Donald Trump vs. Amazon (And Why He Will Lose)
Published in Dinero En Imagen
(Mexico) on 2 April 2018
by Edgar Amador (link to original)
(Mexico) on 2 April 2018
by Edgar Amador (link to original)
Translated from
by William Mastick.
Edited by Joel Horowitz.
Donald Trump would like to return to a time when the United States was the world's undisputed leader. Even if that was at a time during which there was an arms race against the Russians (whom he adores, oh so much). But his archaism is not limited to imperial machismo. It also includes nostalgia for an economy that was less productive and closed to innovation and development as shown by his deep animosity and misunderstanding of Amazon, one of the companies that has defined the global economy in recent decades and will continue to shake up the established order.
Real estate millionaire* Donald Trump, who made his fortune by providing leisure and entertainment to other millionaires, suffers from a profound ignorance of modern capitalism. He disregards the fact that the present-day economy relies on constant innovation and savage competition to create new processes, inventions and devices that revolutionize the way we consume, produce, distribute and transport our goods and services as well as the ways we spend our free time.
Trump was born a millionaire and never had to innovate or risk a thing. Everything was given to him and he has dedicated himself to creating real estate developments for other millionaires to establish offices or play golf. That is as far as his entrepreneurial talents extend.
While Trump was building casinos and office towers, Steve Jobs founded Apple, the largest company in the world, and invented the personal computer which wound up being the signature technological device of the modern era. While Trump was indulging his ego as the protagonist of an idiotic reality show (The Apprentice), an eccentric inventor, Jeff Bezos, used the newly burgeoning internet to remotely sell books and create a business named Amazon. Since tearing down traditional bookstores, Amazon has stormed into one industry after another, radically overhauling the way goods are transported from production sites to our homes and destroying the middleman, cutting prices and costs for consumers.
If, despite 10 years of massive monetary expansion by central banks, inflation has not shot up, it is most likely thanks to companies such as Amazon which have dramatically streamlined supply chains. And like Apple, their products are used by consumers to reduce time, costs and processes to choose goods and services.
One industry after another -- book sales, travel agencies, car rentals, bank transfers, the purchase of clothing and food -- all have been radically transformed by Apple, Google, Amazon, Facebook and other technological giants.
Those giants have slashed intermediation costs between producers and consumers. Before “e-tailers” came into the world, bookstores, travel agencies, banks, printers, brokers and commission agents all flourished as intermediary businesses thanks to the inefficiency of communication and information that existed. Furthermore, these intermediary businesses added their costs to the value chain, raising prices.
Amazon, Apple, Google and the like have decimated the need for intermediation, bankrupting thousands of middlemen and keeping for themselves much of the value that was previously on that link of the supply chain, passing better prices on to end consumers.
Trump's crazy tweet last week is obvious. “[They] are putting many thousands of retailers out of business!” the unhinged White House resident tweeted. Yes. It's true. But thanks to the elimination of thousands of inefficient middlemen, we now have hundreds of millions of consumers who enjoy better prices and higher quality products in less time. The golf course developer has a miserable understanding of the fundamental process of modern capitalism. Joseph Schumpeter called this “creative destruction” to describe the tremendous force involving technological innovation and its deep impact including financial and human costs.
Trump thinks the power to fire nuclear weapons that comes with the presidency is enough to halt the march of capitalism. It is not. This maniac set out on a mission to stop Amazon. He will not be able to. He will be cast aside by the unstoppable march of the lifeblood that moves modern capitalism: technological innovation.
*Editor’s Note: Donald Trump is a billionaire, not a millionaire, although he was a millionaire earlier in his career.
Real estate millionaire* Donald Trump, who made his fortune by providing leisure and entertainment to other millionaires, suffers from a profound ignorance of modern capitalism. He disregards the fact that the present-day economy relies on constant innovation and savage competition to create new processes, inventions and devices that revolutionize the way we consume, produce, distribute and transport our goods and services as well as the ways we spend our free time.
Trump was born a millionaire and never had to innovate or risk a thing. Everything was given to him and he has dedicated himself to creating real estate developments for other millionaires to establish offices or play golf. That is as far as his entrepreneurial talents extend.
While Trump was building casinos and office towers, Steve Jobs founded Apple, the largest company in the world, and invented the personal computer which wound up being the signature technological device of the modern era. While Trump was indulging his ego as the protagonist of an idiotic reality show (The Apprentice), an eccentric inventor, Jeff Bezos, used the newly burgeoning internet to remotely sell books and create a business named Amazon. Since tearing down traditional bookstores, Amazon has stormed into one industry after another, radically overhauling the way goods are transported from production sites to our homes and destroying the middleman, cutting prices and costs for consumers.
If, despite 10 years of massive monetary expansion by central banks, inflation has not shot up, it is most likely thanks to companies such as Amazon which have dramatically streamlined supply chains. And like Apple, their products are used by consumers to reduce time, costs and processes to choose goods and services.
One industry after another -- book sales, travel agencies, car rentals, bank transfers, the purchase of clothing and food -- all have been radically transformed by Apple, Google, Amazon, Facebook and other technological giants.
Those giants have slashed intermediation costs between producers and consumers. Before “e-tailers” came into the world, bookstores, travel agencies, banks, printers, brokers and commission agents all flourished as intermediary businesses thanks to the inefficiency of communication and information that existed. Furthermore, these intermediary businesses added their costs to the value chain, raising prices.
Amazon, Apple, Google and the like have decimated the need for intermediation, bankrupting thousands of middlemen and keeping for themselves much of the value that was previously on that link of the supply chain, passing better prices on to end consumers.
Trump's crazy tweet last week is obvious. “[They] are putting many thousands of retailers out of business!” the unhinged White House resident tweeted. Yes. It's true. But thanks to the elimination of thousands of inefficient middlemen, we now have hundreds of millions of consumers who enjoy better prices and higher quality products in less time. The golf course developer has a miserable understanding of the fundamental process of modern capitalism. Joseph Schumpeter called this “creative destruction” to describe the tremendous force involving technological innovation and its deep impact including financial and human costs.
Trump thinks the power to fire nuclear weapons that comes with the presidency is enough to halt the march of capitalism. It is not. This maniac set out on a mission to stop Amazon. He will not be able to. He will be cast aside by the unstoppable march of the lifeblood that moves modern capitalism: technological innovation.
*Editor’s Note: Donald Trump is a billionaire, not a millionaire, although he was a millionaire earlier in his career.
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