Amazon, Destroyer of Worlds

Moneybox
A blog about business and economics.
Nov. 5 2012 9:24 AM

Amazon, Destroyer of Worlds

David Streitfeld has a piece about the enormous backlash against Timothy Ferriss for signing with Amazon to do an Amazon-published book. Barnes and Nobel and a growing roster of independent bookstores say they won't sell the paper copies of a book published by an imprint owned by a company they perceive as aiming to destroy them.

Charlie Stross offers a longer take on this theme, focusing on what he sees as Amazon's evil plan to dominate the book industry and use a combination of monopoly and monopsony power to destroy everything.

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And maybe so. But as I've said before, this isn't even really what's so terrifying about Amazon. It's like that scene near the end of Apocalypse Now where Kurtz says the higher-ups said his methods were unsound and Willard responds "I don't see any method at all, sir." If Amazon does have an evil Part B to its plan where it uses its monopoly status to jack up profit margins, that at least gives competitors a fighting chance. The real risk is that "sell the devices at cost and make it up on e-books, but wait, we don't make profits on those either" is all there is to the plan, and Amazon's investors have just unleashed a storm of locusts on the world that will ruin everyone else's profits.

But for consumers, it's great. An Amazon Prime membership is the most outrageously good deal in commerce today. But competitors should be afraid. It's an amazing deal and you can't beat it precisely because Amazon can't make it work, either!

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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