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Inside Amazon

Amazon’s Dickensian working conditions, carry out Bezos’ very own version of Blake’s Satanic Mills. The horrifying working conditions at Amazon have been widely discussed. Even today, working in one of Amazon’s warehouses reminds one of Friedrich Engel’s seminal study on the Condition of the Working Class in England (1845), Beyond that, they are also a reminder of George Orwell’s Nineteen-Eighty-Four. Jeff Bezos calls his warehouses “fulfilment centres” however working in those storerooms is the opposite of fulfilment.

One of Bezos’ key ideologies made to work at Amazon is what he calls “Day 1”. By this, he means every day is day one – always act like a start-up company – don’t rest on what you achieved yesterday. Today is a new day. In fact, every day is a new day. Amazon is a company where intensity and a harsh drive to efficiency remain Bezos’ all guiding leitmotifs. Complacency is strictly forbidden. The second core of Bezos’ empire is his fear that Amazon will succumb to something like a big company disease. It occurs when managers focus on each other instead of the company. Navigating the corporate bureaucracy, internal nepotism, favouritism, and office politics become more important than the corporation.

To reduce this, Bezos focuses on what is known as “the customer is king” motto placing high emphasis on external factors while, simultaneously, de-emphasising the purpose of his enterprise: profit-making. In the case of the service company Amazon, the managerial ideology of making everything cheaper, faster, and customer friendlier helps Bezos tremendously in forcing everyone into his corporate line – a kind of managerialist Gleichschaltung in which everyone inside Amazon walks in an ideological goose step.

This ideology is powerfully supported by what Cathy O’Neil calls “Weapon of Math Destruction“. At Amazon, this means an increasing reliance on mathematical algorithms. Evermore, these are running the company almost like a mindless automaton. Amazon collects a massive amount of data – called Big Data – from its customers and uses algorithms to feed its algorithmic monster. In Amazon’s warehouses, workers are all but a tiny cog in the wheel that Bezos and his corporate apparatchiks push relentlessly. On the back of these warehouse workers, success came quickly. By 2019, the corporation controlled 40% of all online sales in the USA.

But Amazon is not alone. Walmart is by far the largest company in the world by revenue, and it too is working towards joining the algorithm club by investing heavily in artificial intelligence or AI linking business to big data. This is the future of online retail if not retail as such. The old dream of Frederic Taylor to turn a human being into an appendage of a machine and Ford’s dream to force this appendage along an assembly is turbo-charged by a system run by mathematical formulas, algorithms, big data, and artificial intelligence.

Worse. Amazon’s warehouse workers are persistently exposed to a never-ending push for hyper-efficiency based purely on numbers. Amazon employs hundreds of thousands of workers in its vast global warehouse network. Their jobs are demading, demeaning, and non-union. Amazon’s corporate “culture” – these are uncultured places – is fast-paced, extremely aggressive, and very unforgiving for workers and middle-managers alike. Beyond that, Amazon’s cardboard box shovelling is highly damaging to the environment. Amazon runs billions of deliveries. It also runs energy-sucking server farms supporting Amazon’ cloud service called Amazon Web Service (AWS). All of this is pushing up the world’s greenhouse gas emissions. Amazon’s carbon footprint must be mind-numbing.

On top of all that, in 2017 and 2018, Amazon legally paid little or no U.S. federal income taxes. This is hard to take given that Amazon posted a $10 billion profit in 2018 alone. You can get rich by exploiting workers and by paying no taxes. Jeff Bezos’ net worth was $196 billion (Monday, 24 August 2020, 6 pm Sydney time).

To smokescreen all this, Amazon’s corporate PR pays off handsomely. In 2018, Americans were asked which institutions they believed in the most. Democrats picked Amazon. Republicans picked Amazon third after the military and the police. Those surveyed respected Amazon more than the FBI, universities, Congress, the press, the courts, and religion. 51% of American households attend church, but 52% have an Amazon Prime account. Once again, consumerism beats religion – not that both are contradictions. Of course, it can always get worse, and it does. An astounding 44% said they would rather give up sex than quit Amazon for a year – so much to the quality of sex in the USA. 77% would choose Amazon over alcohol for a year. It was also found that:

+ 47% have shopped online while using the bathroom,

+ 57% while working,

+ 23% while sitting in traffic, and

+ 19% while drunk

The main reason consumers prefer Amazon – especially during a health crisis like the Coronavirus pandemic – is that online shopping saves shoppers time, hassle, and the expense of driving or taking public transport to a store to purchase mundane items such as socks or batteries. Even before, the Corona pandemic, this has already led to social isolation. While pretending to just supply a service to customers, Amazon systematically exploits the vulnerability in human psychology when jumping online. This exploitation is done through what the industry calls “persuasive technology“.

Amazon offers a staggering 600 million items. Among that was a pillowcase imprinted with a photo of a bare-chested Nicolas Cage at $5.89. As one happy customer called Kara said, “I feel so protected knowing that Nicolas is in bed with me” – no wonder sex is in decline. It may sound funny or sad, but corporate capitalism wins again.

The pillowcase came out of one of Amazon’s 175 warehouses. From Amazon’s empire of warehouses, it shipped an estimated 3.3 billion packages in 2017 – the equivalent of nearly half the world’s population. In 2018, that number rose to 4.4 billion packages, which adds up to 12 million packages a day.

The Nicolas Cage case came from a crammed warehouse. Meanwhile, Bezos’ Manhattan apartments run at 17,300 square feet of living space with twelve bedrooms, sixteen bathrooms, a ballroom, library, private elevator, and 5,730 square feet of terraces with park and city views. The price tag: $80 million. New York’s minimum wage was $12.50 per hour in 2020. In other words, an Amazon warehouse worker on minimum wage needs just 6,400,000 hours to pay for such an apartment. If such a worker toils 24/7 with no sleep, no food, and no home, he would need just 730.1 years to pay for the place.

There are massive numbers of workers that make Amazon – Bezos’ wealth – possible. Then their middle- or upper managers and finally Bezos’ “top lieutenants”. These corporate apparatchiks push a corporate culture deliberately designed to follow Social-Darwinism. Even in the employment contract, it says that working at the company may involve a high degree of job-related stress – read: work is very stressful. It also says that the employee wouldn’t bring any action against the company arising from that stress.

Like many single-minded corporate CEOs and non-democratic leaders in the corporate and political world who hold semi-dictatorial or full dictatorial positions, Bezos thinks of himself as being a good guy – mostly for having created plenty of slave-labour-like jobs and given to charity. Apart from that, he follows a classical element of Managerialism. Like most corporate apparatchiks and CEOs, Bezos prefers to deal with numerical things. Things management can quantify rather than things they can’t, such as human emotions.

As a cover-up for all this and to put Amazon in a good light, the corporation relies on a corporate spin. Like Rockefeller was put in a good light after the Ludlow massacre with the assistance of Poison Ivy. A man who helped Germany’s Nazis. Like them and almost any other corporation from Union Carbide (Bhopal), to Exxon (Valdez), to Enron, to BP (Gulf of Mexico), Volkswagen (emissions) and many in-between and soon, even more, to come, Amazon too runs a sophisticated PR – public relations – department to camouflage its very own corporate pathologies. PR used to be called propaganda, but public relations sounds so much better. Just has the godfather of public relations – Edward Bernays – said, “propaganda became a bad word, so I invented public relations”. To camouflages its corporate pathologies, Amazon runs a public relations team that has grown from a handful of spin doctors to a propaganda army of 250 people.

When Bezos bought the struggling Washington Post in 2013 for $250 million, he might have done it because the Post is a pillar of democracy and worth saving. This kind of thinking gives Bezos a good name. But that does not translate into the inside of Amazon. Amazon is run as a staunchly non-democratic and stalwartly anti-union affair. On the upside and unlike super-propagandist Rupert Murdoch, Bezos refrains from interfering into the Post’s day-to-day editorial decision-making. Bezos might be a ruthless businessman, but he is not a journalist. He is smart enough to know that, and to do what he does best: run Amazon and posted like a third-class car dealer from Mendota, California.

One of the strengths of Amazon is its semi-federal business structure giving some level of crypto-independence to Amazon’s business units. Amazon runs a weak corporate centre with almost no HQ largely because Bezos believes it would create too much unnecessary communication and waste. Instead, Amazon functions as a classical corporation of economics 101: “supply and demand”. Amazon relentlessly pushes towards lower costs for its shoppers, and by lowering costs, Amazon increases the number of customers. In turn, this attracts more independent sellers who want to reach the growing online traffic on Amazon’s platform. In a second turn, this leads to more revenue for Amazon. Eventually, all this allows economy of scale, which helps further lowering Amazon’s prices. The lower price pulls in more customers, who attract more sellers, and the cycle goes on. It is capitalism’s dream of eternal growth.

To engineer and to perfect Amazon economy of scale machine, the corporation is spending about $30bn a year on research and development (R&D) – more than any other company in the world. But Amazon does not even think of it as R&D. At Amazon, R&D is not separated from the rest of the corporation. Still, large chunks of the $30bn are spent on IT or better AI (artificial intelligence) and big data. AI is heavily used to analyse Amazon’s 300+ million customers in ever more minute and sophisticated detail. Amazon’s relentless IT-machine makes decisions on purchasing, pricing and where to stock goods. Constantly perfected and continuously fed with new data from customers, Amazon’s AI software analyse mountains of data and makes them ready to be used by Amazon for the sole benefit of Amazon, i.e. profit-maximisation.

What benefits Amazon is an ever-increasing sophistication of AI. So that its algorithms can measure how, for example, a new burgundy jumper sold compared to the older one and uses that difference in sales to train its AI models to order more effectively in the future. At Amazon, this system runs on steroids. Every time an Amazon customer buys or even just looks for a product online, orders a movie, listens to a song, or reads a book, this is noted. And Amazon does this better than any secret service could have ever done. Consistently, Amazon’s algorithm learns to be smarter the next time around. It offers customers more accurate products and makes more money for Amazon. At one point, Amazon will know what you are looking for before you do!

In this, Amazon’s AI remains its preferred tool. Step by step, AI infiltrates not only Amazon’s corporate decision-making, but it also penetrates more of society’s crucial decisions, such as diagnosing a patient, granting a mortgage, or deciding who gets a job or into college. It may well be that one day the world might very well end up with a handful of global AI oligopolies controlling our purchases, our entertainment, our health, our finances, and our destiny.

This may well be a world divided into what Amazon calls “prime” and the rest. Amazon Prime is important for Amazon for two reasons: firstly, it gives consumers the illusion of being a mini-elite that costs $59 annual or $6.99 monthly. Crucially, Prime customers spend $1,300 per year compared to $700 for the rest. Secondly, Prime gets you not just hooked on buying things but more importantly, it draws you into the Amazon orbit like being sucked into a Death Star.

But wait there is more! Amazon also offers Alexa. Alexa became ever more possible as AI for voice recognition improved during the last decade. Alexa is based on a machine learning model that trains itself by listening to what millions of humans have already said and to make highly accurate guesses as to what was said and what will be said. Amazon has about five million words in its English vocabulary database. To recognize a specific word among five million words without context is a super hard problem. Amazon has mastered this. To some, this is just a voice-powered home accessory. To Amazon, it is a machine that records endless facts about a user’s daily life. This produces even more data Amazon to be used for making Amazon bigger and more profitable.

In the meantime, we are moving toward a world of short answers with a flea sized attention span. This might well be a world in which we have lost track of the written word. Much of this comes at a high cost as the digital gap is widening into those with an Amazon Prime account and those who don’t. Amazon cuts out the middleman, real shops are closing, and shopping moves online. The Coronavirus pandemic of 2020 has turbo-charge this process and Amazon’s profits. Meanwhile, hundreds of thousands of workers will lose their jobs in those industries infiltrated by Amazon. McKinsey even estimates that by 2030, 800 million people globally or 30% of the entire global workforce will have to change.

This process is not only pushed by online shopping and AI but also by robots. Amazon is working hard to replace its 125,000 full-time and 100,000 part-time workers in its warehouses with robots. Until this dream has come true, Amazon’s warehouses remain horrific places. Scrolling through Indeed.com, one reads about working for Amazon: feelings of isolation; poor management; hard to do picking and use the scans; never work for Amazon; and, highly stressful workplace…prepare to have no life outside of work.

As a consequence, many workers in Amazon’s warehouse do not last long because of stress, workload, the fact that management is constantly on their backs, the evaluation process is horrid, they are written up or fired, jobs are physically abusive, etc. Others say, ‘having a bad day there will cost you your job. I can’t think of any time I joyfully came to work. It busts your spirit and wrecks your body. Another worker said, decency, respect and dignity were absent. Another worker, working as a picker, said, he came across a Coca-Cola bottle of urine on a shelf, purportedly put there by a worker too scared to take a bathroom break. Amazon, not surprisingly, strongly disagrees.

Dumaine’s Bezonomics: How Amazon is Changing Our Lives  is published by Simon & Schuster.

 

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