In Mel Brook’s 1976 film Silent Movie, the villain is a corporation, “Engulf and Devour,” that is seeking to affect a hostile takeover of the independent studio Brook’s character, Mel Funn, is trying to convince to produce the first silent movie since the 1920s. When I first learned that Amazon had concluded a deal to locate part of its so-called HQ 2 in Long Island City, where I’ve lived for four years, I was inclined to oppose it. Like a lot of my fellow LICers, I feared Amazon’s presence would accelerate the already fast pace of gentrification, increase the area’s already sky-high rents and create more crowding on our already overcrowded subways. I also didn’t like what I was reading about how Amazon treats its employees, overworking them, encouraging cut throat competition between them, refusing bathroom breaks and indoctrinating them as if the company was some kind of cult. As I began to research more about Amazon and the deal, I found that both are worse than I could have ever imagined. Amazon is Engulf and Devour for real.
Before I go further, I need to confess that as a confirmed compulsive reader, I’ve done a fair amount of business with Amazon in the past. Its website is one of several browser tabs (including CounterPunch) I open daily. Though I’m usually just looking at books referenced in articles, which I can almost always find and reserve through the magnificent Queens and New York Public Library systems, I have also bought a few books the libraries don’t have, as well as some clothing and ink cartridges for my printer. I never gave a second thought to what I was doing until now.
When the Amazon deal was announced, my Facebook (another topic that needs more discussion perhaps at another time) feed exploded with articles, opinions and arguments about whether it was good for Long Island City or not. One of the first pieces that grabbed my eye was Stacy Mitchell’s February 2018 article for The Nation entitled, Amazon Doesn’t Just Want to Dominate the Market – It Wants to Become the Market. Ms. Mitchell is co-director of the Institute for Local Self-Reliance, where her research focuses on economic concentration and the health of local economies.
[Jeff] Bezos has designed his company for a far more radical goal than simply dominating markets; he’s built Amazon to replace them. His vision is for Amazon to become the underlying infrastructure that [all] commerce runs on.” Already Amazon’s website is the dominant platform for retail sales. Its Amazon Web Services Division provides 34 percent of the world’s cloud computing capacity, handling the data of a long list of entities from Netflix to Nordstrom, Comcast to Condee Nast to the CIA. Now in a challenge to UPS and FedEx, Amazon is building out a vast shipping and delivery operation with the aim of handling both its own packages and those of other companies.
Mitchell goes on to note:
By controlling these essential pieces of infrastructure, Amazon can privilege its own products and services as they move through these pipelines, siphoning off the most lucrative currents of consumer demand for itself. And it can set the terms by which other companies have access to these pipelines, while also levying, through the fees it charges, a tax on their trade. In other words, it’s moving us away from a democratic political economy, in which commerce takes place in open markets governed by public rules and toward a future in which the exchange of goods occurs in a private arena governed by Amazon. (italics are mine)
From my perspective, it’s debatable whether the U.S. has ever had a fully democratic political economy and it was certainly moving towards even less democracy well before Amazon came along. But Mitchell’s still has a valid point that things could get so much worse if Amazon is allowed to proceed unchecked.
But who’s going to reign in Amazon? Mitchell reminds us that in the 19thcentury, men like Cornelius Vanderbilt and John D Rockefeller also harnessed new disruptive technologies, like the railroads, and used them to control market access, weaken competitors and extort money from farmers and small businesses. Back then the response was a broad movement against monopolies, which led over time to the passage of robust anti-trust laws. Mitchell notes that the “central purpose of these laws was to protect liberty and democracy from concentrated economic power or what Franklin Roosevelt called ‘industrial dictatorship.” Again, the case may be overstated a bit rhetorically but the danger was and is real.
In the 1970s, an ideological revolution swept through the fields of law and economics. Led by conservative legal scholar and former Nixon solicitor general, Robert Bork, among others, this new school of thought dismissed concerns about the impact of monopolies on the rights of citizens and even on competition. Its proponents argued that anti-trust law be reduced to a single, narrow goal: maximize efficiency. And efficiency, they insisted, was something that big, consolidated corporations could deliver better.” These ideas were codified under Ronald Reagan, whose administration left the anti-trust laws intact but altered the way regulators interpreted and enforced them. These changes won support from an ascendant faction of liberals, who made efficiency more appealing by recasting it as a source of lower prices for consumers.
As a consequence, Amazon has been allowed to grow using tactics that once would have drawn anti-trust scrutiny. Amazon, for example, has an extensive history of selling goods at a loss in order to wrest market share from competitors. Amazon has also used below-cost selling to crush and absorb upstart competitors like the shoe retailer Zappos. As Mitchell points out, over time this behavior has had a restraining effect: start-ups intent on challenging Amazon are unlikely to find investors and so never get off the ground.
Mitchell also notes that, “Economists have recently begun to document a link between corporate concentration and rising inequality.” In fact, they are really just circling back to what people like progressive leader (and later Supreme Court Justice) Louis Brandeis knew over a hundred years ago, encapsulated in his famous statement: “We can have democracy in this country or we can have concentrated wealth in the hands of a few but we can’t have both.”
As Michell shows, there are some glimmers of hope on the horizon. In June 2016, Senator Elizabeth Warren made a speech calling for action to check monopoly power, singling out several dominant companies, including Amazon. The U.S. House of Representatives now has an Antitrust Caucus. Its founders include Reps. Rho Khanna (D-CA) and David Cicilline (D-RI), who’s been outspoken about the power of dominant tech firms to manipulate consumers and impede start-ups. Even some Republicans are getting into the act. Missouri Attorney General (now Senator-elect), Josh Hawley launched an anti-trust investigation of Google in November 2017.
But most elected officials are still enthralled by the likes of Jeff Bezos. As a New York State and City resident, I felt embarrassed when Governor Andrew Cuomo said he would rename himself “Amazon Cuomo” if that’s what it would take to seal the deal, even if it was just a “joke.” Mayor Bill de Blasio, if a little more self-restrained, is every bit as supportive of the deal. Between the two of these men, normally barely on speaking terms, Amazon is being offered some $3 billion in state and city incentives – at a time when New York City’s subway system is suffering from years of neglect and New York City Housing Authority (NYCHA) tenants routinely go without heat in the winter and have been without stove gas since last August.
Though the deal was structured to by-pass review by the New York City Council, the State Legislature may be able to stop it. It will require approval of an obscure entity called the Public Authorities Board. The State Senate and Assembly, both now under control of the Democrats, each have a vote on the board, as well as the governor. Unanimity is required. Both my state senator, Mike Gianaris and city councilmember, Jimmy Van Bramer, are now publicly opposing the deal, although both signed a letter to Jeff Bezos in 2017 as part of a “united body of elected officials,” urging “Amazon to make New York City the home of its second headquarters.” The letter was also signed by an additional 75 members of congress, the state assembly, senate, city council, all five borough presidents and public advocate (now incoming attorney general), Letitia James. A virtual “Who’s Who” of the political class in the New York City area.
I understand if some of these elected officials have changed their minds. We all have so much competing for our attention these days. Maybe the Amazon deal sounded good to some of them on the surface and they didn’t really give the company and how it operated much thought, just like I hadn’t until recently. If they now want to join the fight to stop the deal more power to them. But we have to be wary they are not just grandstanding because of what might be unexpected public opposition. We have to be careful they don’t settle for some token concessions and call it a “victory.”
It may be considered by some to be a hard line but I believe Amazon should be kept out of Long Island City entirely. I’m with those who would rather see more diverse development here, more small businesses, mixed housing, more schools, parks and green space. Development, almost exclusively luxury apartments for the very rich, has gotten way ahead of community infrastructure, environmental considerations or even the idea of building community itself. Plans are in the works to deck over the nearby Sunnyside Railyards to build perhaps even more massive towers with so many amenities that people never even have to leave the building. Is this really what we want?
I appeal to those of you who agree that Amazon should be kept out of Long Island City to join our fight in any way you can. Reach out to No To Amazon in NYC and the Queens Anti-Gentrification Project on Facebook to find out what’s going on, spread the word, get connected, share ideas and information and contribute your talents. Average citizens and activists fought similar plans for a Google expansion in Berlin and won. Maybe we can do the same here!