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Amazon’s Latest Crap

| 47 Comments

A good summary of Amazon’s most recent bullshit can be found here.  It’s a good enough summary.  I just want to make a couple of points.

A book–a novel–both is and isn’t a commodity.  It is in the sense that, given a stack of the same book, it matters not at all, to anyone, which one the reader buys, and it is produced for exchange.  It isn’t a commodity in the sense that it is subject to all of the strange combinations of changing tastes and fads and social dynamics of the moment as a film or a sculpture or a record or a painting, all mediated through the author’s skill, taste, and perception.  A publisher, therefore, is caught in an interesting bind.  In order to make a profit and continue publishing books, the book must be treated as a commodity–as a mass produced item that fulfills a human want and that has an exchange value.  In order to get a good product, the book must be treated in some measure as a work of art–authors are idiosyncratic, and a good publisher will fill certain positions with people who are skilled in getting the best work out of these strange beasts (having editors and production people who actively love the sorts of books being produced is kind of cheating, but it seems to work).

Here’s the thing: As consumers, we know that businesses exist to get us to cough up cash and don’t give a shit about us as people; that’s the nature of the beast.  But we don’t like to have our faces rubbed in it.  We would like the guy at the store or on the other end of the customer support line to least pretend he cares about us.  In the same way, as writers, we don’t like having our faces rubbed in the fact that, to make a living, we have to produce a commodity.  We (okay, I, but I’m not the only one) care deeply about the stories we tell, and believe that we can tell stories that will move and delight, and thrill and even sometimes enlighten our readers, and that this is, above all, why we do what we do.  We don’t like to be reminded that we’re just a piece of a massive money-making machine, and that while we and our agents negotiate furiously for how much of the pie we are going to get, above us are massive corporations that are arguing even more furiously, and nastily, and about how much of the pie they are going to get.

This is not, in my opinion, a moral issue.  Amazon is doing what it does because it is a corporation and only cares about the bottom line, like any corporation.  There are no heroes in this.  But it is very much a practical issue.  If Amazon succeeds, many writers who are, at present, making a living as writers, will have to augment their living doing other things, and this will mean they will write less, and I will have less good stuff to read.  It is also a personal issue; many of the people being fucked over, or in danger of being fucked over, are friends of mine.

I’ve stopped buying books from Amazon; I think this will make exactly no difference.  I have no confidence in consumer pressure against an organization the size of Amazon (I have even less confidence in the US Government’s anti-trust investigators).  So, no, I do not see a solution.  I hope I’m wrong, but it looks like Amazon can pretty much do whatever it wants, and readers and writers are simply going to have to deal with it.  Like I said, I hope I’m wrong.

 

skzb

Author: skzb

I play the drum.

47 Comments

  1. Obviously the solution is for the DOJ to file another suit against Apple.

  2. Thanks for informing me. I had been buying books at Barnes & Noble mostly because I enjoy the experience of browsing in person at a book store (or library) and don’t want Amazon to take that way. I will continue to focus my sales there – though I’m not optimistic that they are any more fair with publishers, they just lack Amazon’s position of power in negotiations.

  3. skzb

    orc4hire: Irony? Oh, we don’t get that here.

  4. The NYT article requires a log in, but this open post seems to cover the matter well: http://www.digitalbookworld.com/2014/an-authors-perspective-on-the-hachette-amazon-battle/

    I agree this particular issue won’t hurt Amazon much, but it’s a drop in the bucket which is already being filled by stories out of their warehouses, employee mistreatment etc. I’ve even read cticism in industrial periodicals criticing them for unsound business practices, especially harping on how they’re increasing the incidence of theft in the warehouses where they’re trying hardest to stop it. They’re recently been forced to begin collecting sales in some jurisdictions, and Bezos is coming under fire from other directions for his selfish libertarianism. The more of his screw you attitude that comes to light, the better.

    For myself, I’ve disliked Amazon as long as I can remember, and I’ve never bought from them except one soundtrack I was unable to locate anywhere else. I buy new fiction at local stores, and generally get everything else via the owner of a used book store who’ll pass on her discount to us, or straight from the publishers for print-on-demand books.

  5. skzb

    L. Raymond: Thanks for the link and the perspective.

  6. I’ve never trusted Amazon. It always smelled like a monopoly to me. Now that brick-and-mortar booksellers are a vanishing breed, Bezos’ bevy are attempting to run the table on the publishers. And all of this follows after I admitted to myself that I’ll have to join the 21st Century and buy some of the books I want online.

  7. Your confidence in federal antitrust enforcement seems set at exactly the right level. It’s more important, apparently, to punish those who’d break the Amazon monopoly. Its history with snatching defeat from the jaws of victory with Microsoft doesn’t give one the view the litigation against publishers and Apple is a fluke.

  8. I’ve read about Amazon also being just relentlessly shitty to their employees at fulfillment centers, too.

  9. I guess I should cancel my “Hawk” preorder and get it elsewhere. 🙁

  10. The whole thing is just so blatant and shameless, though, it really is shocking. It’s hard to imagine the combination of mis-, mal- and non-feasance that must be going on at FTC and DoJ for this to be ignored.

  11. Also: What a bizarre state of affairs it is when you start feeling sympathy for Barnes and Noble.

  12. Jenphalian

    http://www.ft.com/cms/s/2/ed6a985c-70bd-11e2-85d0-00144feab49a.html#slide0

    I hope this link is accessible on your side of the Pond; this article from the Financial Times has nothing to do with books but gives an insight into the way Amazon sees the world.

    For those unfamiliar with the FT I should note that it is conservative with a small c and required reading for business people and professionals dealing with businesses; if the FT is putting the boot in about working conditions then things are going very badly wrong.

  13. skzb

    Miramon: Yes and yes. Exactly.

    Stevie: Thanks for the link.

  14. When Amazon won that case against Apple, I actually predicted that this would happen–they were inviting an anti-trust case just by winning in court against Apple. But is it is an anti-trust violation to be a dick to consumers and suppliers? I thought you actually had to show that they were using their dominant position in the market to discourage competition, not to provide poor service. Either way, screw ’em. I buy things from Amazon, but never books. Maybe I’ll have to stop buying that other stuff from them too.

  15. I do think that boosting the signal on all the problems with Amazon is worthwhile education, whether it leads to short term results or not. If someone pushes some sort of popular action on the issue that is not completely idiotic I will support it. In the meantime, I will cut out buying via Amazon, even though I agree with Steve that this kind of individual action, in the absence of something organized has zero effect.

  16. skzb

    You are most welcome to the link! I’ve been on a roll recently: I’ve been recommending Samuel Delany’s essay:

    http://www.nyrsf.com/racism-and-science-fiction-.html

    and got some great thoughtful feedback from it as well, which somewhat swells the number of younger people celebrating his Grandmastership; his acceptance speech made me cry, but then I’m a wimp. Particularly when Roger Zelazny is mentioned.

    That was the happy stuff but Amazon are forcing us into ethical dilemmas which are not easily resolved; as you know, Orbit decided against including the three novels for which they hold the UK rights in the Loncon’s Hugo packet, stirring much heat but little light.

    Amazon UK has very recently reduced the Kindle version of Ann Leckie’s Hugo nominated ‘Ancillary Justice’ to £2.99, which is around the price of a coffee in central London; all the other sites I checked are considerably dearer, and the 2 other Orbits price tags remain unchanged. I am therefore caught between posting this fact, in the hope of sending business Amazon’s way, which might help Ann win the Hugo, or not mentioning it anywhere on the web which is good on the whole general principles thing but not so good on the whole writers are human beings front.

    I’ve opted for the former; admittedly, since I don’t even twitter, there’s not much chance of it going very far, but not very far seems better than nowhere…

  17. Amazon sells books as commodities. You don’t worry that you’ll get an inferior product, all the books come off the same assembly line with reasonably good quality control and they don’t ship the inferior ones to some particular distributor. You can buy from them sight unseen.

    They offer the lowest price. On the internet where it’s easy to find competing prices, that makes all the difference. They write it into their contracts that they have to get the lowest price. Publishers put up with that because Amazon has such a big market share, and Amazon has the market share because they have the low price, and for name recognition, but I think it’s very largely price.

    It’s hard for Amazon to keep high profits and lowest price. They have to squeeze employees and suppliers. It’s an inherently unstable situation.

    Book publishers in general have been doing badly for a long time, this only amounts to about three more nails in their coffins. The return policy with traditional retailers where books are destroyed if they don’t sell quickly is absurd. They’ve only survived this long because people who have more than enough disposable income are willing to pay a lot for books.

    Amazon is already slipping on used books. I’ve found that for example ABE books usually offers lower prices there. I’ve had only good experiences with them.

    To the extent that people go look at Amazon’s site when they’re thinking about what to buy, and browse through the site and choose something based on that, then I’m wrong. In that case Amazon is providing a service to go along with their demands. I don’t know how much of that is going on. I suspect not that much.

    I don’t know how much ebooks are the future. They’re potentially much cheaper. They take a lot less space on the bookshelf. I don’t like my reader that much, but maybe I can get a better one. Suppose you self-published an ebook and you sold it with Amazon. Amazon would do essentially nothing to get people to buy it. Less than a book publisher would. If you put up your own website to sell it, or if you go with some other distributor than Amazon, people who already know they want it can find it just about as easily as they can listed on Amazon. (I think. I’ve never done that. I notice that the cheap sales websites are advertised as giving away stuff to improve your exposure on search engines, often claimed to be worth hundreds of dollars.)

    Amazon has a largely artificial advantage. In the short run they can pick off wounded gazelles, but they may not be far from starving.

  18. “This is not, in my opinion, a moral issue. Amazon is doing what it does because it is a corporation and only cares about the bottom line, like any corporation.”

    I’ve been under the weather lately but didn’t realize how far until I saw my incoherent comment above.

    I had wanted to make the point that I think this is a moral issue, not because of the corporate bottom line, but because of the BoD’s blatant disregard for the entire rest of society. (I don’t think that one should think of a corporation as an entity, rather than as a collection of people. The BoD is human, and it *is* the corporation.)

    Bezos’ and his liberatarian views are what lead to Amazon insisting they simply don’t have to collect sales taxes (I left out “taxes” above) at all, which morphed into their only being willing to collect taxes if they have a sizable presence in a state. They then demanded tax breaks from states in exchange for the privilege of buiilding warehouses there. They insisted they were using absolutely no resources at all in the states in which they were located, hence they had no responsibility to pay them for anything. This, while they were telling people to go into local stores, find what they want, then go to Amazon and order it tax free, undercutting the locals, killing their client base and simultaneously reducing tax revenue and harming smaller businesses.

    The connection I see between this and the Hachette spat is that Amazon is demanding the right to take as large a portion of the profit of a book as it desires in order to undercut other stores. They say they want to use that profit to offer bigger discounts to get more people to buy the books, or in other words, to force smaller shops out of business while not in any way contributing to the cities or states who are losing both tax revenue and their own local stores. That they’re trying to do this on the backs of the creators of the products they sell is another aspect of their ugliness.

    The bad press they’re getting will, I hope, help in the long run. SCOTUS has agreed to hear the suit brought by contract employees who are demanding they be paid for the time spent passing through Amazon’s security checkpoints as they enter and leave not just their warehouses but also the lunch rooms. (Some were having to spend 15 minutes of their 30 minute lunch waiting to be screened, time which Amazon insisted was part of their unpaid break time, plus another 25 minutes in screening lines just trying to start their shift or go home.) Bad PR like that may force them to rethink their self-absorbed business practices.

    Forbes had an interesting note last week that may give you food for thought. As a means of combatting Amazon’s 500 lb gorilla status, apparently some publishers are considering agreeing to giving Amazon their 35% (or whatever amount they want), but will raise the royalities given to their authors in order to cut down on the net they has to be split with Amazon.

    http://www.forbes.com/sites/jeremygreenfield/2014/05/14/inside-amazons-battle-with-hachette/
    “The typical accepted royalty at a big publisher is 25% for ebooks. I’ve heard talk of 50% becoming the new norm.”

    People have proven that they’ll sometimes respond to negative PR by punishing the company. It may take a *lot* to ding Amazon, but every little bit helps – screwing suppliers, screwing authors, screwing governments & local businesses and especially screwing employees. They’ve even tried to punish almost every online retailer in the nation by lobbying to change the Fair Marketplace Act to define the lower limit for collecting online sales tax $125,000 in sales instead of $1M. That would have cut the legs out from almost every new or mom-and-pop store trying to keep afloat.

    The down side of that, of course, is that people might think they’re going to a different company for their books in order to teach Amazon a lesson, only to learn their choice is also Amazon, who bought AbeBooks back in 2008 and gets a cut of every sale. That’s why I wish people would stick with their local businesses or the publishers directly whenever possible.

  19. “The down side of that, of course, is that people might think they’re going to a different company for their books in order to teach Amazon a lesson, only to learn their choice is also Amazon, who bought AbeBooks back in 2008 and gets a cut of every sale.”

    Ouch.

  20. Me, color me skeptical. There are two at play here, and Hatchette is part of a multinational corporation that also presumably only cares about the bottom line, like any corporation. Isn’t this the first round of negotiations court-mandated to take place serially, rather than collectively—an outcome of the price-fixing case against the Big 6? Who knows what kind of hardball is being played when everyone involved no doubt views the eventual outcome as precedent-setting? All the reports I’ve seen so far have been light on facts and heavy on spleen. All I know is authors lose and readers lose.

    Meanwhile, I confess earlier today I preordered Hawk on Amazon. Please don’t hold it against me.

  21. skzb

    I don’t hold it against you. As I said, I have zero confidence that people deciding not to patronize Amazon will do any good.

  22. Trying to reconcile this with WOOL author Hugh Howey’s perspective (http://www.hughhowey.com/more-thoughts-on-hachette-amazon/). He comes down firmly on the other side of the issue, and rolls out math showing how Amazon puts more money in the author’s pocket than the Big5 ever will.

    I’d like to hear your perspective on his explanation of the situation, since you’re also a published author.

  23. skzb

    One company having control over what sells and how much authors make? Gee, what could *possibly* go wrong?

  24. I buy maybe a thousand bucks a year worth of stuff from Amazon. I live in Peoria, i read a lot. No physical bookstore would have all the stuff I want. Amazon has been a really good thing for me. So it’s a soulless corporation. So are governments. So is Hatchette.

  25. I applaud your dedication over not buying books at amazon. Unfortunately there are a mass number of books that I would like to read and that quickly depletes my funds; therefore amazon is great for me on an overall. I do love mom and pop book stores but other than that I do not really enjoy shopping in stores, the internet is so seductive. Any who, if your books ever get pulled from amazon or other large corporations, please let us (fans) know as I in particular would cry if I could not read anymore of your books or had sell a kidney to get one (ie some of liz williams books, had to get one or two of the originals from UK)

  26. Although I’ve only had one book published by professional publishers (two additional self-published), if Amazon screws publishers too badly what we lose are editors. I know damn well my professionally published book was better because it was published by a real publisher who put significant effort into editing. And I’m talking about working with me on the structure of the book, suggesting additional chapters – long before the copy editing stage. Though copy editing itself is a damn valuable thing. In addition, I understand that some publishers put some effort into publicity, though mine being an academic press did not.

  27. I really try hard to see both sides of an issue, but I am having trouble seeing how anyone who isn’t a CEO of a huge company can think that this is a good situation. Hugh Howey’s argument is partly based on the idea that Amazon isn’t a monopoly, so it’s all good. And then it’s partly based on the idea that the huge publishers are bad, so Amazon must be good.
    Yeah, it’s not a monopoly. It doesn’t really produce anything. It’s a monopsony, a singular retailer through which consumers purchase their goods. Thus Amazon has the ability to artificially lower prices, as it’s done in the past and is attempting to do right now. And the latter part, that’s just silliness. Yeah, the big publishers have a ridiculous amount of control over the market, and that’s bad, but that doesn’t mean that giving _one_ ultra-huge company control is going to make things better.

    I shall be preordering Hawk through a small, local, bookstore.

  28. To add to what SDK says, if you look at what Amazon does as a monoposy, along with its lowering of labor standards, Amazon is essentially the Walmart of the Internet. Cheering for them because some of the people they screw are fellow big corporations is like cheering for Walmart on the same ground.

  29. As I understand it, Amazon is the lowest-price distributor because they write that into their contracts — they will not deal with a publisher if any other distributor gets as good a deal.

    And people expect Amazon to be the lowest-price distributor, so they go to Amazon.

    So if Amazon does not carry a book, people who only go to Amazon won’t find it.

    Amazon does not particularly provide other services, but it does let readers publish reviews, and it does some strictly-limited targetted advertising, like “Customers who viewed this also viewed”.

    Amazon will surely be dominant as long as many customers look only on Amazon.

    If there was a front-end that was in some way obviously better, so you check there first to find your book, and then go from there to Amazon or whatever, that would help. Google does that, with excerpts from the books to look at too.

    I’m not ready to recommend that everybody give up clicking on Amazon and instead click on Google Play first. That could turn out just as bad.

    But having two or more gigantic oligopsonists competing for your attention is at least better than just one. I hope.

  30. skzb

    The analogy with Wallmart is, I think, a good one. Some people are–quite reasonably–so offended by Wallmart’s practices that they won’t shop there. I’m not one; I don’t usually waste my time looking for kindlier, gentler capitalists. My decision to avoid buying books from Amazon is personal, not expecting to accomplish anything, and not something I’m encouraging anyone else to do. I make no judgments on people who still shop at Amazon or Wallmart.

    The reason I said I wasn’t was to emphasize how disgusted I am with this, not to try to convince anyone else to go along, or to imply that I’ll somehow think less of anyone who continues to shop there.

    Is that clear enough?

  31. There are political and union campaigns against Walmart that are worth supporting. At some point, Amazon may disgust enough people that it becomes an organizing point.

    But in the meantime, anyone who thinks Amazon will be better for most authors is kidding themselves. Without the services publishers provide, that great “70%” royalty will be 7/10ths of zero. Only two kinds of authors will come out ahead self-publishing on Amazon: Those who already have such a big following that they can sell a large number of books based on their names. And those who have the money to to spend on publicity, or who have tremendous skills at self promotion. Both types will also have to have the money to hire freelance editors. Aldous Huxley I understand could write so tightly that editors would often throw up their hands and not change a word. Most writers need editors.

    Anyone not in that position will have to depend on conventional publishers. And Amazon’s squeezing of conventional publishers will in turn squeeze most writers. Steve, I’m glad you liked the Walmart analogy, but it was mainly intended as an answer to the really silly idea that Amazon will benefit writers (which I know you don’t hold, but was in an article linked upthread). Writers are one kind of labor in the publishing industry. And just as Walmart squeezing suppliers helps lower wages for other workers, Amazon’s squeezing publishers will do the same for workers who write.

  32. skzb

    Yeah, I got where you were going with it, but I had to, you know, spin off, because that’s how I roll. 🙂 I agree with your point as well.

  33. I’m going to continue this cause I think it leads to an interesting point. I don’t think your pessimism is unjustified. But I think it is too absolute. It is really tough to predict which struggles will lead to something productive. A case in point The Coalition of Immokalee Workers – which today represents close to 100% of the tomato pickers in Florida.

    It began as what amounted to hybrid activism/journalism exposing cases of actual chattel slavery in Florida. (Corrupt law enforcement conspired with farmers in remote rural areas to enslave their workforce.) Now exposing this and forcing the Feds to enforce the laws against slavery when local police departments were complicity in it was definitely a good thing to do. And given what corrupt police can get away with in the way of murder it was a brave thing to do as well. But at the same time, it was exposing an exception. Chattel slavery is not a comfortable fit with modern capitalism. It is a criminal act, a serious felony. Fighting it is not the sort of thing that one would predict would lead to serious political change, anymore than (say) exposing and capturing a serial killer. It is personally heroic, but also dealing with something exceptional within the system.

    Except that the people who exposed the slavery did not stop there. In the course of exposing it, they realized that chattel slavery was just the extreme end of exploitation of farm labor in Florida. And so they move from journalism/activism to providing support to workers who were struggling to form a Union. If anyone is interested I’ll describe some of the conditions that let unionization succeed at a time when most unions are losing strength. But, while I can describe in retrospect how anti-slavery activism turned into successful union organizing, I think it would have been very unlikely when the group started out exposing slavery in Florida that anyone would have predicted the organization of a successful union arising from those actions.

    And it is a long way to say “you never can tell”. But I think it is an important point too. Cause you can never tell which democratic struggle is going to prove a seed that grows into something much bigger. So yeah. probably this is not going to be the spark that leads to a movement that takes on Amazon and maybe even capitalism. But at the same time, you don’t know in advance what will or won’t be that spark. In that unpredictability is a basis for hope that does not depend upon pollyannaish optimism.

  34. Because of Amazon I read at least three times the books as I did in the past. I’ve also managed to do this while spending less overall on these books. I’ve discovered new authors and have enjoyed seeing them grow in popularity and rise above the chaff. I now gamble more on new works because these are usually self published and priced at a few dollars or less. The gems I find at this price point are treasures compared to the bitter feeling I get while shelling out $10 or $30 for the lastest paperback or hardback and finding a book that is not up to par.

    I love the libertarian type approach to an author keeping the rights to his or her works and publishing themselves. I love seeing these authors succeed far beyond their dreams and “quit their day job” because of new found success and wealth.

    With Amazon, I manage to enjoy reading without having to burn fuel to drive an hour to he nearest bookstore to shop a mediocre selection or find they do not have the latest new work of an author I love. I can preorder and be assured that the day of release it will be here.

    Both Amazon and the self published author have increased my love of reading and for that I will continue to be loyal customer and fan of the concept.

  35. It’s interesting that one of the main criticisms of socialism is that it is inefficient – but we keep seeing businesses getting bigger and bigger and more powerful – because big can mean much more efficient. I agree with the right that Big Powerful organizations can and should scare us – but I disagree that it only applies to organizations that are supposed to be answerable to us. Trouble is, I don’t know what to do about it. It *is* efficient to have big enough R&D to create smart phones. It *is* efficient to store products in huge national warehouses and ship on-line. And it certainly is efficient when crony capitalism can get the state to bail out the CEO’s mistakes and pay him big bonuses. At least in the short run, until the country is too poor.

  36. Oh, be warned, Hoyt is an unashamed conservative, which doesn’t mean everything she says is crazy.

  37. I’ve just started using an ereader and really don’t understand all of the issues surrounding Amazon and what it’s doing to the publishing industry. What suggestions do you have for purchasing “Hawk” when it comes out?

  38. skzb

    In all seriousness, go for whatever is most convenient for you. I feel about Amazon the way I feel about lima beans; I wouldn’t tell anyone else not to eat lima beans. I can’t be more specific, because I don’t know what the options are.

  39. Here’s an option that may be of interest to you, Beagle:
    http://www.kobo.com/indie

    Please bear in mind that I’ve only ever read eBooks when I’ve had no real option. For example, I read the Firefly FanFic here on the site because printing it myself would have been problematic — but if my printer weren’t down, I’d have bound my own, dammit. Occasionally when stuck someplace and even my spare book fails me by being too short, I’ll open something (free) on my DumbPhone.

    But I’ve got good friends that highly recommend the Kobo and the eBooks they sell there — so much so, in point of fact, that I’m presently researching the “Affiliate” link for the “Support Us” tab of my own blog page.

    I should mention that I’ve already got an Amazon.Com link there (even though they’re evil), and I’ll add one or two more in the (forlorn) hope that some day I’ll start earning more than I spend at the writing game.

  40. Thanks, I really don’t know all the options either. I bought a Nook (for purposes entirely unrelated to actually reading ebooks, as stange as it sounds), so while Barnes and Noble is the easiest option, it is by no means my only option. I’ll check out the Kobo site and see what it can do for m.e

  41. Pingback: Amazon Is Evil: Why Do I Still Link To Them? | The Gnerphk

  42. Something that’s missing from this discussion, I think, is Amazon’s profitability. There are suggestions that Amazon only cares about the “bottom line” and that Amazon’s pricing is inherently unstable because it tries to maintain “high profits and low prices.”

    But one element of that equation is missing — the high profits. Amazon makes almost no profit at all; it focuses on increasing market share (or increasing the market, period). A Slate columnist once sarcastically suggested that “Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers” and that “Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way.”

    Barnes and Noble, who others have indicated they prefer to Amazon, made twice as much money as Amazon in 2013, despite having only 10% the revenue.

    In the struggle between Amazon and traditional publishers on book pricing, what used to be the publishers’ profit margin has been transferred to consumers — not Amazon.

  43. It’s a thought-provoking note, Deadlast.

    Personally, I’m forced to disagree with both you and the Slate columnist, and for two reasons.

    First, Amazon’s market-share strategy is quite valid (albeit long-term); the demise of Borders underlines this. Another illustration of similar success is Netflix profiting while Blockbuster vanished from strip malls across the country. (Owners of strip malls are the big losers there; retail space is fast becoming a buyer’s market.)

    Second, there are other methods of making money as a corporation than by posting a profit, and they are encouraged by the imposition of punitive taxes. I forecast that Amazon will continue posting low profits until they have the opportunity to evade taxes — and I believe these opportunities will present themselves after the next American presidential race. They always do, after all.

    It’s funny; as a country, we tend to prefer to spend money on crime prevention, prosecution, and punishment. This costs a great deal, and to pay for it we increase taxes. High taxes, of course, are the greatest inducement possible to a life of crime in a free society.

    And yet, we still love to fight crime the hard way. Go figure.

  44. Deadlast is wrong – Amazon is avoiding profit in a two-part strategy. First, they drive prices down as hard as they can on physical goods to prevent any competitors for having an easy battle either in big box retail or in the internet space. Jeff Bezos wants to become the de facto king of internet retail. Second, they take all of the money that could have been profit and plow it into growth. Don’t confuse any of that for charity – you only have to watch how they negotiate with other companies or how they treat their warehouse employees to see that they’re not a charity.

    But this idea that taxes foster crime is absurd. Low income earners get the Earned Income Credit. So they’re not really taxed, or their tax level is incredibly low. If you cut all taxes out of their lives, a gross income in the $10,000-$16,000 range still isn’t enough for a reasonable standard of living. It’s okay if you’re a kid living at home, but unlike thirty years ago that no longer describes the majority of minimum wage earners.

    Meanwhile someone like Larry Ellison, Lebron James, Rihanna, Elon Musk, etc… isn’t going to turn to a life of crime if the taxes on them are increased – even past 50%. A tax level that forces them to give up a third yacht won’t make them contemplate robbing a liquor store.

  45. It will, however, encourage them to cheat on their taxes. :o)

    It is evident that the minimum wage is too low; less obvious, perhaps, is the conclusion that raising the minimum wage increases the price of housing in low-income areas, which eventually spreads to impact higher-income areas. In a purely free-market system, the poor will always be with us.

    Is there a fix? Always. The proper question, in my opinion, is this: Is there a palatable fix?

  46. People who want to cheat on their taxes will cheat anyway. That’s not a reason to keep taxes low, any more than the fact that people will murder anyway is a reason to make murder legal.

    Raising minimum wage will have an inflationary effect on housing, food, gas, cleaning services, daycare, etc… but since unskilled labor does not constitute 100% of the cost of those things, the price increases will be less than the added purchasing power for minimum wage earners. It does effectively dilute the purchasing power of people making more than minimum wage, but that’s a price I think a society must be willing to pay.

    The current situation is unpalatable for two reasons. First, it’s unethical to permit an employer to pay workers less than what would afford them a basic standard of living. Second, and more practical, minimum wage earners use a large portion of the public social safety net. That means the other taxpayers are effectively subsidizing the business model of the minimum wage earners’ employers.

    There will always be poor, the question is whether they live like the poor in Denmark or the poor we have in the US currently.

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