The excellent Annie Lowrey in New York Magazine argues that Amazon is not a monopoly. I disagree. Or at least, I have to say the premise is not supported quantitatively. The problem is the denominator. Monopoly resides in market share. AL compares Amazon to all retail sales, but that is the wrong comparison. Amazon’s market is the market for intermediaries that shepherd you through the sale of Everything. It’s a consumption manager. The best comparison is the up-and-coming Walmart. Google doesn’t really count, since it just throws you at individual retailers.
The fact that Amazon sells low does not debunk the monopoly thesis. A monopoly grows through predatory pricing (as with Diapers.com recounted by AL) and investment in fixed capital that provides competitive advantage. The stage of reaping monopoly rents via price increases lies before us. That is what the market for AMZN is saying, in light of the astronomical price-earnings ratios. It could be wrong. The future monopoly rents might not be realized, in which case Amazon’s shares should crash, big time. It wouldn’t be the first time that happened to a dot-com company.
I’m not offering any moral guidance. I use Amazon all the time. It’s just too convenient, and life is short. It is not Amazon’s market power over its own suppliers that facilitates its treatment of its own workers. That could happen under other circumstances. In fact, the organization of work — huge shipping centers employing lots of people — lends itself to union organizing. It’s the overall labor market — workers chasing jobs, rather than the converse — plus the indulgence of employers over unions by the government that is the root of Amazon’s labor pains.