Think Freely Media presents Common Sense with Paul Jacob

Serving Consumers? Punish!

Amazon, monopoly, trusts, antitrust, trade, free trade, big business, economic myths

New media ballyhooer Douglas Rushkoff made waves this week. Citing an un-named friend who went hysterical about’s purchase of Whole Foods, he asserted that such “unease is widespread, and has raised new calls for breaking up Jeff Bezos’s impending monopoly by force.”*

The company has “surely,” he claimed, “reached too far.”

Apparently, serving customers exceptionally well is bad for business.

Yes, he almost totally ignored the pro-consumer benefits of Amazon. Had to — his case makes no sense when you factor in us consumers. He focused, instead, on Amazon’s success in terms of its recent “online and offline retail sales growth” and its control of 40 percent of cloud storage and streaming services.

He went on to spin a bizarre fantasy about how disruptive bigness is in business. His economically illiterate farrago reminds me of the sad case made against pre-antitrust Standard Oil, a company which, during the whole time of its growth prior to break-up, kept on producing more fuel at ever-decreasing prices.** Broken up because of . . . fears about how businesses change. And of bigness itself.

As long as consumers are being served, this reaction strikes me as paranoid. When businesses get big (and even near-monopolistic) and then cease to serve customers, they fail. While serving customers, there is no call for fretting over businesses that move from one success to another  — which is what Rushkoff has the gall to worry about.

The call for Amazon’s break-up over-sells government and necessarily under-serves consumers.

This is Common Sense. I’m Paul Jacob.


* Rushkoff’s piece in Fast Company was the first I heard of such a “call.” Rushkoff is the coiner of the term “media virus” and a sort of populist pusher of market skepticism.

** For the bizarre story of the Standard Oil case, and how it made no economic sense whatsoever, see Dominick T. Armentano, Antitrust: The Case for Repeal (Ludwig von Mises Institute, 1999), p. 41-43, and Antitrust and Monopoly (Independent Institute, 1990), pp. 57-60.

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  1. Marilyn says:

    We need private schools which wouldn’t turn out so many brainless idiots.
    And i am suffering PTS from the abuse by the bureaucrats in the government schools. Cicero described bureaucrats 2000 years ago

    “A bureaucrat is the most despicable of men, though he is needed as vultures are needed, but one hardly admires vultures whom bureaucrats so strangely resemble. I have yet to meet a bureaucrat who was not petty, dull, almost witless, crafty or stupid, an oppressor or a thief, a holder of little authority in which he delights, as a boy delights in possessing a vicious dog. Who can trust such creatures?”
    — Marcus Tullius Cicero

  2. Rick Rund says:

    Yes, if a business is serving their customers well they must be put down. Heaven forbid the customer is treated with civility!

  3. Pat says:

    Normally, I agree with you regarding ‘bigness’, but not everything is so cut and dred.
    There’s the recent case of the drug company that bought the epipen and proceeded to increase its price, since it owned the patent.
    Amazon’s purchase of Whole Foods doesn’t concern me.   Let them mix and mingle it with all their other businesses.  The only condition should be that this purchase will not impede other businesses from competing in the same market.

    • JFB says:

      Pat, the danger is not bigness, but collusion with the government, and/or taking advantage of rules and regulations to stifle or eliminate potential competition.
      The EpiPen, is a perfect case study. The ability to price the product in the stratosphere was through the combination of intellectual property protection and the years of delay caused by the FDA approval process which prevents the sale of non-infringing generic substitutes. EpiPen pricing was brought to you from and exacerbated by those inside the Beltway. It was not the determined by the size of the manufacturer, but rather the prevention of competition in a market where the vast majority of the bills are not paid by individuals out of pocket, but by third-party payers who hide the costs in your taxes and insurance priemiums. The EpiPen incident was the perfect storm. Study it, I have only scratched the surface of the abuses and interrelationships. . .
      The most effective, the only sustainable and truly efficient regulator of prices is an open, competitive and free market. Monopolistic behavior, attempts to control supply or gain “excess” profits, are the signals to the capital market there is a potential for profitable investment. They spur competition, and its controlling effect. The free market regulatory system is automatic, needs no administration, requires no overhead and will be retarded or fail with governmental assistance.
      Amazon’s investment in the food distribution sector is not a problem, it is an opportunity to make Whole Foods better competition and more efficient, with the ultimate benefit accruing to the customers,

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