced patronage, consumers must endure long lines and inefficient government employees every time they need to send off an important parcel. And while private parcel services exist, like UPS and FedEX, there are certain laws that bar these establishments from transporting specific parcels that are a responsibility of the USPS.
If you want to talk about an establishment that is too powerful, I would say the USPS fits that description far more than the Amazon does. And yet, Trump’s war on the company continues. But no matter how angry his tweets are it won’t stop consumers from utilizing Amazon’s services. At the end of the day, Amazon performs all of its tasks better than its competitors and at a decent price. Its delivery apparatus has made our lives infinitely more convenient than at any other time in history. It is for these reasons that unless it is a result of federal force, it is not likely that Amazon is going anywhere anytime soon. Sorry Trump.
