Amazon, Facebook and Google: The new robber barons? By Daniel Kishi.
Jeff Bezos, CEO of Amazon.
Earlier this month Amazon, announced its plans to establish a second headquarters in North America. Rather than simply reveal which city would become its second home, the Seattle-based tech company opted instead to open a bidding war. In an eight page document published on its website, Amazon outlined the criteria for prospective suitors, and invited economic developers to submit proposals advocating for why their city or region should be the host of the new location.
Its potential arrival comes with the claim that the company will invest more than $5 billion in construction and generate up to 50,000 “high paying jobs.” Mayors and governors, hard at work crafting their bids, are no doubt salivating at the mere thought of such economic activity. …
Reporters speculate that the winner of the sweepstakes — in no small part to the bidding war format — could be forced to cough up hundreds of millions of dollars in state and local subsidies for the privilege of hosting Amazon’s expansion.
Amazon has long been the beneficiary of such subsidies, emerging in recent years as a formidable opponent to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington, D.C. organization dedicated to corporate and government accountability, Amazon has received more than $1 billion in local and state subsidies since 2000.
With a business plan dedicated to amassing long-term market share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive, Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon’s growth.
Advocates of free market enterprise should be irate over the company’s crony capitalist practices and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded, Amazon’s shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic left’s emerging war against monopolies. …
By using highly sophisticated algorithms, Facebook and Google receive more than 60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating a host of economic incentives that pollute editorial autonomy. …
The events of this summer underscore the immense political power wielded by our economy’s corporate giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from this summer could serve as a rallying cry in a bipartisan war for independence from our corporate crown.
hat-tip Stephen Neil