There are two ways to develop a monopoly in America. One way is based upon capitalism, freedom and the free market.
This is the more transparent approach, but it also doesn’t have as much staying power, due to competition – the constant striving of others to build a better mousetrap, if you will. And despite what we think and are told, there is always a better mousetrap around the corner. This way is also much more difficult, for one has to remain on top of his game not only to achieve the goal of becoming a monopoly, but to maintain it.
Of course, this is merely an academic exercise, as Jeff Bezos of Amazon will likely discover as he seeks to conquer the retail industry. He will undoubtedly find that today, the second method is far easier.
The second method to developing a monopoly is through crony corporatism. For large companies seeking to own an industry, it is the best and easiest way to achieve there goal. It’s not what you know and how much you innovate – it’s whom you know and whom you can purchase.
The key to crony corporatism is in lobbying the political hacks in Washington, D.C. Amazon has been rapidly moving up the food chain to now be the world’s third-largest retailer, behind only No. 1 Wal-Mart and No. 2 CVS.
Bezos has made great strides toward becoming Numero Uno. He has acquired several online retailers and has recently snapped up Whole Foods for a whopping $13.7 billion. In fact, he is, in effect, redefining the word monopoly – stripping it of its negative connotation.
Companies of old would control an industry – becoming the only game in town. They could then start jacking up prices while caring little about servicing the customer. This is all people know of monopolies. But Bezos is doing just the opposite. He seeks to control the retail industry by servicing the customer with quality, service, speed of delivery and thrift. It is the anti-monopoly, monopoly.
The Amazon CEO, with all his innovation and marketing genius, to this point has assumed he could create a retail monopoly with little to no government meddling.
However, this is not the way things work in America, and maybe he is figuring it out, although possibly too late. Last year Bezos increased his Washington lobbying budget by 20 percent above 2015, to $11.4 million. This may sound like a lot, but it doesn’t hold a candle to those like the U.S. Chamber of Commerce and the National Association of Realtors, who spent almost $104 million and $65 million, respectively.
If Bezos doesn’t want to incur the wrath of the antitrust government nannies, he’ll have to pony up a lot more walking around money (hat tip – Al Sharpton). And if he’s planning to further expand the Amazon Empire, he had better start buying up politicians soon.
For the word antitrust is already floating around Capitol Hill. In fact, “Douglas Kass, the president of Seabreeze Partners Management Inc. and former senior portfolio manager at Omega Advisors, said on Wednesday that [antitrust] discussions are in early stages,” reports the Daily Mail.
Kass even advised his clients to begin “shorting,” or short selling, Amazon stock “in light of the apparently looming government scrutiny.” On Wednesday Kass said, “I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington, D.C., with regard to possible antitrust opposition to Amazon’s business practices, pricing strategy and expansion announcements already made. …”
There is only one tried and true way to gain monopoly status in America. One must first please the government overlords, by showering them with barges filled with tribute.
And don’t expect the free-market darling, Amazon, to garner any favor from our businessman president, for Bezos is on Trump’s radar. Aside from Amazon, Bezos also owns the liberal Washington Post – not exactly a friend of the president.