The vacuum cleaner business was so brisk, in fact, that the company that made them opened a branch factory in town. The factory used a lot of electricity, of course, and so did the women with their vacuum cleaners, so the local electric power company had to put up a big new plant to keep them all running. In its furnaces the power plant burned coal, and out of its chimneys black smoke poured day and night, blanketing the town with soot and making all the floors dirtier than ever. Still, by working twice as hard and twice as long the women of the town were able to keep their floors almost as clean as they had been before Mrs. Jones ever bought a vacuum cleaner in the first place. -- Robert C. O’Brien, Mrs. Frisby and the Rats of NIMH
There was a woman in a small town who started buying on Amazon. Her name was Mrs. Jones, and up until then she, like all her neighbors, had made all her purchases at the local shops: the butcher, the greengrocer, and even the bookseller where she worked. But Amazon was cheaper and faster, and soon Mrs. Jones was the envy of all the other people in town -- so they started buying on Amazon, too.
The business on Amazon was so brisk, in fact, that Amazon had to hire many more workers. Because so much of the business had gone to Amazon, some of the local shops had to shut down. Some of the people who lost their jobs could go and get a job at Amazon, but many more people lost their jobs than could be hired at Amazon. Also, the jobs at Amazon were usually in a different city and the people had to move in order to work there.
Then, one day, a pandemic came. To save lives, most people were asked to stay at home as much as they could. And even if you were allowed to go out for essential items, most people didn’t want to go out if they could avoid it, because they were trying to stay safe. Plus, they didn’t have to go out; they could buy everything cheaper and faster on Amazon.
Amazon hired even more people: 175,000 people. The owner of Amazon, Jeff Bezos, increased his wealth by $24 billion. He donated $100 million of it -- 0.4% of the increase in his wealth, or 0.07% of his total wealth -- to support a food bank charity.
Meanwhile, many more local shops and businesses closed, and many, many more people lost their jobs than could ever be hired at Amazon: more than 26 million.
When the pandemic subsided and people could leave their houses again, there were no local shops: no butcher, no greengrocer, no bookseller. The local restaurants had gone out of business. The local theater had closed.
Mrs. Jones, along with many of her friends, had lost her job during the pandemic. She went through many hoops to claim unemployment. Ultimately, she was successful, but of course she only received a tiny fraction of what she used to receive when she worked at the bookseller.
Because all of the local shops had closed, she had no choice but to keep buying on Amazon. As a result, as soon as she received any money, she sent it away from her community instead of spending it locally to support local businesses.
Both Mrs. Jones of Amazon and Mrs. Jones of the vacuum cleaner made very sensible choices. They wanted things cleaner, cheaper, faster. They wanted a better outcome for less money or effort. Who wouldn’t?
But both Mrs. Joneses forgot. They forgot that an economy is the result of the flows of money between and among people and organizations, and that just sending the money away suffocates the economy.
It wasn’t just Mrs. Jones. The regulators forgot that monopolies can generate negative impact even if they do keep prices low. And Amazon’s owner forgot that even rich people are better off if everyone is better off.
Stay safe. Stay sane. And -- if you can -- shop local.
This is an interesting parable, which, I think, does highlight some issues. But did anyone notice that the first half of the parable (The first Mrs. Jones Story) actually negates the second half of the parable?
The second half of the the parable is a clear strike at Amazon, but it bReal's down under some assumptions that don't stand the test of time.
First, Amazon doesn't make anything. The products are made by millions of people all over the world. Amazon isn't a vacuum cleaner manufacturer, it's the truck the vacuumed cleaner is delivered on.
Second, Amazon is an economy of its own. It's like a massive "small town" where billions of people can shop from virtual shopkeepers who are often just like themselves.
Finally, the assumption that jobs must be replaced with jobs completely misses an entire sector of the economy (and much of the reason Amazon exists to begin with). Many of the people who lost their jobs during Covid started home-based businesses to replace those jobs. And many of those new businesses market through Amazon. Those who looked for opportunities rather than excuses stand to earn far more from their fledgling companies than they could ever hope to earn on their previous jobs. And Bezos is only getting a slice of the pie.
Certainly, there are valid reasons to criticize Amazon, but the two-dimensional view if economies presented here seems rather near-sighted, and ultimately, causes more damage to local economies than does open trade.
Rather than lament, I encourage people to become part of the digital economy, create and sell their own products in that economy, and become an owners.
The world is always changing, and trying to lock in life at some moment in time is literally like trying to stop the tide. You can't. And you may drown trying to. But if you roll with it, you'll get an amazing ride.
Some people can't see beyond the noses on their faces. Your info is stored and sold. You are contributing to being their hostage. The time is coming, soon than you think, that all this information will be used for getting you to do something you don't want to do or don't like to do and it will be determined by people who will not have any problem with your elimination. First, you will not get your shoes. Then groceries. Then medication (oh, yeah that's next via Amazon). Your job, your healthcare, your life, your loyalty, your vision.