Day 1 of Amazon was Jeff Bezos’ idea that he could create an internet marketplace where people come to buy and sell things. In short, he wanted to own all of e-commerce. He’s done a pretty good job at that.
Investors in Amazon invested because they knew that Jeff Bezos was going to make a lot of money by convincing people to shop online versus shopping at the store. They wanted to help him realize that dream in exchange for a share of his profits.
Jeff Bezos has, by all measures, been wildly successful. So successful, in fact, that he’s shifted the vision from owning all commerce to owning all the computers in the world with AWS. AWS makes it so ridiculously cheap and easy to rent a computer that no one in their right mind buys computers to run their business anymore.
I get worried like anyone else does when people like Jeff Bezos realize their dreams of world domination. But I remember a few things:
- They got there by making life better for people.
- When there is a better option, they will disappear and we’ll use the better option.
Amazon is the biggest company around when it comes to e-commerce, but they are not lacking competitors. In addition to companies like Jet, there are thousands of retail stores and distributors who know exactly what Jeff is trying to do and what he has done and are trying to undo it, at least enough that they get the advantage.
Does the government need to step in to accelerate this process? I say no, they don’t. Amazon didn’t get big by government fiat. If they were a company like, say, Comcast, which makes their money by using local governments to grant them monopoly powers, then I would say we need government to step in to undo the damage, but Amazon doesn’t maintain their market dominance by rule of law.
Some people say that Amazon can abuse their great power. True. But everyone can abuse their power, and we have laws that tell us what is and is not acceptable. If Amazon breaks the law, let them answer to a judge. But simply being so good at something that you dominate a market is not breaking a rule.
What if Amazon is the only game in town? I am sure Amazon would like that a lot, because then they can raise prices. But what happens when they raise prices is they send out signals that there is not so much competition here. It is basically an invitation for competitors and investors to challenge them.
I trust the free market to resolve these kinds of issues when they arise. I don’t mind one person having a huge amount of power because he is simply really good at what he does. I mean, we don’t complain when talented athletes or musicians dominate their industries. I think they do a tremendous amount of good by being so popular and so loved that the vast majority of people use their services.
I do fear the government stepping in and mucking things up. Amazon is a great service at a cheap price, and if government were to try and ruin that, it would make all of our lives worse.