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The problem is not the automation, the problem is that a single authority has a complete monopoly on certain aspects of the e-commerce market. Full credit to Be

The problem is not the automation, the problem is that a single authority has a complete monopoly on certain aspects of the e-commerce market. Full credit to Bezos and Amazon for their incredible execution in achieving this. However, monopolies are an example of market failure, and in this case, also an example of an authority able to act as judge + jury where the affected parties have no realistic recourse, while being accountable to no-one. This is why we need government to intervene and ensure competition is restored on both the buyer + seller sides in e-commerce.

bgorman 6y ago
How is Amazon a monopoly when customers can easily purchase an item from eBay, Walmart, Target, Aliexpress, and many others. Amazon is often the most expensive option for me.
- Areading314 6y ago
  Its not a monopoly over all ecommerce. However there are certain markets where the sellers, for example book publishers, are totally at the mercy of amazon because they have become the only de facto distribution channel for certain products like e-books (there are others as well). So its great for customers but it still has severe negative consequences for authors and publishers. Technically this is known as a "monopsony" but it's bad just in the same way a monopoly is.
  - nickpp 6y ago
    So I guess any company becomes a "monopoly" if you reduce enough the definition of its field?!
    - BlueTemplar 6y ago
      Indeed.
    - fennecfoxen 6y ago
      The key thing economists look to, to define a monopoly, is that the company has the power to set prices. This is in the economic sense: that there isn’t some give-and-take supply-and-demand setting prices for them, and they just happen to record that. When Office Depot was considering a Staples merger a while back, the Feds looked at the price of corporate office supply services in markets where there was only one of each firm, and found them higher than in markets where both competed. This despite the fact they didn’t have a monopoly on, say, copy paper.
      - Terretta 6y ago
        Just because Amazon shoppers may ignore prices elsewhere doesn't mean Amazon can "set" prices. It may mean Amazon understands their shoppers' price sensitivity, to be sure, but I can find almost anything on there elsewhere for less, or also for more.
- lenkite 6y ago
  Amazon fits every definition of a monopoly considering they have >50% market share, tyrannical control of the supply-chain in which they can flex their muscles with no repercussions and life-and-death control over sellers.
- mrh0057 6y ago
  You don’t need to be a monopoly to violate antitrust law.
- einpoklum 6y ago
  I don't know about Target and Walmart as on-line entities, but I do know that there is limited overlap between the merchandise you find on eBay and the merchandise you find on AliExpress. So it is often (usually?) not true that if you can buy an item on website X you can also buy it at site Y.
aeternum 6y ago
Why does it matter that this happened with Amazon? It could have also happened with ebay, walmart, or a local uncle bob's discount closet shop. We have a judicial system to deal with issues like this which generally handles things fairly regardless of the size of each party.
- bredren 6y ago
  Walmart was long known for its strong arming of its suppliers. I’m sure there are plenty of people out there glad to see Amazon beating them. https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know
  - Areading314 6y ago
    Yes Walmart is the textbook example of a monopsonist being able to extract steady profits while creating a race-to-the-bottom for prices among their suppliers. Great for end customers, but harmful nonetheless.
    - bigmattystyles 6y ago
      Great for end customers at first, but then what are you left with.
      - kortilla 6y ago
        Still great? Walmart prices are still low/lowest where I live.
        ender341341 6y ago
        but they're often low because they're selling bottom barrel quality goods (like electronics with cheap capacitors that fail quickly or clothes with lower quality fabrics & sewing that don't last). Even products that look the same as other stores will commonly have a Walmart specific SKU that uses cheaper components.
kortilla 6y ago
> However, monopolies are an example of market failure No they are not. It’s only considered a failure when the position is abused to prevent competition. You can have a monopoly situation where competition just doesn’t bother to enter because the monopoly holder hasn’t abused the situation to make entering the market attractive. Additionally, the government frequently grants monopolies because they don’t really want to see market competition due to the disruptive nature of the industry (e.g. utilities). Monopolies are just a specific market condition that implies certain pricing dynamics and potential competitor strategies. They are not a failure in themselves and can frequently be a huge driver of competition. Nothing attracts a competitor like a stodgy monopoly with a thick margin and no penchant for innovation.
- 542354234235 6y ago
  > You can have a monopoly situation where competition just doesn’t bother to enter because the monopoly holder hasn’t abused the situation to make entering the market attractive. Do you have any real world examples of this actually happening? > the government frequently grants monopolies because they don’t really want to see market competition due to the disruptive nature of the industry (e.g. utilities). The government does this with the addition of heavy regulation specifically to prevent abuse that comes from having monopolistic control of a market.
  - kortilla 6y ago
    > Do you have any real world examples of this actually happening? Drive into any small town. There is frequently only 1 gas station, 1 grocery store, etc that all sell things for reasonable prices. For a completely different style, the major airport in Rome (da Vinci) is owned by a private company yet they don’t do any goofy shit to jack up landing fees. There are many rural places in the US where there is only coverage from one cell phone provider and the rates remain the same. > The government does this with the addition of heavy regulation specifically to prevent abuse that comes from having monopolistic control of a market. No, they have to add the regulation because of the abuse that comes from a government granted monopoly. Monopolies emerge all of the time in all kinds of markets and they are not indications of failures. They can indicate that consumers are happy enough or that the margin is thin enough that competitors aren’t needed. A government guaranteeing that a competitor can’t exist is when monopolies become ripe for abuse. That’s why government granted monopolies need regulation.
einpoklum 6y ago
> However, monopolies are an example of market failure No they aren't. Markets tend towards monopoly, or at least an oligopoly. Market 'equilibrium' where prices are 'right' is an ideological fantasy. That said - this is an example of how the legitimacy for private commercial corporations being run dictatorially based on formal property ownership kind of blows up in people's faces when such corporations grow to the level of encompassing a significant part of some sector of the economy, or a significant part of social interaction altogether. As for government intervention - the government is involved: Its basic role is to set this up and support it. Government checks corporate/capitalist power mostly in the face of very strong public pressure and the threat of uprisings / mass strikes / violent redistribution etc.
- fennecfoxen 6y ago
  This post has minimal relation to the scientific consensus on how economics works. It’s a lot like climate change denial posts saying that actually burning coal is good because of cloud albedos. Technically true, just very selectively so, in a manner that does not accurately reflect the bigger picture.
  - Miraste 6y ago
    Economics isn't a science in the same way as climate science. I don't think you can label anything in the field a "scientific" consensus. Popular consensus maybe.

bgorman 6y ago

How is Amazon a monopoly when customers can easily purchase an item from eBay, Walmart, Target, Aliexpress, and many others. Amazon is often the most expensive option for me.

Areading314 6y ago
Its not a monopoly over all ecommerce. However there are certain markets where the sellers, for example book publishers, are totally at the mercy of amazon because they have become the only de facto distribution channel for certain products like e-books (there are others as well). So its great for customers but it still has severe negative consequences for authors and publishers. Technically this is known as a "monopsony" but it's bad just in the same way a monopoly is.
- nickpp 6y ago
  So I guess any company becomes a "monopoly" if you reduce enough the definition of its field?!
  - BlueTemplar 6y ago
    Indeed.
  - fennecfoxen 6y ago
    The key thing economists look to, to define a monopoly, is that the company has the power to set prices. This is in the economic sense: that there isn’t some give-and-take supply-and-demand setting prices for them, and they just happen to record that. When Office Depot was considering a Staples merger a while back, the Feds looked at the price of corporate office supply services in markets where there was only one of each firm, and found them higher than in markets where both competed. This despite the fact they didn’t have a monopoly on, say, copy paper.
    - Terretta 6y ago
      Just because Amazon shoppers may ignore prices elsewhere doesn't mean Amazon can "set" prices. It may mean Amazon understands their shoppers' price sensitivity, to be sure, but I can find almost anything on there elsewhere for less, or also for more.
lenkite 6y ago
Amazon fits every definition of a monopoly considering they have >50% market share, tyrannical control of the supply-chain in which they can flex their muscles with no repercussions and life-and-death control over sellers.
mrh0057 6y ago
You don’t need to be a monopoly to violate antitrust law.
einpoklum 6y ago
I don't know about Target and Walmart as on-line entities, but I do know that there is limited overlap between the merchandise you find on eBay and the merchandise you find on AliExpress. So it is often (usually?) not true that if you can buy an item on website X you can also buy it at site Y.

aeternum 6y ago

Why does it matter that this happened with Amazon? It could have also happened with ebay, walmart, or a local uncle bob's discount closet shop. We have a judicial system to deal with issues like this which generally handles things fairly regardless of the size of each party.

bredren 6y ago
Walmart was long known for its strong arming of its suppliers. I’m sure there are plenty of people out there glad to see Amazon beating them. https://www.fastcompany.com/47593/wal-mart-you-dont-know https://www.fastcompany.com/47593/wal-mart-you-dont-know
- Areading314 6y ago
  Yes Walmart is the textbook example of a monopsonist being able to extract steady profits while creating a race-to-the-bottom for prices among their suppliers. Great for end customers, but harmful nonetheless.
  - bigmattystyles 6y ago
    Great for end customers at first, but then what are you left with.
    - kortilla 6y ago
      Still great? Walmart prices are still low/lowest where I live.
      - ender341341 6y ago
        but they're often low because they're selling bottom barrel quality goods (like electronics with cheap capacitors that fail quickly or clothes with lower quality fabrics & sewing that don't last). Even products that look the same as other stores will commonly have a Walmart specific SKU that uses cheaper components.

kortilla 6y ago

> However, monopolies are an example of market failure No they are not. It’s only considered a failure when the position is abused to prevent competition. You can have a monopoly situation where competition just doesn’t bother to enter because the monopoly holder hasn’t abused the situation to make entering the market attractive. Additionally, the government frequently grants monopolies because they don’t really want to see market competition due to the disruptive nature of the industry (e.g. utilities). Monopolies are just a specific market condition that implies certain pricing dynamics and potential competitor strategies. They are not a failure in themselves and can frequently be a huge driver of competition. Nothing attracts a competitor like a stodgy monopoly with a thick margin and no penchant for innovation.

542354234235 6y ago
> You can have a monopoly situation where competition just doesn’t bother to enter because the monopoly holder hasn’t abused the situation to make entering the market attractive. Do you have any real world examples of this actually happening? > the government frequently grants monopolies because they don’t really want to see market competition due to the disruptive nature of the industry (e.g. utilities). The government does this with the addition of heavy regulation specifically to prevent abuse that comes from having monopolistic control of a market.
- kortilla 6y ago
  > Do you have any real world examples of this actually happening? Drive into any small town. There is frequently only 1 gas station, 1 grocery store, etc that all sell things for reasonable prices. For a completely different style, the major airport in Rome (da Vinci) is owned by a private company yet they don’t do any goofy shit to jack up landing fees. There are many rural places in the US where there is only coverage from one cell phone provider and the rates remain the same. > The government does this with the addition of heavy regulation specifically to prevent abuse that comes from having monopolistic control of a market. No, they have to add the regulation because of the abuse that comes from a government granted monopoly. Monopolies emerge all of the time in all kinds of markets and they are not indications of failures. They can indicate that consumers are happy enough or that the margin is thin enough that competitors aren’t needed. A government guaranteeing that a competitor can’t exist is when monopolies become ripe for abuse. That’s why government granted monopolies need regulation.

einpoklum 6y ago

> However, monopolies are an example of market failure No they aren't. Markets tend towards monopoly, or at least an oligopoly. Market 'equilibrium' where prices are 'right' is an ideological fantasy. That said - this is an example of how the legitimacy for private commercial corporations being run dictatorially based on formal property ownership kind of blows up in people's faces when such corporations grow to the level of encompassing a significant part of some sector of the economy, or a significant part of social interaction altogether. As for government intervention - the government is involved: Its basic role is to set this up and support it. Government checks corporate/capitalist power mostly in the face of very strong public pressure and the threat of uprisings / mass strikes / violent redistribution etc.

fennecfoxen 6y ago
This post has minimal relation to the scientific consensus on how economics works. It’s a lot like climate change denial posts saying that actually burning coal is good because of cloud albedos. Technically true, just very selectively so, in a manner that does not accurately reflect the bigger picture.
- Miraste 6y ago
  Economics isn't a science in the same way as climate science. I don't think you can label anything in the field a "scientific" consensus. Popular consensus maybe.