The winner of Jeff Bezos’s sweepstakes to decide which city would host a new Amazon headquarters was always going to be Jeff Bezos. The losers were always going to be all of us, no matter which city and state coughed up the tax incentives, transit projects, and whatever else they could think of to give the world’s richest man and his massive logistics firm masquerading as an online retailer. We all lose, and now we know that New York City and the Washington, D.C. area lose the most.
It was only ever a test to see how much groveling obeisance politicians of both major parties would pay. It was a display of dominance, a reminder of who’s really in charge here. New York Mayor Bill de Blasio and New York State Gov. Andrew Cuomo — two men who despise one another — put on a press conference with rictus grins to brag about how much they’d given away to Bezos & co. while New York’s subway collapses, its public housing needs $25 billion in repairs, and on any given night over 3000 people are sleeping on the street. “One of the biggest companies on earth next to the biggest public housing development in the United States — the synergy is going to be extraordinary,” de Blasio enthused. And a few weeks earlier, Cuomo’s fawning had reached new heights: “I’ll change my name to Amazon Cuomo if that’s what it takes.” Apparently the governor can keep his name as long as he hands over $325 million in cash and $48,000 per job created (and apparently we can’t just spend that $48,000 per head hiring people to fix the damn subways, Andrew).
The protesters are already in the streets as I write this, and so I humbly offer a demand for some of those handmade protest signs: Nationalize Amazon.
It’s time to swing the pendulum in the opposite direction. Amazon gets what it wants by being so big and powerful that it can bring state governments to heel, well, perhaps no one company should have all that power. When Tucker Carlson and Alexandria Ocasio-Cortez can agree that this giveaway is ludicrous, we are truly through the looking glass.
It’s true that Amazon is hardly the only corporation (though perhaps the most brazen, what with its 14-month drama breathlessly aided by the nation’s business reporters) to pit states against one another for the sweetest incentive package. As The Atlantic’s Derek Thompson noted, “Every year, American cities and states spend up to $90 billion in tax breaks and cash grants to urge companies to move among states. That’s more than the federal government spends on housing, education, or infrastructure.” Labor economist Mark Price of the Keystone Research Center in Pennsylvania (a state which offered Bezos a package so sweet that it would have included workers literally paying their taxes to him) explained in an interview that these deals are usually structured in a way that spreads out over years, leaving future governments on the hook for tax breaks that will “slowly bleed out of the budget” for decades. Austerity compounds, voters get mad as their schools are underfunded, and public transit fails, all so a governor or a mayor can have a photo op.
Amazon gets what it wants by being so big and powerful that it can bring state governments to heel. No one company should have all that power.
This process has its roots in the competition between Southern and Northern states, Price said. Not content with just offering a union-free, low-wage workforce, lower taxes, and fewer environmental regulations, by the 1980s the South had started to offer more targeted incentives to get corporations to ditch their unionized workers and move — though often within a few years these same companies would then pack up again and move overseas. Amazon isn’t a manufacturing company, though; for it to succeed it has to have “fulfillment centers” all over the country. But it can plop its marquee headquarters down in a new city, showing off its most glamorous jobs when in fact its money is mostly made in those warehouses.
In The Atlantic, Thompson calls for Congress to ban this kind of “corporate bribery” or tax such giveaways out of existence, for officials to use their bully pulpit to discourage such ridiculous hand-overs of public money to private pockets. But why stop there? Let’s take Amazon itself into democratic public ownership.
Somewhere in the past few decades we (and by “we” I mean “the two political parties that inexplicably run America”) swallowed the propaganda line that companies create jobs as some sort of gift to the local community, out of the beneficence of their shriveled little hearts, rather than because capitalism doesn’t work without workers. You don’t even have to read all of Das Kapital to understand this basic point — just consider that if none of the underpaid workers who don’t get bathroom breaks showed up at an Amazon distribution center one day, none of your Amazon Prime packages would make it to your doorstep. Those workers aren’t charity cases. They’re the source of Amazon’s value. (Which is about a trillion dollars, give or take a few tax breaks.)
The development of this belief has gone hand in hand with the belief that the government cannot just directly create jobs. Yet it wasn’t that long ago that the same cities now tripping over themselves to give handouts to Amazon did plenty of direct job creation. Remember Washington, D.C. mayor Marion Berry, who spent public money hiring young people at the dawn of the Reagan era. In the 1960s and 1970s, New York had, according to historian Kim Phillips-Fein, “a rich range of social services, ones that made possible a uniquely democratic urban culture.” The city had public hospitals, a free public university system, even public daycare; the shards of the system can be seen in our failing subways and crumbling housing complexes. Indeed, it’s likely that Bezos chose New York and D.C. not because they gave him the most — other cities offered plenty — but because those cities do have the remains of public infrastructure and are the seats of capital and government, respectively. Giving money to Amazon isn’t going to rebuild public hospitals, pay for City University professors, or fix public housing. But the government can, in fact, just do those things itself. One lawmaker at least has proposed doing just that, cutting the subsidy and putting the money into forgiving student debt as a better economic stimulus than Amazon’s handout.
And Amazon gets to do basically whatever it wants because the fact is Amazon doesn’t have competition. It’s Walmart on steroids: instead of having to go to a physical store with physical employees to pick up products, we just have to turn on our computers, noted Price. When a company gets that ubiquitous, it can start to shape economic development itself — as Walmart was famous for doing, encouraging its suppliers to move production overseas to shave a few dollars off of labor costs (you know, wages). Like Walmart, Amazon’s success is due to its ability to force suppliers to cut costs; unlike Walmart, Amazon’s products show up on your doorstep, often courtesy of those public employees at the U.S. Postal Service, after you’ve ordered them on the publicly-developed internet. The argument has been that companies that put smaller competitors out of business succeed because they have “innovated,” yet Amazon began as an online book retailer that was able to undercut brick-and-mortar stores because it didn’t charge customers sales tax. And dodging taxes has remained central to its business model. How much have we subsidized the growth and dominance of Amazon through tax breaks, witting or unwitting?
Amazon is unique in another way; as Malcolm Harris noted at Medium, its success is because it behaves more like a planned economy than a profit-seeking entity in a competitive market.
“In fact, to think of Amazon as a ‘market player’ is a mischaracterization. The world’s biggest store doesn’t use suggested retail pricing; it sets its own. Book authors (to use a personal example) receive a distinctly lower royalty for Amazon sales because the site has the power to demand lower prices from publishers, who in turn pass on the tighter margins to writers. But for consumers, it works! Not only are books significantly cheaper on Amazon, the site also features a giant stock that can be shipped to you within two days, for free with Amazon Prime citizensh…er, membership.”
The bigger it gets, the more it is able to force other companies to meet its demands, and the more efficient it becomes. And Amazon, Harris wrote, has ruthlessly invested in size above all, moving into new markets — sure, why not buy Whole Foods? — as quickly as it can. There’s an irony in all this: austerity has meant there are increasing areas for a megacorporation to offer its services, yet the continued tax giveaways to Amazon mean more austerity. They are creating the problems they purport to solve. So why don’t we solve the problem, and take it over?
Price pointed out that there’s a shift in economists’ thinking about competition in recent years; people used to argue that it was undemocratic for corporations to be big enough to influence public policy (remember those $700 billion bank bailouts because the banks were “too big to fail”?). These days, though, Price said, “Most people in commanding heights of the economy think that there’s nothing wrong with companies that are monopolies as long as they’re not doing something that’s clearly anticompetitive.” The argument is that they’re efficient, reducing prices and improving people’s quality of life. But, Price said, “If one online retailer is the most efficient way to do it, there’s a case to be made that we should regulate it or put it under public ownership so that we control the decisions they make.”
Austerity has meant there are increasing areas for a megacorporation to offer its services, yet the continued tax giveaways to Amazon mean more austerity.
The opposition is simply ideological: some people simply believe that private corporations are always more efficient, as Price said, “we should let the really smart people at Enron, er Amazon take care of us.” Or if you’re too young to remember Enron, consider Carillion, the private outsourcing firm in the UK that ran all sorts of public services for millions in profits, right up until it collapsed in scandal earlier this year. Those services once were done by public employees, without millions in profits skimmed off the top. If you split Jeff Bezos’s $137 billion up, you could give all of Amazon’s 613,000 employees — you know, including the ones who recently were supposed to be thrilled with a raise to $15 an hour, except that it came with a cut to stock options and monthly bonuses? — a bonus of $100,000 and still have plenty left over to cut prices even lower. Somehow we never talk about massive salaries for executives as inefficiencies; that’s saved for the workers at the bottom, dehumanized into “labor costs” and always something to cut.
The more compelling argument against nationalization, perhaps, is that Amazon is already at work on the kinds of surveillance technologies we don’t want the government — including agencies like ICE — to have. Yet as Price noted, “What’s the difference between Big Bezos and Big Brother?” Amazon is already more than happy to sell those technologies to the U.S. government. It’s unclear that we should feel comfortable with such technology in the private hands of capitalists, either. A democratically controlled company would give us a say that we certainly don’t have with Bezos calling the shots.
Other than the predictable shrieking from the usual quarters, I expect some will say nationalizing Amazon is simply an unrealistic demand. To which I reply: sure, yes, although it wasn’t that long ago we were talking about nationalizing banks (still a good idea). But the point of making such demands in public, now, is to help make possible a political context in which they seem less fantastic. So no, Donald Trump’s government is not going to do it, nor will one run by any of the likely 2020 candidates — not even Bernie Sanders, sorry. (Though over in the UK, the Labour Party under Jeremy Corbyn and John McDonnell isn’t afraid to call for nationalizations.) So contra that guy in my Twitter mentions, the point of calling to nationalize Amazon is to challenge the idea that Amazon should have more power than the democratically-elected governments of states or countries. It is to say that actually, we don’t have to continue making rich people richer so that they might throw a few coins toward the rest of us. We can decide what the city, the country, even the world we want to live in should look like.