The same old ‘Capitalism is broke’ story is playing in America right now as we continue to point fingers at each other and play the blame game. But we know who to blame, the top earners and tech oligarchies who have strongholds on markets.
Free market capitalism is good. At its core, capitalism is peaceful voluntary exchange in a free market – which incentivizes innovation and growth.
However, as the rich get richer and the middle class dissolves, income inequality is greater than its ever been before. Middle-class life is now 30% more expensive than it was 20 years ago. Most Americans are no longer middle class, and over half have fallen into the lower income bracket.
There are a number of forces, both domestic and global, that affect income inequality. U.S. companies continue to outsource, invest, and increasingly rely on technology to reduce costs – which in theory is cost-saving and good business. But as the number of service related jobs increases, the level of pay is much cheaper.
The contract/gig-economy is great for employers, not for employees. The example that comes to mind is ‘get your side hustle on’ [Uber]. There’s nothing wrong with people wanting to make an extra buck, but people aren’t doing it because they want to, they’re doing it because they have to. Longer hours for lower wages.
Just how bad is income inequality in this country?
- 63% of Americans can’t afford a $1,000 Emergency (1)
- 51% of American workers make less than $30,000 a Year (2)
- Since the 20th Century, the top 1% of America’s income earners have doubled their share of the nation’s income (3).
The simplest, most used idea is to blame the sheeple.
‘Go to college, get a good job, start a cool-tech company – be an entrepreneur!’
Well, it’s hard to do these things when the original tech entrepreneurs are systematically robbing the American labor force of fair wages and opportunity.
Yes, the average consumer saves on costs associated with consumption (micro), but the labor business model is unsustainable (macro).
Of the top 10 biggest companies in the S&P 500 Index, only 2% of the total 500, make up almost a quarter of the total market. If any one of them had a falling out, it would have monumental impact on the market. Why are the scales so heavily skewed?
The ‘move fast & break things’ mantra of capitalistic technology business practices is similar to an oligarchy. An ‘oligarchy is a form of power structure in which power rests with a small number of people.’ In our tech-driven world, it’s Amazon, Apple, Google (Alphabet), Facebook (Instagram), and Microsoft.
We are the richest country in the world with the largest G.D.P., and yet half of all Americans are poor.
Why aren’t more people upset or doing something about this? Because people are distracted, divided, and fueling their emotionally-driven limbic systems via Social Media and instant gratification. Can we blame them?
An Amazon study, which included data from 500 Amazon customers, estimated that Amazon Prime subscribers spend $1,300 per year. Some Americans spend more money on Amazon goods & services than saving for an actual emergency.
As political decision makers are quietly being paid (and not very much) – profit, greed, and ethically unsound business practices are rapidly changing markets. Statistics have shown there is a direct correlation between wealth and how it reduces compassion and empathy.
The Real Amazon.com, Inc…
Amazon dominates online commerce (~50%), and has a monopoly in cloud computing services. Thanks to the taxpayer dollars, the amazing Amazon is thriving – receiving over $1B in tax breaks and government funded programs like food stamps.
Netflix, Facebook, LinkedIn, Adobe, and NASA are just a few of Amazon’s clients that use Amazon’s AWS (Amazon Web Services) to host their content.
Here are six segmented industries that Amazon currently has, or wants to have, a majority stake in:
- What you watch & listen to
- Smart home devices
Amazon & Intelligence Agencies
What’s more frightening is that Amazon recently launched a ‘secret service’ AWS platform specifically for U.S. Intelligence Agencies like the CIA, NSA, and Pentagon. Other cloud hosting platform companies like IBM, Microsoft, and Oracle can’t even compete with Amazon’s ‘winner-take-all’ government cloud-computing contracts.
The Pentagon’s draft bid, called the Joint Enterprise Defense Infrastructure (JEDI) initiative, is likely the largest single government cloud-computing contract yet. A 10-year deal is thought to be worth as much as $10 billion.
“The U.S. Intelligence Community can now execute their missions with a common set of tools, a constant flow of the latest technology and the flexibility to rapidly scale with the mission,” Amazon Web Services vice president Teresa Carlson said.
With the advent of Amazon’s Echo devices powered by Alexa – they have pretty much bought entry into your home. The devices record, track, and store everything. Vast, almost inconceivable, amounts of personal data are stored on their servers – and some of Amazon’s biggest clients are branches of the intelligence agencies? Hmm..
Jeff Bezos (the Founder, CEO, and Chairman of Amazon) is the richest man in the world, who’s net worth is over 160 Billion dollars. In 2018, Bezos’ net worth rose $67 Billion, or $8 Million per hour. Let that sink in.
All the while he sits back and enjoys the view from his literal 200-ft Clock Tower that cost 42 Million dollars. Not to mention his multi-million real-estate properties and commercial spaceflight company called Blue Origin. He also owns the Washington Post, Zappos, WholeFoods and much more.
When the news broke that Amazon was acquiring WholeFoods for $13.4 Billion it sent shockwaves through the grocer industry. Grocer stocks took a plunge after the announcement, and some have even filed bankruptcy. Amazon acquiring WholeFoods was a strategic, cut-throat move. It was supposed to lower the price of groceries with Prime memberships, but after the dust settled, the Prime discount came out to be approximately $1.54 on a $400 cart of groceries.
Amazon paid no federal taxes in 2017. Their tax return is not public, and the SEC was given a misleading report. Amazon reported $177 Billion in profit (up ~30% since 2016) paid no federal taxes, and actually received a $137 Million tax refund.
Not only are they not paying taxes, they treat their employees so poorly, a third of Amazon employees actually qualify for Federal Welfare Benefits.
Insidious Fulfillment Centers & HQ2
The Amazon employees who work in the ‘fulfillment’ centers are overworked and underpaid. Amazon tracks how fast the warehouse workers can pick and pack items from shelves, with strict break times and infeasible target goals. The same insidious processes are being implemented with their new Amazon Flex driving program: “Be Your Own Boss. Great Earnings. Flexible Hours.”
“For those of us who worked on the top floor, the closest toilets were down four flights of stairs,” Bloodworth told The Sun. “People just peed in bottles because they lived in fear of being disciplined over ‘idle time’ and losing their jobs just because they needed the loo.”
“Amazon is also pitting state and local governments against each other in a Hunger Games-style contest over the location of the company’s new headquarters, the company’s new disclosure should cause some consternation among the state officials who have been most willing to pony up billions of dollars in tax incentives.”
For a company that treats their employees like trash, doesn’t pay taxes, and continues to “disrupt” retail, grocer, and soon to be healthcare industries, it’s baffling that business leaders continue to praise Amazon’s business practices when they are so corrupt.
It’s not just Amazon
We are currently living in the era of Mergers and Acquisitions, one that places profit over everything else. When it comes to tech monopolies, Amazon is ‘the-big-one,’ because of its scaleability & monopolization.
There are many others deploying the same strategies: subsidize the labor force with taxpayers dollars ( food stamps, Medicaid, housing assistance, etc.) and then stamp out the rest of the competition through government regulations and intense lobbying efforts.
As it turns out, if you can bankroll the narratives through social media, centralized news outlets, and political lobbying efforts – one can mold the market as they see fit. As long as “the consumer is winning”.. the SEC looks the other way. Tech Oligarchs do not play by the rules and have no intention of conforming to them.