Trump takes on Amazon

Jeff Bezos © Getty images
Bezos: providing a real life test of political theory

In the battle between Big Business and the Big State, who will come out on top?

Global corporations are a sinister force that secretly rule much of the world. A few mega-rich tycoons bend political systems to their will, writing their own laws and deciding how much tax they will pay. Politicians are bought and sold at will, and ordinary people are powerless in the face of big money. In the mythology of the far left, and indeed the far right, as well as in countless movies and thrillers, private corporations are depicted as dominating the world, wielding more power than presidents and prime ministers.

But is this really true? Now it seems we will get a real-life test in the form of an increasingly bitter conflict between Donald Trump and Jeff Bezos, the founder of Amazon. As the two men go into battle, we should get an idea of which is more powerful – Big Business or the Big State?

In the red corner…

On the surface, it looks like an evenly matched contest. In one corner there is the world’s richest man, who presides over a company with an estimated 300 million customers, more than half a million staff, owns The Washington Post, one of the world’s most influential newspapers, and controls vast amounts of data on just about anyone who ever bought anything over the web. It is hard to think of a more influential tycoon in all history.

In the other corner, there is the president of the US. Trump may well be the most chaotic occupant of that office in a long time. But he still holds the levers of the most powerful government in the world. He commands the world’s largest armed forces, and presides over millions of staff.

The two men have now locked horns in what looks like a bitter fight. Angered by attacks on his presidency in The Washington Post, Trump has turned on the internet giant. “They pay little or no taxes to state and local governments, use our postal system as their delivery boy (causing tremendous loss to the US) and are putting many thousands of retailers out of business,” said Trump in one typical tweet.

The conflict has wiped billions off Amazon’s market value as investors grow nervous about a regulatory clampdown on its operations. So far it is mostly just hot air, of course. But if the US does decide to clamp down hard on Amazon, it has the power to cause some big problems.

And the winner is…

The row highlights something more interesting than a clash of two egos. The left claims the power of corporate elites is growing as globalisation takes them beyond the reach of elected governments. Bezos surely exemplifies such power. Yet that may amount to nothing against the power of a determined politician.

Take taxes, for example. It is not hard for the government to collect anything that is owed, and it can impose new ones relatively simply. The EU is already planning a new turnover-based tax on internet companies, a move largely aimed at Amazon and the other US web giants. It would not be hard for Trump to propose something similar for the US. Nor would it be hard to tighten up on delivery laws. Governments introduce new health and safety rules all the time.

A few of those on home deliveries, plus some restrictions on working hours, could send Amazon’s costs soaring. Anti-trust laws provide a huge range of penalties against any business that becomes too powerful. It wouldn’t be hard to argue that Amazon was too dominant in e-books, for example, and to start demanding that unit be sold off.

Of course, Bezos could fight back, and he would have tools at his disposal. Some Wall Street analysts have already worked out that there are as many members of Amazon Prime as there were Trump voters at the last election. Yet, at the end of the day, the law is the law and Amazon has to obey it just like everyone else.

The truth is that Big Business is far less powerful than most people imagine, and a lot less powerful than the Big State. The Trump versus Bezos battle is about to make that clear – because if it does turn into a full-scale war, Amazon will almost certainly be the loser.

  • Peter Edwards

    Amazon is an information company, selling physical goods is just a front and I believe until recently a loss making one.

    Big government can not afford to disrupt these companies too much as they are in a winner takes all battle to achieve Genera AI.

    These companies with their vast data repositories and the compute power to bring that information to work arr becoming more important than the bank’s that underpin the Economy.

    I look forward to government knocking down them a peg or two so I can load up on their shares.

    These companies will be the government….

  • Timothy Stroud

    There are apparently two elements to the Deep State, which ultimately runs the
    USA. First you have the financial world on Wall Street, and second you have the
    CIA. It is not clear how Wall Street will react to a battle between Trump and Bezos.
    The CIA takes its orders from the President of course, but this not a battle in
    which the CIA is really involved.

    The President may appear superficially to be all powerful in US politics, but this
    is not the case. as the new book by Comey illustrates. Washington is not Moscow.
    The President has to obey the rules and the constitution.

    Trump being Trump, he is completely fearless, and shouts out his feelings
    through twitter. He loves being bombastic. But it is a mistake to think he cannot
    or will not take advice. Everything in Trump’s world is governed by his desire to
    be re-elected in 2020, and that includes a battle with Bezos.

  • Oliver St.John-Mollusc