Unfair Advantage: In The Sun, Stacy Mitchell Discusses Amazon and the Future of Local Economies

Unfair Advantage: In The Sun, Stacy Mitchell Discusses Amazon and the Future of Local Economies

Date: 25 Oct 2018 | posted in: Retail | 0 Facebooktwitterredditmail

ILSR Co-Director Stacy Mitchell is the subject of The Sun magazine’s featured interview this month. Stacy sat down with writer Tracy Frisch for an extended Q&A. They discuss Amazon’s growing monopoly position, its effect on the labor market and retail sector, and how the company plays the long game to bleed competitors dry. The conversation then turns to broader questions about the importance of locally owned businesses, what’s gone wrong with economic policy, and how we can revive America’s many left-behind communities.

Below are a few excerpts from the interview. You can read the full exchange here.

Stacy first outlines how Amazon’s seemingly modest start as an online bookstore in fact had the early makings of a monopoly:

“Bezos had this very prescient vision of how the Web, which seems like a wide-open place where any entrepreneur can reach buyers, could in fact become a winner-take-all environment.”

She touches on Amazon’s search for its second headquarters’ location, which has set off a bidding war and race to the bottom among cities and states offering incentive packages:

“These packages generally include handouts of various kinds, such as free land that the city owns. Some of the tax breaks are quite striking. A few places have offered to give all state and local income taxes paid by Amazon employees back to Amazon.”

And the conversation covers Amazon’s original market, books:

“Amazon’s dominance has meant that fewer books find an audience. Amazon is good if you know what you want, but it’s terrible for discovering new authors. If you’re shopping in an independent bookstore, studies show, you’re about three times more likely to discover a new book or author than if you’re shopping on Amazon. A consequence of this is that we’re reading more best sellers and well-known authors, while new authors and niche books increasingly get sidelined.”

Amazon is part of a broader trend toward economic consolidation, which has far-ranging implications:

“It’s troubling how many places in this country have been left behind…Corporate mergers have shuttered local plants. Small businesses have disappeared. Farmers are giving up and retiring because they can’t make money in a system controlled by big agribusiness. Banking is no longer local but is consolidated on Wall Street.”

Stacy also discusses emerging solutions, from antitrust action to local strategies  that can curb corporate power and revive America’s towns and cities:

“Consolidation has crippled the economic base of many regions and concentrated job growth and opportunity in just a few places. By breaking up these monopolies and spurring new businesses, we could trigger real investment in those neglected communities.”

In the end, the impact of a more democratic, community-scaled economy goes far beyond dollars, Stacy concludes:

“The true value of having a vibrant local economy isn’t just in the bottom line of small businesses and the specific jobs they create. It’s also the notion that place matters. A community can nurture active citizens and help people realize their dreams and potential. For a long time we have tended to ignore this. Amazon is a good example of the loss of place. Amazon is not here in Portland physically, but it’s sucking money out of this local economy just as it is everywhere else — invisibly, without enough public discussion about the consequences.

The Sun is an independent monthly magazine of politics and the arts with a circulation of about 70,000. Read more of Stacy’s interview here.


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Charlie Thaxton
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Charlie Thaxton

Charlie Thaxton is a researcher with the Institute for Local Self-Reliance’s Community-Scaled Economy Initiative. He studies local economies, small businesses, civics, and their connection to social capital and wellness.