Breaking Up Amazon Doesn’t Go Far Enough—We Must Put It Under Public Control

A nationalized Amazon could be put to use in building a more equitable, democratic economy.

Katie Parker and Adam Simpson July 22, 2019

On Dec. 12, 2018, activists and politicians gathered outside of City Hall to protest Amazon’s plan to build a new headquarters in New York. (Photo by Andrew Lichtenstein/Corbis via Getty Images)

This piece is a response to Some on the Left Want To Nation­al­ize Ama­zon. Break­ing It Up Is a Safer Bet.”

A nationalized company could play the backbone of a more equitable system.

What should be done with Ama­zon? While some parts of the com­pa­ny should indeed be bro­ken up, its sprawl­ing scale is not its only prob­lem. Much of what Ama­zon does is harm­ful for rea­sons inher­ent to the log­ic of pri­vate own­er­ship, and would remain so at any scale. While the pub­lic prob­a­bly does not need to own, say, The Mar­velous Mrs. Maisel, much of Ama­zon can and should be nation­al­ized and put to use to build a demo­c­ra­t­ic economy.

David and oth­ers sug­gest that break­ing up Ama­zon would restore some sem­blance of mar­ket fair­ness and that reg­u­la­to­ry action could keep the pow­er of its rem­nants in check. But his­tor­i­cal­ly, breakups of monop­o­lies have been rel­a­tive­ly inef­fi­cient. The Bell Sys­tem, led by AT&T, was bro­ken apart in 1984 and is today on track to be even larg­er, as the AT&T‑Time Warn­er merg­er pro­ceeds. Antitrust mech­a­nisms can tem­porar­i­ly roll back monop­o­lies, but the pref­er­ence to dom­i­nate, rather than com­pete, survives.

Even should antitrust action suc­ceed, it’s not clear that restor­ing com­pe­ti­tion would be bet­ter for soci­ety at large in the case of Amazon’s pri­ma­ry appli­ca­tion — con­nect­ing buy­ers with sell­ers. Online plat­forms attain a nat­ur­al monop­oly when a cer­tain lev­el of mar­ket share is achieved and com­pe­ti­tion becomes next to impos­si­ble. What lit­tle com­pe­ti­tion among plat­forms remains doesn’t pro­duce bet­ter out­comes, but instead cre­ates a race-to-the-bot­tom to cut costs. Take Amazon’s new promise of one-day deliv­ery; Wal­mart quick­ly fol­lowed suit. While it might appear con­ve­nient, nei­ther enti­ty has to account for the inten­si­fy­ing extrac­tion from work­ers and the envi­ron­ment; both can con­tin­ue to exter­nal­ize these costs. Prof­it-dri­ven pri­vate own­er­ship of the Ama­zon mar­ket­place will con­tin­ue to cre­ate inno­va­tion” at the expense of pub­lic good.

While David does sug­gest that the Ama­zon mar­ket­place could oper­ate under pub­lic own­er­ship, he doesn’t seem to see the sig­nif­i­cance of such a nation­al­ized dig­i­tal mall.” Amazon’s own­er­ship of this dig­i­tal mall is what allows its suc­cess, using its pri­ma­cy to extort and manip­u­late the mar­ket in its own inter­ests. It is Amazon’s prof­it imper­a­tive, not an inevitable func­tion of a mar­ket­place plat­form, that dri­ves it to pres­sure third-par­ty sell­ers, squeeze work­ers, and rec­om­mend prod­ucts that fail con­sumers. By becom­ing the mar­ket, Ama­zon has effec­tive­ly become the market’s reg­u­la­tor. Such pow­ers should belong to the public.

Demo­c­ra­t­ic pub­lic own­er­ship of the mar­ket­place plat­form could retool this infra­struc­ture for pub­lic good. The People’s Ama­zon — call it Our­ma­zon — could guar­an­tee access to the mar­ket­place for small­er pro­duc­ers rather than dri­ving down the cost of their goods and ser­vices. As a pub­lic dis­tri­b­u­tion net­work, Our­ma­zon could sta­bi­lize prices at a point that ensures via­bil­i­ty and com­pet­i­tive­ness for small busi­ness­es at a cost that ben­e­fits consumers.

Crit­ics of nation­al­iza­tion con­tend that the gov­ern­ment would be forced to adopt Amazon’s extrac­tive prac­tices to oper­ate at an enter­prise scale. But if those prac­tices are indeed nec­es­sary for effi­cien­cy, why would new reg­u­la­tions pro­duce dif­fer­ent out­comes? A nation­al­ized plat­form could shift the def­i­n­i­tion of effi­cien­cy to include met­rics beyond share­hold­er value.

One of Amazon’s key (and con­tro­ver­sial, due to real pri­va­cy con­cerns) fea­tures is the mas­sive amount of data it har­vests and lever­ages to max­i­mize its prof­its. In its cur­rent posi­tion, Ama­zon picks win­ners and losers for its own ends, with algo­rithms that impact prices, order search results and col­late rec­om­men­da­tions. That data could instead be opti­mized for a wide array of eco­nom­ic pri­or­i­ties, from reduc­ing green­house gas emis­sions to hob­bling prod­ucts with labor abus­es in their sup­ply chains. A nation­al­ized enti­ty, man­aged along demo­c­ra­t­ic pri­or­i­ties, could advan­tage small busi­ness­es, union­ized busi­ness­es, or work­er-owned businesses.

There are still more clear ben­e­fits to the pub­lic own­er­ship of Amazon’s dis­tri­b­u­tion and logis­tics infra­struc­ture. The promise of one-day ship­ping, unchecked, pos­es a logis­tics night­mare, cre­at­ing pre­car­i­ous work con­di­tions and sig­nif­i­cant envi­ron­men­tal impact. Demo­c­ra­t­ic pub­lic own­er­ship could ensure that the flow of goods meets labor and envi­ron­men­tal stan­dards. Amazon’s HQ2 fias­co epit­o­mizes race-to-the-bot­tom urban plan­ning, while demo­c­ra­t­i­cal­ly decid­ed plans could incor­po­rate con­sid­er­a­tions like resilien­cy to nat­ur­al dis­as­ters or areas need­ing an eco­nom­ic revival.

Ama­zon is dom­i­nat­ing its way to becom­ing the back­bone of the U.S. econ­o­my. A nation­al­ized com­pa­ny could play the back­bone of a more equi­table sys­tem. As Ama­zon expands into activ­i­ties like pro­vid­ing eas­i­er-to-access cred­it cards, it is cre­at­ing new mar­kets out of sec­tors that would be bet­ter served with social pro­vi­sions. Sim­i­lar­ly, look at Amazon’s move into online phar­ma­cy. We can imag­ine how pow­er­ful a pub­licly owned phar­ma­cy could be, expand­ing access to afford­able med­ica­tion, dri­ven by care rather than profit.

The flaw of antitrust is that the prob­lem of pow­er is reduced to a mat­ter of scale, when pow­er should be root­ed in demo­c­ra­t­ic con­trol and own­er­ship. Who owns the data? Who pro­grams the algo­rithm? Who gov­erns the plat­form? Break­ing up Ama­zon may be nec­es­sary, but some of its pieces would inevitably become nat­ur­al monop­o­lies that would be bet­ter served as pub­licly owned plat­forms oper­at­ed for pub­lic ben­e­fit. Pub­lic own­er­ship of Ama­zon would enable a redesign to max­i­mize pub­lic ben­e­fit over profit.

For anoth­er per­spec­tive, read Some on the Left Want To Nation­al­ize Ama­zon. Break­ing It Up Is a Safer Bet.”

Katie Park­er is a Wash­ing­ton, D.C.-based researcher focused on region­al plan­ning and com­mu­ni­ty eco­nom­ic devel­op­ment. Adam Simp­son is a Wash­ing­ton, D.C.-based researcher and writer as well as a co-host of the pod­cast Future Left.
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