Over the past year or two, commentators of the left have been railing against Amazon, as they used to do with Wal-Mart. This pastime of theirs is fine as entertainment, but no one should take them seriously; and yet since a considerable number of people get their opinions from such conduits, it becomes necessary—alas—to defend Amazon from such nonsense.
An Island of Misfit Fallacies
The case against Amazon appears to be three-fold: first, it is anti-Union, second, it destroys community life, and third, it destroys competition.
Let me do away quickly with the accusation that Amazon is anti-Union: good for them. Bravo. Well done.
“Amazon destroys communities” is the same recycled accusation used against other big retailers. Since it destroys local retailers, the sense of community erodes. But this is nonsense, always asserted, never proven. “Community” has been eroding in the West for a host of reasons, none of them having to do with retailing. When a store disappears due to competition, people, on average, will be richer and will have more free time. They could use that extra time and money to do some community-like activities, but we have chosen not to do so. Retailing didn’t sink Church attendance, or reduced bowling as an activity. If malls continue to decline, teenagers will find other ways to spent their parents’ money, and avoid studying. Those are their two main talents.
The third accusation is more serious because, if it is true that Amazon destroys competition, it may become a target of anti-trust enforcement. But this is as historically wrong-headed a fallacy as I’ve heard. Let’s look at it in detail.
Great Moments in Anti-Trust Accusations
When looking at this ‘Amazon is destroying competition’ fear, it helps to know history. For example, if you are an historian of the George W. Bush administration, you’ll remember this same accusation was lobbed at Wal-Mart! Wal-Mart was going to destroy retail. Wal-Mart exploits the poor. Wal-Mart was going to drive grocery stores out of business. Wal-Mart ‘controls’ such-and-such a percentage of the market. As it turns out, Wal-Mart controlled nothing. Wal-Mart is currently in crisis mode, fearing competition from Amazon.
Going back to the 1940’s, we have the infamous anti-trust case against the chain grocery store A & P. The government alleged ‘predatory pricing’—lowering prices with the objective of driving competitors out of business—and won the case, even though it failed to prove its case in even one instance. The same year the government won its case, A & P was suffering serious corporate problems due to the extra mobility afforded by the automobile expansion and new competitors who opened bigger stores.
Going even further back to the 19th century, the same accusation was thrown at mail-order retailers Montgomery Ward and Sears. The low-prices from the catalogues were going to drive the general store out of business, then Montgomery Ward or Sears would live happily ever after, exploiting the consumer with outrageous prices. But competition found a way, and today Montgomery Ward is history, and Sears ought to be.
Competition Finds a Way
That’s the lesson we ought to learn from history—that competition finds a way. Many human beings will dream of competing against Amazon, and somebody, somewhere, will find a way. Something will happen nobody will foresee, and Amazon’s dominance will be in jeopardy. We ought to let Amazon be, enjoying its success, and bringing low prices and convenience to the World. Some day in the future, that too will end.
