Amazon and the death of small businesses

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Arthur Miller sets the first scene in “Death of a Salesman:” “We see a solid vault of apartment houses around the small, fragile-seeming home…”. Like the “small, fragile-seeming home,” the uniquely American spirit of entrepreneurship is suffocating, replaced instead by a sense that big corporations are destined to control the American economy. Businesses, both small and large, are struggling to survive in their wake. 


This Sept. 6, 2012, file photo shows the Amazon logo in Santa Monica, Calif. (AP Photo/Reed Saxon, File)

This Sept. 6, 2012, file photo shows the Amazon logo in Santa Monica, Calif. (AP Photo/Reed Saxon, File)

Small businesses stimulate local economies by promoting innovation and hiring from around the community. They are also critical to the worldwide economy. Small and medium enterprises account for 90% of businesses and more than 50% of the world’s workforce (worldbank.org/en/topic/smefinance), so any trend that may hurt them is worrying.  

Increasing globalization in the past decade correlates with the increasing popularity of massive globally-expanding corporations from the U.S. These businesses have little regulation regarding environmental protection or worker’s rights abroad, enabling them to undercut small and medium businesses, driving them out of business. This trend is embodied by Amazon.  

Amazon has slowly become a monopoly in nearly everything. It sells books, jewelry, clothing, hardware and so much more. Its recent acquisition of Whole Foods gives it an entirely new avenue for growth. According to Slate, in 2009, Amazon offered to buy Quidsi, the company behind Diapers.com. However, when they refused, Amazon discounted its diaper prices by 30%, putting Quidsi in hot water with its investors and putting itself on track to lose $100 million over the next quarter. Eventually, Quidsi conceded to the pressure and sold themselves to Amazon. 

Despite its apparent control over such a considerable portion of the country’s industries, it has managed to avoid scrutiny under anti-trust laws. Whether or not Amazon’s predatory pricing is illegal or not is still up for debate, but it is being allowed to continue because proving monopolies in court is notoriously tricky. A Supreme Court case from 1986 determined that predatory pricing schemes are irrational because they would require the company to take an enormous hit to their profits, and since then, few cases have been brought to court. The court’s reasoning no longer applies to companies as large as Amazon that can afford to lose so much money in the short term for incredible profits in the long term, as shown through the aforementioned acquisition of Quidsi. 


In this June 6, 2019, file photo Amazon CEO Jeff Bezos speaks at the the Amazon re:MARS convention in Las Vegas. Jeff Bezos is the Billionaire behind Amazon. (AP Photo/John Locher, File)

In this June 6, 2019, file photo Amazon CEO Jeff Bezos speaks at the the Amazon re:MARS convention in Las Vegas. Jeff Bezos is the Billionaire behind Amazon. (AP Photo/John Locher, File)

In October 2019, a Wall Street Journal investigation discovered that Amazon sells clothing from Bangladeshi factories that have been blacklisted for safety violations. After the Rana Plaza factory collapse in 2013 that killed thousands, the world was outraged at the companies that utilized cheap and dangerous labor practices to maximize their profits. According to the WSJ investigation, a spokesman said that Amazon expects third-party sellers to consider safety violations, but there is no definite statement in Amazon’s agreement with these wholesalers and sellers that stipulates that they must adhere to such standards. Amazon is now too profitable and too convenient to have to worry about public backlash. Essentially, it can operate without any regulation or accountability.  

At this week’s World Economic Forum in Davos, Switzerland, Chancellor Angela Merkel stated that “the whole way that we do business, that we live and that we have grown accustomed to in the industrial age, will have to be changed. We will have to leave that behind us in the next 30 years, and we have to come to completely new value chains.” The capitalism that we have known for the past two centuries is not sustainable with globalization. Concerns for human rights are not compatible with the growth of big corporations like Amazon. It is clear that there will be no legal accountability for Amazon’s monopolization, but the consequences for letting Amazon continue to grow unchecked would be devastating. 

Ultimately, we are all consumers, but it is more important now than ever to be smart consumers. 


Aarushi Nohria is a a contributor for The Daily Campus. She can be reached via email at aarushi.nohria@uconn.edu.

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