I remember the young and tender age I was when I was horrified to have explained to me the concept of
“the company store,” the store in the company-owned town, which was the only place to buy things, where those things were priced at a price you couldn’t really quite afford so you were perpetually in debt to the company, which was the only employer in town, that didn’t pay very much so that you could never earn enough to leave town. . .
Peonage! My mind boggled at the concept— to be so unfree, cut off from any choice! Could such inconceivable traps have ever existed?
Symbolizing how absolutely closed the system was, some companies even issued their own currencies, their own
“money” or company
“script” to pay workers’ salaries that they would have to spend at the company store. Safely in the past?: Just a
few years ago, a division of Walmart (Wal-Mart de Mexico or Walmex) was doing this with its Mexican workers paying workers with vouchers, in lieu of cash, redeemable at its outlets until the Mexico’s Supreme Court ruled this violated the Mexican constitution.
Imagine the way that a private corporation could once take over and become
everything!
These days Amazon, famous for paying its workers low wages, has just become the
second biggest U.S. Company as of September 2018. We think of Amazon as having
low prices, unlike the prices of the company store that were always
too high, but it is becoming increasing hard to shop elsewhere and the real price we are ultimately paying may be an illusion as Amazon is allowed to run rampant as a predatory monopoly putting all other competition out of business.
Amazon’s inescapability will be brought home for New Yorkers in another, yet more intense way now that Amazon is landing a
“headquarters” in Queens’ in Long Island City. Flexing the musculature of its enormous bigness quite openly, we see Amazon being allowed to take over our city’s governance with New York state powers be turned over as well. City and state officials are aiding and abetting Amazon in the process are letting Amazon do that. That is thanks principally to Bill de Blasio as New York City's mayor and Andrew Cuomo as New York State's governor.
State and City Subsidizes For Amazon- A Popular Topic
The first thing you hear about Amazon’s plan to land a
“headquarters” in Long Island City is that in exchange, to
“lure” Amazon here, it will be getting an amazing glut of subsides including tax exemptions, from both the city and state plus the federal government as well. How much?: It’s clear that the amounts can only be spoken of in terms of more than a billion+ dollars multiplied by what? The estimates of the total subsidies (which we will have to come back to) range. As they were calculated and negotiated in secret and have not been thoroughly or openly vetted by any economists, we should not make the mistake others may make of pretending that we truly know much about this deal so soon after its revelation. There are even nondisclosure agreements about making much of this information public that apply to the future.
The most fitting quick observation about these massive subsidies is that other tech giants, Google, Facebook and Twitter, all have very sizable presences in New York City with none of them receiving such subsidies.
Amazon "Give Backs"?/Sizable Acreage
The next thing I heard (on the radio- perhaps a WNYC radio excited announcement of the deal?) was how Amazon was expected to be
“give back,” or might
“give back” in things in return. . . . It’s said that Amazon with its development partners
will “build a 600-seat public school, affordable space for manufacturers, arts groups and early-stage tech companies, and a 3.5-acre waterfront esplanade and park” while building
“1.15 million square feet of office space” Anable Basin properties are part of the more than one million square feet of property Amazon is expected to take over. (One million square feet is 22.9 acres, comparable to the Atlantic Yards site excluding the additional eight acres owned by developer Forest City Ratner
before that Ratner mega-project was launched. Last year, a plan to rezone 15-acres in the basin area was being spearheaded by a family-owned plastics factory (That company is Plaxall) that controlled 12.6 of those acres. Amazon’s plan involves taking over the bulk of that land– but not all the family-own acres– plus obviously more elsewhere.)
New York Times architectural critic Michael Kimmelman, who sometimes splits the baby trying to make happy both activists and the powers-that-be, made the embarrassing suggestion that rectification could be made with respect to Amazon’s arrival if Amazon invested in NYC’s
“public libraries” and
“local school programs.” See:
Michael Kimmelman’s Unfortunate Suggestion That Amazon Invest In NYC’s Public libraries (per Eric Klinenberg)- See: “Amazon’s HQ2 Will Benefit From New York City. But What Does New York Get?” - Kimmelman balanced his essay's seeming enthusiasm for Amazon's arrival in this respect slightly: He contrapuntally glowered about the Amazon giant’s plunking down here and the
“insularity” and libertarianism of the tech industry in general.
Do we really want
“gifts” or
“give-backs,” from giant mega-monopolies, so labeled in intentionally confusing narratives as we allow such entities to take over sections of the city supplanting government, and doing so in the name of `
private/public partnerships'? We’ve seen this before. For instance, when the MTA, sending its head Joe Lhota to a ribbon cutting was
promoting a
“$76 million Barclays Center subway station” as a
`gift' from Atlantic Yards developer Forest City Ratner. The notion gets pushed with the too-good-to-be-true con that
“not a cent of it came from taxpayers’ pockets,” despite the fact that, all told, Forest City Ratner was walking away with overall project subsidies totaling $2 - $3 billion.
Last week there was a NYC Public Advocate Candidates Forum in Brooklyn Heights. Sixteen self-proclaimed candidates for that city-wide elected office took part in panel discussion (and a few additional candidates who have thrown their hat into the ring weren't there). Amazon was naturally discussed. It was discomfiting to hear how many of those candidates thought that Amazon's arrival in Queens should simply be accepted as a given and that all that needed to be discussed was what Amazon would
"give back," as if this was the way that government should work. The candidates are too numerous to inventory their Amazon positions here, right now.
Rethinking So-called "Charity" As Wealth Concentrates In Those With Agendas
The unbelievable math, simply ignoring the facts to parade, as window-dressing these ersatz
“gifts,” brings to mind
conversations now being had advising us to reexamine and not be taken at face value the theoretical benefits of the so-called
“giving” by the wealthiest in our nation. Anand Giridharadas who has addressed the subject in a new book
“Winners Take All- The Elite Charade of Changing the World” has questioned the ethos where
“The winners of our age must be challenged to do more good, but never, ever tell them to do less harm.”
More succinctly, Mr. Giridharadas
has said that while
“giving back” sounds nice, its not the same as
“taking less.”
Furthermore, given the difficulty of
“looking a gift horse in the mouth,” such private sector
“gifts” are harder to criticize than what is provided by elected officials. That sadly is the case even when such
“gifts” reflect an agenda on the part of the wealthy donors and an effort to shape the world as they would like to see it shaped. Take, for instance, this undemocratic result: how a school district can wind up with less funds for what the public wants funded when the (Bill and Melinda) Gates Foundation pays the school district on condition that it divert its available funds away from other expenditures that were the district's priorities; instead the funds go to a questionable pet project the foundation is promoting. Or very similarly, consider the funds that get advanced to pay for schools to be converted into private charters?
Under those circumstances, do we want our public schools furnished as gifts from the private sector? Isn't it preferable to have public services provided by our own elected governments whom we can ultimately hold to account? (If we don't want our schools taken over by the private sector, what about
our libraries?) But what is, in fact, happening in this day and age is that we are more and more, in all sorts of ways, turning our governance over to private corporations like Amazon.
David Callahan whose new book is
“The Givers: Wealth, Power and Philanthropy in a New Gilded Age,” writes how, as government is starved and retreats while the influence of the superwealthy increases, the new
`philanthropies’ have become
“a much stronger power center,” that
“in some areas, is set to surpass government in its ability to shape society’s agenda.” Callahan has also previously pointed out that this
“growing say over central areas of civic life like education and public parks . . is often wielded against a backdrop of secrecy.” As that shift in influence occurs, it is often with the superwealthy like Bezos, the world’s richest man, contributing to that
starvation of government as, for example, he sidesteps payment of sales tax.
Not Playing Fair Amazon Takes More, Never Less
Let’s be clear, despite some similarities in the eyewash aspects of it, Amazon’s dealings with respect to coming to Long Island City were not an example of such
`philanthropic’ equations: What transpired, with respect to Queens was supposedly in
`negotiations,’ supposedly adversarial. However, with it being mostly all in secret, it was apparently mostly about the government’s surrendering of governance decisions and the norms of government supremacy to give Amazon things it was demanding, things there is little reason to believe Amazon deserved or should have been given.
It can be readily argued that Amazon has never been about playing fair, that its extraordinary growth (while paying shareholders little) has been about benefitting from a tilted playing field, not paying sales taxes, taking advantage of its monopoly status to squelch competition. It's resulted in a huge amount of value others have created in the economy being reshuffled to wind up in the Amazon/Jeff Bezos coffers.
It is not in Amazon’s nature to
“take less.” When Seattle passed a small tax on businesses making more than $20 million in gross revenue in order to address its homeless crisis (greatly acerbated by skyrocketing rents), Jeff Bezos and his Amazon, Seattle’s biggest employer and the second biggest company in the United States, used their political heft to crush the tax, getting it repealed. That was the absurdity even though Jeff Bezos as the world’s richest man has been
calculated to be making
“roughly $191,000 per minute” while the median Amazon employee’s salary is just
$28,000 and many of Amazon’s workers, impoverished by the low wages the monopoly pays, collect food stamps.
Amazon's "Headquarters" Bidding War Fake Out
The huge subsidies that Amazon is to get coming to New York are because Amazon used its monopoly hugeness to announce that it was holding
“an auction” amongst American cities to locate its
“second” (“HQ2") headquarters. That proved to be a giant fake-out: Amazon is
not delivering its end of what it advertised; its so-called
“second headquarters” will just be some, maybe not all, of its current growth and expansion at
two locations, New York City and Crystal City, Virginia just outside of Washington, D. C. and only a
“stone’s throw away from the Pentagon.” (So recycling these hyped up baloney terms is NYC getting
"H2Q/2" or maybe
"H2Q3"?)
In other words, unconstrained by anything that was
"bargained for," Amazon is simply following through on what it likely wanted to do anyway, have a major presence, and therefore influence, in the nation’s
political capital and in its
financial capital, the nation’s two major power centers. Ask yourself why you think Jeff Bezos bought the Washington Post; it's for the very same reason. This division putting some of the Amazon offices in a separate location near the Pentagon will probably also help Amazon manage the flow of those of its workers needing
security clearances to do the military work Amazon does for the Pentagon and CIA.
The deception of the
“auction” was exquisitely characterized by New York State Assemblyman Ron Kim (also one of the announced candidates running for Public Advocate) who wrote an pre-announcement opinion piece opposing Amazon’s Long Island City arrival with law professor and sometimes political candidate Zephyr Teachout. Ms. Teachout, an expert and activist with respect to corruption, has been an alert critic of the way that monopolies are taking over our economy together with the opposing American tradition that says they shouldn’t, because monopolies make slaves of us. In 2015 she gave an address at Cooper Union:
“The Monopoly Moment: The New Anti-Trust Paradox.” Assemblyman Kim and Ms. Teachout wrote (in part):
. . this whole tournament has been a sham. There is no HQ2. Instead, Amazon is expected to announce a fairly routine expansion, adding new satellites in Queens and in Northern Virginia. The countless hours spent courting Amazon were undoubtedly valuable for Amazon: the company gained free media coverage and untold amounts of economic data from each bidding city. But it has been a terrible waste for those cities and states whose public servants labored to win a prize that would never materialize. Even for the biggest Amazon boosters, such casual dishonesty should be cause for consternation. It’s like getting a marriage offer along with a confession of infidelity.
* * *
If Amazon indeed locates a substantial part of its business in New York, serfdom is the style of “partnership” the city should expect. Despite the familiar promises, Amazon is not a good partner. Not for the cities it occupies, not for the merchants who depend on it, not for the workers it employs. The company does not seek partnership; it seeks control.
See: Opinion-
New York Should Say No to Amazon- A city that thrives on the energy of its neighborhood merchants should not offer incentives and giveaways to an internet giant known for squashing small businesses, November 9, 2018.
Government's Surrender of Its Real Estate Tax Power
One of the fundamental government powers that will be surrendered in the Amazon deal is that Amazon will
not pay real estate taxes. Instead, the Amazon section of the city, carved out from the rest of the city will make payments in lieu of taxes pursuant to a
“PILOT” agreement. All the reasons this will be attractive to Amazon are reasons it will not be good for the public, that includes things like suspicions about the amounts paid, inability to challenge and rethink them going forward, and, like the increasing patchwork of other areas affected by such PILOTs (Brooklyn Bridge Park, parts of Atlantic yards/”Pacific Park”), being cut off from the vicissitudes of the city and communal obligations of all New Yorkers to address them.
Government's Surrender of Land Use and Zoning Powers
Another of the fundamentals of local governance surrendered to Amazon will be
zoning and
land use controls. Density and how the land will be used will not be subject to the normal way such controls are supposed to be thought through and established with the normal City Council and community reviews. Just one way this is showing up is that Jeff Bezos has been promised his Amazon site will come equipped with a helicopter landing pad. Helicopter landing sites are a serious land use issue. Helicopters are dangerous, which is why, after a
1977 accident, the helicopter pad atop the MetLife building, formerly the PanAm Building is no longer active. Helicopters are also
extremely noisy, not to mention, as anyone who has been around a landing site knows, their fuel has a pronounced unhealthy stink to it.
One Way Government Power Is Lost: Regulatory Capture
The surrendering of these governmental powers results from the involvement of the state’s Empire State Development Corporation (ESDC or ESD), a quasi-governmental, unaccountable public benefit corporation that is notorious for its being subject to
“regulatory capture,” which is to say that rather than being careful to ensure that public benefits are achieved, the agency answers to its private developer clients (in the case it will be Amazon and its agent developers) to give them what they want.
Privatizing Government's Power of Eminent Domain (To Push out Competing Economic Life)
Another power that ESDC has is the power of
eminent domain, the power to condemn and take property from other private landowners for
“public use.” In recent years, as with Atlantic Yards, that
“public use” has meant giving land or property over to another more favored private developer. In the case of Atlantic Yards it was used to acquire land to build a
private arena (infamously named "Barclays"). That use of eminent domain may not have been actually necessary given that Forest City already owned other adjacent property. Eminent domain was also used to a very large extent push out the competition of other developers building in the Atlantic Yards vicinity. . . Oh, wait–
pushing out the competition?– Exercising of that superpower of government sounds like a perfect match for our Amazonian outfit.
. . . Before government steps in to pick the winner, people should stop and think. Such shoving aside of other economic life for the promises that a property owner/developer with the political heft theoretical offers when asking that these powers exercised on its behalf often doesn’t go very well at all. When the Supreme Court’s ruling in the Kelo v. City of New London case validated such shenanigans in New London, Connecticut, a huge swath of land was cleared to be turned over to Pfizer. The land, all other properties removed from it, wound up as an
abandoned, empty grassy field.
Forest City Ratner, taking over with eminent domain the 22 acres that is formally considered Atlantic Yards project (distractingly renamed "Pacific Park" out of embarrassment and to side-step bad press), has probably slowed the development in the area where it supplanted its competitors. Forest City Ratner (its heirs and assigns including the Chinese government) has kept few of the promises Forest City Ratner made in connection with everything it was given by government officials on a preferential, essentially no-bid basis. That mega-project, once projected to be complete in 2013, is years, perhaps decades away from completion. At one point the revised estimate of the then head of ESDC was that it could take
perhaps 40 years in all to complete. Meanwhile the developer has destroyed affordable housing it will never replace.
Because ESDC’s powers are so phenomenal, its procedures require that it only come in to exercise its powers in an area if there is a letter from the locality (in the case New York City) inviting it in to supersede local laws. In this case that letter is probably being delivered
by Mayor de Blasio. However, perhaps to give de Blasio cover, there was another letter signed by a slew of local electeds, city council members, saying that they wanted Amazon to come to New York. These city council members are now, en mass,
disavowing what they previously signed. Time will tell whether their display of this announced change of heart will evolve into effective action.
Supplanting Other Economic Life With Subsidies And Preferences (Falling Short of Eminent Domain)
Whether or not ESDC actually exercises its condemnation powers in any respect, the preferences and subsidies that are to be given Amazon will have an exiling effect pushing out others. Maybe the Amazon plan will ultimately provide
“600-seat public school, affordable space for manufacturers, arts groups and early-stage tech companies,” but at a Department of Education building at 44-36 Vernon Boulevard, approximately 1,000 staff will be
kicked out of the area. The cost for them to pull up stakes and rebuild is probably
not being calculated. Further, with the redirection of two sites intended for residential development to Amazon, those sites
will not produce the approximately 1,500 units of affordable housing that was in the works. So that lost housing must be considered as another cost.
All of the preferences and subsidies for Amazon will serve to push out, displace and deprive of opportunity other economic activity that would be looking to have a place in Long Island City’s relatively
hot and active real estate market. There is a flip side too: Those pushed-out competitor businesses will also be unhappily affected by diminished city services with Amazon-occupied properties subtracted from the tax base.
Our Government's Bet on Amazon Could Align New York With Amazon's Policies
When the government is incurring so many costs on behalf of Amazon, when it is putting so many eggs in the Amazon basket, it can affect long term alignments. . . . When I was at the state finance agencies we bonded out the state’s settlement income that
resulted from successfully suing the tobacco companies, when New York State joined as plaintiff with other states around the union represented by their attorneys general. What this meant was that the annual amounts that the tobacco companies had agreed to pay New York State as damages for dissemination of false and misleading information about cigarettes plus the consequent harm to the health of citizens and increased medical costs to the state were collected up front by the state through our issuance of billions of dollars in bonds, which were to be paid off over time from the payments the tobacco companies were obligated to make under the settlement.
Given the bonds were supporting the tobacco companies’ payments, I remember being personally worried that the state, wanting its bonds not to default, might acquire a vested interest in the continued financial health of the creditor tobacco companies through the issuance of the bonds. I worried that the state might therefore want company cigarette sales to do well so the companies would always be able to make the payments unhampered by declining consumption. But, for the very reason that the states had sued the tobacco companies, the state still needed to pursue health, safety and welfare goals; it still needed to continue to exercise its police powers to cut down on smoking and run tobacco consumption prevention programs. In the case of our New York State bonds, that likely conflict of interest was forestalled through the purchase of bond insurance: If defaulting tobacco companies didn’t make their payments the bond insurer would have been left holding the bag after paying off the bond holders; it would be the state's problem.
Quite surely, one reason Amazon is moving here to the financial capital is to more closely align itself with the powers here. But New York, as a policy matter, has to think about whether it will want to endorse Amazon’s monopoly practices. It will also need to sort through its position on Amazon’s
involvement and roots in the military, Amazon’s relationship with the CIA and the general ongoing implications respecting surveillance as the tech sector of the economy evolves. It is worth remembering that once upon a time New York, a financial capital in the 1800s, was a northern city, but because of New York banks investing the cotton trade and
plantations long after the legality of the slave trade itself was ended in the United States in 1807, New Yorkers were complicit in the perpetuation of
slavery.
It’s easier to allege what you are that you are acting in a morally neutral way, that what you are doing is
“just business,” if you don’t have sunk costs invested someone else's enterprise. If your investment means that you have essentially become their partner, you will be quite reluctant to see their business succumb.
Does Alliance Between Government and Monopoly Produce Fascism?
Law professor Tim Wu, who ran for the Lieutenant Governor slot on the ticket with Zephyr Teachout when she was running for governor of New York State has his own anti-monopoly ideas.
He warns of a link between monopoly control and the rise of fascism and totalitarianism.
Mr. Wu who has already written
two excellent books, one
“The Master Switch” helped earn him the title as
“father of the concept of net neutrality.” He has a new book out:
“The Curse of Bigness: Antitrust in the New Gilded Age.” He recently adapted his book into an op-ed for the New York Times Sunday Review section:
Be Afraid of Economic ‘Bigness.’ Be Very Afraid.-
In the 1930s it contributed to the rise of fascism. Alarmingly, we are experimenting again with a monopolized economy. November 10, 2018.
Explaining how control by monopolies contributed to the rise of fascism in the 1930s, particularly in Nazi Germany, Wu explains that
“extreme economic concentration” creates economic conditions ripe for dictatorships when
“democratic accountability” is avoided as loyal alliances are formed between those in power and large enterprises that then feel themselves to be above the law. He points out how there is
“there is a direct link between” such concentration
“and the distortion of democratic process” given the escalating imbalance of power as huge corporations pursue their political goals.
In order to flat out reject it, Mr. Wu alludes to a line of thought, championed Robert Bork (of Saturday Night Massacre and rejected-supreme-court-nominee fame) and the
“Chicago school” of law and economics. Bork and the Chicago school argued to change antitrust law by saying that antitrust law should not concern itself with the political implications of concentrated economic power. Wu concludes, rejecting that notion as false, saying:
We have forgotten that antitrust law had more than an economic goal, that it was meant fundamentally as a kind of constitutional safeguard, a check against the political dangers of unaccountable private power.
As the lawyer and consumer advocate Robert Pitofsky warned in 1979, we must not forget the economic origins of totalitarianism, that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.”
It is probably worthwhile to remember that one of the sometimes used
definitions of "fascism" is an alignment that merges government and
corporate power.
Will Alignment With Government Allow Amazon To Write The Rules of The Market Place?
Earlier this year Stacy Mitchell, wrote a cover story for The Nation titled
“Amazon Doesn’t Just Want to Dominate the Market—It Wants to Become the Market.– The company is a radically new kind of monopoly with ambitions that dwarf those of earlier empires.” February 15, 2018.
Speaking about Amazon on Democracy Now after the HQ2 deals were announced, Ms. Mitchell said that Amazon, increasingly the gatekeeper, was essentially
“privatizing” what should be an open market where the rules that govern the buying and selling of goods are set by the public and open to view. Instead, Amazon is making commerce its own private arena where Amazon, in control,
“sets the terms of trade” and
“basically creates the rules and regulations by which other companies and other participants are allowed to operate” rigging things to increasingly pick
“the winners and losers,” and it using that
“power to push others out of the marketplace and to gain more power for itself.”
She painted the picture
saying, in part:
Amazon is so dominant in so many areas. It’s now capturing one out of every two dollars that Americans spend online. . . it controls the underlying infrastructure for a lot of the internet—you know, over 40 percent of the world’s cloud computing capacity. It’s increasingly moving into shipping and package delivery. It’s taking on UPS and the Postal Service. It has the largest market share in home voice systems, through Alexa. And on and on it goes.
But I think, rather than think about Amazon as being dominant in any of these markets, the way to understand what this company is all about is that Amazon is about controlling the essential infrastructure that other companies need to use in order to reach the market. Its online platform, more than half of all product searches online now start at Amazon’s website. And what that means is that if you’re any company producing or retailing anything, increasingly, if you want to be able to reach consumers, you have to become a seller on Amazon’s platform. And what that means is that Amazon now controls your business. They have the ability to gather data on what you’re doing, to use that data to compete against you. They can levy a kind of tax on your trade. They can demote you in the search results. They can retaliate against you if you complain.
Remembering how Amazon is a giant information vacuum, sucking up tons of detailed information about its consumers and about the retailers selling to them through Amazon, allows you to understand the worries some have about how Amazon, with its
"auction" ploy, managed to induce almost all the major cities in the country, all the economic centers, to collect, organize and supply to it vast amounts of confidential data about local economic activity. Then think about Amazon's disposition to use information that only it is privy to tilt the playing field in its direction. Now realize what an advantage the information Amazon now has in deploying its resources in terms of real estate investment and economic planning.
Amazon's Potential To Control Public Discourse
In her Nation cover story Mitchell noted that as it
“inevitably transfers wealth to the few” the Amazon setup is also turning over to that lucky elite even the ability to regulate public discourse, plus much more, endowing them with:
the power over such crucial questions as which books and ideas get published and promoted, who may ply a trade and on what terms, and whether given communities will succeed or fail.
Her article points out that Amazon having aggressively sold books and other items below cost shutting down bookstores
“in droves,” today
“nearly half of all books, both print and digital, are sold by Amazon.” Mitchell does not take next step of noting that, for a
company with such significant CIA and military connections, that’s so dedicated to, and expert at, data collection and consumer profiling, the implications are enormous.
There is a lot to be thought about in this regard,
including how Amazon chose to start its business with books, drove the industry and public toward digital books, and now also has extraordinary control other content, particularly the digitally supplied video and film, that is such an important part of the overall milieu for thought and discourse.
Robotic and Remote, Amazon Is Likely Civically Unhealthy and May Quash Innovation
On Democracy now Mitchell also said
“our calculations suggest that we’re losing about two retail jobs for every one job created in an Amazon warehouse.” The hemorrhaging of these jobs may be accompanied by a quashing of future innovation throughout the United States. In her Nation article, Mitchell cites studies starting with work based on observations of paired cities by C. Wright Mills and economist Melville J. Ulmer that cities with locally owned businesses and local economic power are more
economically robust and
civically healthy, with a
greater variety of jobs and
residents more involved in community affairs, more investment in public infrastructure and better at problem solving.
But, probably more important. . . Amazon’s total control and top-down robotic streamlining of everything it does, might be thought of as benefitting the public with a cost-saving efficiency that justifies all its aggressive usurpations, but near the end of her Nation article Mitchell reminds us that history tell us that
“a surge of innovation and start-up activity” followed in the wake of the Federal antitrust actions against, AT&T, IBM, and Microsoft. That's exactly the same point that Tim Wu made exploring this subject in
“The Master Switch,” which also included his exploration of the creativity unleashed in the film industry when its vertical integration, and the related censorship affecting it, was broken up. Thereafter we saw the flourishing of
“the new Hollywood era” (late 1960s to early 1980s) with more idiosyncratic, experimental films made with greater license that were more cerebral, edgier, more defiant, moodier, and more erotically explicit.
Jane Jacobs thought along similar lines when she explored where economic vitality and innovation flows from. In her first, groundbreaking book,
“The Death and Life of Great American Cities” (1961), Jane Jacobs celebrated the dynamism, vitality and benefits of diversity in American cities. She was rejecting the cookie cutter, centrally-produced, sterile monotony, albeit efficiency, of programs like Robert Moses’ exercises in
“Urban Renewal.” Jacobs, in her later books extended these concepts exploring granular examples of what brings vitality, dynamism, innovation and sustainability to national and
city economies.
It’s too far afield to go deeply into all of Jacobs' ideas on the subject, but suffice it to say that, in Jacobs’ view, its not the efficiency of centralized planning that generates economic life and vitality; it’s quite the opposite— It’s the very messiness of a lack of centralized planning, and it’s a
diverse environment where innovations are generated bottom-up, the result of serendipitous collisions of variety. To add one more consideration: No doubt the multiplication of conscious observing human minds is certainly another essential part of the equation. . . That’s whatever stock you place in the future of A.I. ("Artificial Intelligence").
To Jacobs the economic monoculture of a car manufacturing city like Detroit, albeit however efficient as a
passing phase, was a recipe for
future economic stagnation.
The sometimes presumed efficiency of consolidation with top down and centralized control has its defenders. It was one of the rationales resorted to by the gilded age robber barons of the nineteenth century to defend their aggregating empires. Such a style of management known as
“Weber-Taylor bureaucracy” or
“Taylorism” was favored during the era of the Junker Aristocracy and in the Weimar Republic in Germany in the time that led into Hitler's era and was, as Ed D’Angelo (
writing about libraries) noted, emulated by Vladimir Lenin who imported it to the Soviet Union. It also, at that time, influenced the style of management in the United States,
“Henry Ford and John D. Rockefeller admired* the German model”
(* Some of the admiration flowed mutually:
Hitler had a life-size, full-length portrait of Henry Ford on his
office wall in Munich; the Germans awarded Ford and he accepted the
Grand Cross of the German Eagle, in 1938, that nation's highest
decoration for foreigners; and Ford subsidiaries busily manufactured
armaments that the Nazis used against the U.S., trucks and planes.)
Does, such a consolidating, concentrated top down management approach help an economy and civilization advance long term? Did it help the Soviets catch up and advance into the modern era? The Amazon created science fiction series
"The Man in the High Castle," which speculatively posits a future that never happened, envisions that if Germany had won World War II to take over much of the United States, German efficiency would have led in short order to a range of technological advances . . .Humm: Maybe-- Or is Jane Jacobs right: Does such the kind of monoculture and lack of variety such as we are getting with Amazon's relentless march of takeovers lead, in the longer term, to stagnation?
Consumerism As The Trap
Why do we let Amazon get away with such bad behavior, especially if it is, in so many ways, so bad for our economic, civic and political health? In an
eloquent sermon at the First Unitarian Universalist Congregation of Brooklyn, Reverend Ana Levy-Lyons, responding to the news of Amazon's arrival and dealing with a number of these issues, suggests that we are trapped by consumerism and the pay-off of what seem to be cheap purchases.
Reverend Levy-Lyons suggested that the way the Amazon world redefines us and appeals to us as just mere consumers
flattens our dimensionality as human beings, so that we thus lack the
“larger, fuller expressions of our selfhood,” winding up reduced to the part of us that just
“takes from the world.” Her verdict was that it results in a sort of
de-spiritualization and that, for example, as
“consumers we want to buy books and music as cheaply as possible,” but as full-fledged
“spiritual
beings having a human experience on this earth . . what we may really
want is for writers and musicians to be able to make a living.”
The way out is not simple. Economist John Maynard Keynes described a conundrum, the paradox of thrift, a sort of
"prisoner's dilemma" proposition, that if everyone responded to a slow and uncertain economy by acting in their
individual self interest to increase their rate of savings to be safe, then everybody would be hurt more as the economy was slowed down even further and made more uncertain as a result. The Keynesian solution was governmental pump-priming, a sort of resort to collective action. . .
. . . When the question is what to do about Amazon, we may not realize it, but the solution is somewhat similar. We might not quickly realize the similarity because, instead of thinking about prompting more spending overall, we are thinking about how to refrain from spending that goes to the big giant. But the answer is again to view the situation in terms of what is best for everyone collectively, and, as Reverend Levy-Lyons suggests in her sermon, to act collectively to deal with it. This may involve uniting into groups as Reverend Levy-Lyons gives the example of a collective of antiquarian book sellers that acted together in concert to
protect one of their group when Amazon was victimizing them. . .
More likely, what is going to be more effective in terms of organizing collective action is for government to do its job in confronting Amazon as the monopoly it is and reining it in, in the ways it needs to be restrained. That is why it is so unfortunate to see government instead aligning with Amazon and turning the powers of government over to Amazon.
Stalked Like Gazelles
Without collective action, separated from the rest of our herd, Amazon hunts us down like gazelles: Reverend Lev-Lyons
began her sermon with a vivid description of how Amazon making
“no effort to hide their tactics” during
`negotiations' with companies about prices would
stalk them “the way a cheetah would pursue a sickly gazelle”: In fact, she pointed out that
“the Gazelle Project” is
“what Amazon called a new initiative to work out contracts with small publishers,” and that involved simply making those companies it was
`negotiating' with disappear from its internet universe when it wanted to show them they had no negotiating power. Disappearing from that universe now means companies can't survive.
It may be testament to Amazon’s ubiquity that there is more than one
“gazelle” story to tell about Amazon. In her cover story for The Nation, Stacy Mitchell
told a story about the trauma that a sporting goods company, coincidentally (?) named Gazelle Sports, making running shoes, had in dealing with Amazon. Once popular and highly rated, the company suffered a downturn as more of its shoppers ever more reflexively did more and more of their overall shopping at Amazon. Ultimately:
Gazelle Sports would join Amazon Marketplace, becoming a third-party seller on the digital giant’s platform. “If the customer is on Amazon, as a small business you have to say, ‘That is where I have to go,’” [The founder of the company] explains. “Otherwise, we are going to close our doors.”
Amazon Prime - Amazon Videos
We previously mentioned in passing,
"The Man in the High Castle." That's just one example of a made for internet streaming that is available to be watched free by Amazon Prime members. Another that you'll hear a lot about is
"The Marvelous Mrs. Maisel," that
swept up a lot of Emmy Awards while also getting a
couple of Golden Globes awards. You can watch these series for free if you are an Amazon Prime member, which means that you have already pre-paid for Amazon accelerated shipping as an inducement to do all your shopping there.
One thing that has so far gone unmentioned is that the Amazon Long Island City waterfront site would be just blocks, only a few minutes away, from Silvercup Studios, that's one of the city's very important film studios where, for example, HBO once filmed
"The Sopranos." Specifically, Amazon's offices would be just a fifteen minute walk to the existing studio facilities and perhaps just half that to the
planned Silvercup Studios West expansion planned for the waterfront just below the 59th Street Queensborough Bridge. With Amazon almost singlehandedly
replacing all the video stores of the days of yore, being the only source for many films once obtainable there, and now expensively investing in its own video shows, films and content, this should not go unnoticed.
Amazon will have a headquarters in the political capital of the United States and here in the financial capital as well: Maybe Amazon will never need to open another headquarters (HQ4?) in Hollywood, as the entertainment capital of the country.
We Don't Really Know What's Coming
Norman Order, the city’s foremost expert on the Atlantic Yard mega-project and its dealings with ESDC and local elected officials, wrote an analysis based on that history cautioning how little we can be sure of what to expect based on what we know or is promised now:
“Atlantic Yards within a few years changed significantly.” See:
For Amazon HQ2 deal, Atlantic Yards serves as a warning, November 15, 2018 By Norman Oder.
Oder stresses the vagueness of the elusive subsidy calculations and the supposed benefit they generate, plus the lack of transparency that can be expected going forward, the probable lack of enforceablity along with a disinclination to enforce agreements:
“If Atlantic Yards is a guide, ESD will be quite accommodating to Amazon, willing to revise agreements and evade transparency.”
What might be coming? Be open to thinking big-- Previous to the announcement of Amazon’s interest, what is slated to become the Amazon site, land along the 1000 foot long artificially created shoreline inlet known as Anabel basin, was being covered more innocuously as another planned rezoning and real estate development. . That might involve the tallest building outside of Manhattan, a
700 foot tower.
Calculations of How Hugh The Subsidies?: An Afterthought
Given all of the above, the question of Amazon huge subsidies and just how much they are should be an absurd afterthought. The New York Times editorialized that Amazon shouldn’t be getting the subsidies calculating those subsidies at
$1.5 billion. See: Opinion-
New York’s Amazon Deal Is a Bad Bargain- The city has what the company wants, talent. Why pay them $1.5 billion to come? By The Editorial Board, November 14, 2018. Another Times article says
$1.7 billion.
Good Jobs First, the watchdog group on economic development incentives,
calculates:
The taxpayer costs of these two deals is high, both in absolute terms and on a per-job basis, contrary to Amazon’s artful spin. Together, we believe they exceed $4.6 billion and the cost per job in New York is at least $112,000, not the $48,000 the company used in a selective and incomplete press release calculation. (11/14/18)
Good Jobs First
calculates the subsidies of both the New York and Virginia deals as exceeding
$4.6 billion and says that separately, just New York State’s award under the Excelsior program is projected at
$1.525 to $1.7 billion. Greg Leroy executive director of Good Jobs First discussed the subsidies along with others on Democracy Now on
November 14. 2018 and at
7:30 AM was also on the air on WBAI’s Morning Show that same morning.
Peter Rugh
writing in the Indypenent, like many others puts the total subsidies in the
$3 billion range,
$1.7 billion in subsidies from the state and another
$1.3 billion from the city. He observes that the
“state legislature could put a cap on the governor’s Excelsior tax credit program but many in Albany are ready to roll out the Amazon welcome mat.”
On top of this there will probably be other subsidies piled, like perhaps Federal EB 5 program for financing. One day perhaps we'll see.
Mr. Oder notes at the end of his article, that when Governor Andrew Cuomo was asked;
why the New York incentive package was worth twice as much per employee compared with the one in Virginia, where taxes are lower, Cuomo said he didn’t know how it was calculated. “There’s all sorts of ways to work these numbers,” he said.
That’s for sure. Ultimately, neither he nor de Blasio will be around to do that math, while future governors will have ESD at his or her disposal.
* * *
When, in my tender youth, I heard about the horrors of the trap of
"the company store," its seemed almost like an impossible fiction from the past. Now-a-days, it is remarkable what we seem to take pretty much in stride coming from Amazon . . . even as, like things once were in those days or yore, Amazon is so all enveloping that it is
everything. Like in those days, it even seems to have become the government. Meanwhile, "
The Company Store"? We seem to know that now as a clever marketing name that was adopted for a retail outlet . . . .
. . . Not surprisingly, they too
sell through Amazon.
