Sometimes we think we know the meaning of a word only to discover we don’t. Take the word monopoly. It used to mean a business large enough to eliminate its competitors. When that happens, we expect goods and services to go up. But, as Franklin Foer writes in a recent essay, today monopolies are created by driving prices down, so low that competition can’t survive. (If You Like Amazon…” by Franklin Foer, New Republic, October 27, 2014 pgs. 16-22.) Two companies that use this strategy are Walmart and Amazon. What’s more, they’ve grown so dominant in their field, that they have enough clout to dictate to their suppliers.
Walmart, for example, told Coca-Cola what artificial sweetener to use in its diet soda. It has ordered Disney to cut scenes from some DVDs. It has demanded that Levi’s reduce the grade of cotton in their jeans to lower the price. And it has demanded that lawn mower manufacturers alter the grade of steel used in their machines. (Ibid pg. 20.) Amazon, too, attempts to control makers of the products it sells. Its war with mainstream book publishers is one example. (Blog 9/23/14)
The Federal Trade Commission has taken little note of this new brand of monopoly that not only crushes competitors but drives out unions as well. Their only masters are consumers because to exist, these companies need large sales volumes. To keep customers faithful, Walmart and Amazon provide conveniences to which the public has grown accustomed, like free Prime movies, free gift wrapping, free two-day shipping and one stop shopping. What these buyers fail to see is that short term benefits result in poor wages and working condition for company employees and the employees of suppliers — the clothing industry being a prime example. (Ibid, 21)
To force monoliths like Walmart and Amazon to change their wages and working conditions, shoppers would have to rethink their buying habits. That’s a tall order. The human race isn’t good at weighing short term gains against long term goals. If we were, we’d have solved climate change long ago.