Monopoly, Abundance and Fulfillment for Jeff Bezos and Amazon with Help from DOJ

The US Department of Justice has announced that it will block a huge proposed merger deal between American Airlines and US Airways that would have given them almost a monopoly in the country, free to do what they want with prices and services. In this case, there’s no doubt that Attorney General Eric Holden is acting to protect the consumer. 

But it’s not always so simple. A month ago the Department of Justice took on and won against Apple and five of the largest publishers for colluding to keep book prices higher. In this case, publishers, including giant Barnes and Noble, weren’t colluding to screw the consumer, they were desperately trying to stay alive. It’s no news to anybody that publishers are struggling to compete against the ebook industry, and in particular against Amazon. Barnes and Noble recently lost its CEO who it isn’t going to replace. Pretty soon it will probably break up. 

There’s only one winner and that’s Amazon. Anybody who reads loves Amazon. It’s fabulous that they drive prices down so you can have a whole library and pay very little for it. What people who read but don’t write don’t know about Amazon is that as a writer you get your biggest royalty – 70% - if you keep your price below $9.99. Anything above that and you only get 35%.

Everybody knows about books like Shades of WTF as a friend of mine called it. The author could have sold them for a few bucks apiece and still made a fortune, and that’s Amazon’s argument for keeping prices low. You sell more and there are no big megalomaniac control freak publishers telling you your book isn’t good enough. It costs you nothing to format it and load it onto Amazon. Anything you sell is money for jam. 

But here’s the real catch; Amazon doesn’t market your books. They leave that to the authors. Who, because they make so little per book, are desperate to make something. And bingo, Amazon has free marketing. No wonder Jeff Bezos has such a huge fortune.

Most writers who start out think that marketing on the internet will be a breeze but it isn’t, because there’s no barrier to entry and you’re literally competing against millions trying to sell something. Most people who have succeeded with selling ebooks advise writers to give their first one away for free. So what, you say? It didn’t cost you anything. Apart from the time that it took you to write. Very few non-writers who love to read take that into account. That writers often have to work for nothing so that readers can read.

So from the writer’s side of the fence, for once the big giants colluding was a good thing. It helped to stabilise prices for writers and keep some reality alive. Ebooks are always cheaper than paper books, but at least there’s something to correlate prices against. If paper books disappear Amazon will have total control over the whole book industry. World-wide. Scary thought.

Harder for writers? Definitely. Pretty good for people who know how to manipulate the internet marketing-wise, regardless of the quality of what they’ve written – which actually is nothing new, so it’s barely worth mentioning. Great for readers? Maybe. For now. Until Jeff Bezos’ lust for power consumes him. Who knows what he’ll do with prices then. Wonderful for Amazon shareholders? Oh yes. For now. Until the book industry or Amazon implodes. So the Justice Department’s decision in this case actually worked to enable a monopoly that will become a stranglehold in the book industry.

Consumer protection is supposed to protect the consumer in the short and the long term. But if it leaves the manufacturer so exposed that manufacturing either stops or produces worse and worse quality, then nobody is protected. Writers need to live, a fact that anybody who doesn’t write but loves to read happily ignores. The harder it gets for writers to earn, the more they’re forced to write highly marketable but utterly unoriginal crap.  And that's good for readers how?

Amazon’s global monopoly doesn’t bode well in the long term for readers, and for writers it spells slave labor on a global scale.Thanks a lot, Jeff. BTW, have fun with the Washington Post.

Positive Think Your Way to Abundance

Abundance. It's a nice word, isn’t it? It's a great concept, the idea that abundance of everything is there for everybody, it doesn’t matter who you are. And if you haven’t got enough of it apparently you can just think your way into it. Or you can be lucky and win the lottery. Just kidding.

Abundance of money, abundance of opportunities, abundance of dreams, abundance of dreams fulfilled, abundance of self-esteem, abundance of love and respect. We all want that. Especially love. Everybody wants a happy relationship, where they’re treated with respect and there’s real connection.

All of it always seems so miraculously possible, so utterly achievable - and real – when you’ve just read the latest motivational book, or seen the latest “spiritual” film. The big Aha moment. They make it so clear, don't they? Your thinking brain comes alive with all the possibilities it didn't see before. Often they tell you that just seeing those possibilities is all it takes. Just getting your head around the bigger idea. Manipulate your brain. Just think! And now that you see and think, you know. And because you know, you can act differently. So your life will be different from this point on. Better. Fulfilled. Successful. Filled with abundance. To know is to change, isn’t it? 

It's a fabulous idea. How hard can it be – you watch a film, read a book, intellectually embrace an idea, and miraculously your life turns around. All the things that don’t work in your life just melt away. The men who haven’t treated you well? They’re gone, and they’re somehow magically replaced by different men, who treat you with incredible respect, make you feel deserving and loved and important. And all you had to do was think differently. Be positive.

Sounds logical, right? Actually it’s bollocks. 

Raise that Minimum Wage Says Barack Obama

New York Times Op-ed columnist Paul Krugman wrote about the necessity – and the viability – of Barack Obama’s proposal in his State of the Union address that the minimum wage in the US be raised from $7.25 to $9. Krugman, who says that in real terms the current US minimum wage is lower than it was in the 1960’s, believes it can work and must happen, and won’t affect employment figures. Gerhard Bosch, Professor of employment and economic sociology at Duisberg-Essen University, has said the same thing. I think Obama's idea is a grand one.

Businesses, of course, always say that hiking wages will lead to unemployment because they won’t be able to afford to employ as many. People like to point to Germany as a prime example of how letting the market regulate wages is good for the economy. But since the mid 1990’s things have been getting worse for some in Germany. Currently 1.4 million get less than €4 an hour, 1 million are on short-term contracts and 7 million earn £323 a month part-time, with no other job. Germany is doing well but not all its people are. Get your head around that one.

Here’s why I believe wages have to be regulated: you can’t rely on people to do the honorable and sensible thing where money is involved. Self-interest will always govern. It’s honorable to recognize that a business is a symbiotic relationship between management and worker. Without either the business fails. 

But the west has grown a culture that exploits the varying degrees of ignorance and low entitlement of the lower and middle classes. As sectors of society, in all countries, they haven’t known they had rights, they can’t see how much power they held in their hands, they let themselves be taken hostage. If you don’t work for peanuts I’ll fire you, because somebody else will take the job. 

When you have low entitlement you let yourself be exploited and it becomes so uncomfortable that you do something about it. And it is true that since the industrial revolution people in the working and middle class the world over have become increasingly aware of their power and their rights.

But not enough to have prevented this huge imbalance in society despite regulations that haven’t addressed what boils down to unfair reward for output. It’s why we have ultra poor and ultra rich. There’s nothing right or rational about it. And with huge corporations and the stock market being a big factor in economies now, the problems are getting bigger. Large businesses want to keep their profits as high as possible because people are investing in them on the stock exchange. People who never ever have to think about the workers whose lives are being sacrificed so they, the traders, can make a buck without lifting a finger.

Small business owners need to compete with giant businesses and if they pay the kind of wages that workers actually deserve there’ll be no money to reinvest, to grow, to keep the cash flow flowing.
I’m not suggesting communism or even socialism. But I can see that all these years of what does really amount to exploitation of workers’ ignorance of what an important role they play in anybody’s business has led to. Societies with three sectors – upper class, middle class and workers - that are fast dissolving into two, the rich and the poor. The rich are increasingly making their money off the stock market. The more they do, the less businesses want to pay decent wages.

It’s an unreal situation and the result is that first world countries have reached or are slipping dangerously close to third world realities. No economy can survive in that state. If things aren’t getting better they’re getting worse, because nothing stays the same. 

The people who have slipped out of the middle class, and the workers who are getting poorer, get demoralized because, that’s right; they’re human beings, not economic statistics. They realize that their sense of honor and dignity, wanting to play their part, was just horribly exploited. They get angry. They riot. They refuse to work. They’ve got nothing to lose, so there’s nothing to exploit.

Eventually we’ll have a world where there aren’t any more workers and middle class people to create the fundamental engine without which there is no stock market.

What Angela Merkel Isn’t Admitting To

 Photo courtesy Wikipedia

Double standards and a very creative, resourceful capacity for denial have come to be almost the hallmark of western mainstream culture. Take the way we behave around borrowing and lending money. Financial lending institutions survive by lending, but when you sit across from your bank manager in a chair a few inches lower than theirs, to ask for a loan, they don’t treat you like an equal, even though without people like you they don’t have a job. 

They’ll never acknowledge the deal is mutually beneficial, and that therefore the terms should be too. Blame it on society’s values. Philanthropy is high on the list of admirable traits. But a person needing to receive is at the bottom of the pile. There’s a distinct absence of logic here. In reality, nobody lends money solely for the other person’s benefit. It’s always a mutual deal, and it’s usually about control for the lender. Between individuals generosity may be mixed in there, but it’s not always the motivating factor. 

Who is ever going to admit “I’m helping you because it gives me, at least in my head, the right to dictate to you and that gives me a sense of control in my world.”? Not many are honest enough with themselves to acknowledge it. They’re enabled by society’s blind spot around lending money: it’s only a mutual deal if the lender gets money back. Well, that’s a value, but it’s arbitrary. In politics it's more convoluted, but essentially the same double standard and blind spot play out.

As with Angela Merkel. Conveniently for her and her supporters, but rather less so for Greece, the world is fixated on Greece’s needs and irresponsibility. A big nasty word to apply to a whole nation. With this as the only perspective, it’s understandable that Germans should balk at bailing out the Greeks with their hard-earned money when they’ve been disciplined and the Greeks haven’t. It sounds good and righteous to say that Angela Merkel should have the right to dictate terms, no matter what impact they have on Greeks. But it’s not the whole truth. 

She doesn’t have the God-given right to dictate terms of the bailout to such an extent that they destroy lives, for this simple reason. Germany is getting something out of the deal also. Its economy strengthened because of sweeping welfare cuts and wages kept lower than elsewhere in Europe, so it can rest on its laurels for that, although I don’t think it makes for sustainable strength because it disempowers the middle class and encourages greed and exploitation. 

But setting that debate aside the competitive edge European countries gained with their regular currency devaluations was eliminated by the Euro. At that time Europe was Germany’s biggest export market. It’s done quite nicely by the Euro and by squeezing its own people. And even though it has shifted its export focus to growth markets, the declining Euro has made German goods more competitive. Plus Germany has got to be aware that growth markets are slowing, so where will it turn to sustain its own growth? Back to Europe?

I’m not taking away from the truth that Germany has rebuilt its economy, although off the backs of its own workers. So it’s easy to understand why people who work too hard for too little would get resentful of their country giving to people who have let things get out of control. But none of that takes away from the reality that the bailout is a quid pro quo. In reality Germany is saying “we need you so that we can remain strong, so you must do what we want, and we don’t care if you starve. We won’t, and that’s all that matters.” 

No wonder Greeks are angry. Angela Merkel wants to have her cake and to eat it also, and I don’t think she can pull it off. Greeks aren’t easily controllable. They’re a passionate race, hot blooded, and they’ve been pushed to the point of no return. This isn’t politics for them. This isn’t a game. It’s about real suffering. Politicians can’t just deal in the convenient world of figures and double standards. They have to take humanity into account. Otherwise humanity will take them down.