“Amazon Is Hurting America”: NY Times Columnist On Why the Hachette Conflict Goes Way Beyond Books

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“Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America.” Thus begins Monday’s ominously blunt column by New York Times regular and Nobel-prize winner Paul Krugman. Krugman, who covers the economy from a progressive perspective, does not approach the controversial question of Amazon: good or bad? as a an author with a recent book out, nor as a rabid culture consumer (although I did see him at a St. Vincent concert in Brooklyn once; shoutout to Paul Krugman’s music taste!) Instead, he’s writing as a politically-savvy economist who sees a company beginning to get out of control. And Krugman has some important thoughts about what Amazon has become so dangerous — not a monopoly, per se, but rather a monopsony.

In economics jargon, Amazon is not, at least so far, acting like a monopolist, a dominant seller with the power to raise prices. Instead, it is acting as a monopsonist, a dominant buyer with the power to push prices down.

Krugman goes so far as to compare the company repeatedly to the “robber barons” of the Gilded Age, who eventually had to be trust-busted by Teddy Roosevelt and his ilk: “Does Amazon really have robber-baron-type market power? When it comes to books, definitely.” Okay, but what’s so scary about this growing power on Amazon’s part? Amazon still has technology useful both to indie writers and consumers and content creators of all kinds, right?

Yet what Krugman is saying is that Amazon’s monopsonist (try saying the word twice) potential goes far beyond books, and that its latest controversies are showing the first signs of that whole thing about absolute power corrupting absolutely.

Because Amazon’s sway isn’t just over our individual screens and purchases. No, as a mega-corporation known for dodging taxes and busting unions much like that other mega-corporation, Wal-Mart, has done, Amazon has real skin in the political game. In fact, it has a slew of lobbyists advocating for various positions in DC (some decent, some far less so).

As many critics have noted, Amazon’s expansion into almost every other market beyond books means it is looking gain similar sway over these industries. It’s quite possible that then, unlike it has done with books, the company could quietly raise prices on consumers in those arenas, more as a classic monopoly might.

But whether or not this is the company’s end game, Krugman’s point is that by playing dirty with Hachette — delaying, refusing to discount and even erasing its titles — Amazon has revealed itself to be untrustworthy and downright manipulative, and because of its heft, extremely dangerous. It has in this case abandoned its consumer first motto, punishing book readers and buyers in addition to writers and publishers.

Krugman emphasizes the fact that Amazon has made the book market, and thus the ideas market, un-free. Amazon’s now-notorious delaying tactics have not been applied to powerful people like Congressman (and former VP candidate) Paul Ryan, who complained on TV about shipping times for his memoir and suddenly received better treatment. Yet those nasty tactics have stuck on to many other writers in many other genres. Clearly, while the company has no wish to alienate the politically connected, it has no qualms with alienating the merely artistic or journalistically-inclined.

That’s why the independent and self-published authors who enjoy Amazon’s model should nonetheless be wary. If the company feels entitled to pick and choose among Hachette’s titles based, evidently, on its own political self-interest, who’s to say self-published titles will always remain property of the “free market” on Amazon, and won’t be subject to manipulation down the road? And who’s to say Amazon’s brass won’t start favoring individual companies over others in its sales of other types of items, crushing smaller businesses?

This is why the Amazon-Hachette conflict is about so much more than book industry intra-fighting. Just like in the political realm, we have to be cautious about the accumulation of power even if we initially like what the power accomplishes. For instance, if a government agency had a database of all our ATM PIN numbers to direct deposit us a birthday present, we’d be psyched at first. Everyone loves presents! But do we really want the government to have that access and power, now that we’ve blown that money on, erm, online shopping?

What Krugman is asking is this: do we really want a tax-dodging, worker-abusing corporation to be able to dictate the literary and economic conversation in one industry while it racks up monopolies in other industries? “Don’t tell me that Amazon is giving consumers what they want, or that it has earned its position,” he writes. “What matters is whether it has too much power, and is abusing that power. Well, it does, and it is.”