Amazing Amazon and the best deal ever

When you get something at 80% off on Amazon, who do you think wins — you or Amazon? If you think that’s a strange question, you ain’t seen nothing yet. Maybe it’s time we re:Invented some things.

But, how can possibly getting a huge discount be bad? It’s not, if you actually need what you’re buying, and know what you’re buying into. Do you?

Do you know what you’re getting out of that Black Friday deal?

Have you carefully considered your needs and decided a 21"” Plasma TV for the bathroom is going to make your life better? Then by all means, do get it on Black Friday rather than any other day. Do your market research, compare prices and features, track your model of choice and wait for Black Friday to get it. And get it where you can get the best deal — quite likely, Amazon.

That may be a preposterous example, but there’s a reason for seemingly irrational compulsive buying behavior: shopping feels good. It releases dopamine in your brain, a chemical that triggers your reward centers. And if you buy things at discount, the chemical kick is even harder.

It’s just the way our brains our wired, tracing back to our hunter — gatherer history. You may not know or get it, but Amazon sure does. So let’s reframe that question: who would you say is more business-savvy — you or Amazon? At the risk of getting ahead of ourselves, we have to go with Amazon here. So why would Amazon give you this kind of deal then, and what do you really get out of it?

Amazing Amazon

You probably know the Amazon story already. What has enabled it to go from a fringe online bookstore in 1994 to one of the most important forces shaping the world in 2017 is a combination of foresight and execution, technology and business acumen.

Amazon has a demonstrated ability to see what the latest technology can do for its business and integrate it faster and better than the competition. Online shopping was just the beginning, after a certain point Amazon has not just been pioneering the fusion of existing technology and business models, but also developing new ones.

Amazon went from selling physical goods online to making goods such as books digital and giving out the medium on which to consume them, building an empire in the process. It also expanded the range of what is sold online and built a vast logistics network to support physical delivery. Today Amazon dominates retail to such an extent that its orders account for up to 15% of international shipping.

Amazon has a huge impact in the world, both digital and physical

All that is not even taking into account Amazon’s recent acquisition of Whole Foods, which combined with its -once more- pioneering use of digital technology in the physical realm could mean it will soon dominate not just what lands on your desk but also on your table.

Amazon has also been a force for digital transformation. The cloud, machine learning and product recommendations, voice-activated conversational interfaces — these are just some of the most visible ways in which Amazon and its ilk have pushed technology forward.

Amazon really is amazing. There’s just one problem: the one thing in Amazon’s agenda is Amazon.

That’s not to say that everyone at Amazon is rotten of course — far from it. There are extremely smart people working for Amazon, and some of them are trying to promote commendable causes too. And all this technology makes things better, faster, cheaper for everyone, right?

Black Friday

Do you know where the term Black Friday comes from? It started being used in a different way by employers and workers. As Thanksgiving on Thursdays is a holiday, the temptation to call in sick on Friday and have a 4-day long weekend was just too big. On the other hand, since stores are open on that day, people still go out and shop.

The combination of reduced manpower and increased demand is what made employers start calling this Black Friday, as black had a negative ring to it. Eventually marketing succedded in making this an iconic day for shopping, so the connotation is not negative anymore. Not if you’re not a worker anyway, which brings us to an interesting point.

This Black Friday, Amazon workers across Europe will be on strike. Furthermore, grass-roots initiatives are calling for demonstrations and boycotts against Amazon. Before you get all upset about your order possibly arriving late, it’s worth examining the reasons behind this.

Amazon has been known to push its workers to their limits. This means minimum wage, harsh working conditions and doing everything in its power to keep them from unionizing. That includes offshoring and hiring workers from agencies as temps, even though they may be in fact covering permanent positions. In that respect of course Amazon is not that different from other employers.

Not what most people would think of when talking about Black Friday workers, but there are more connections than you think

You could even argue Amazon sort of has to do this. If others do it and it’s legal, how else will they be able to compete, and why would they not do it? After all, keeping cost down and pushing people to get as many packets as quickly as possible means you can get your order for cheap and on the next day, which is great. It’s great if you’re a consumer and it’s great if you’re Amazon.

So why care about some workers doing low-paid, low-skill jobs? Their jobs will soon be automated anyway, and rightly so. Amazon is already automating its warehouses, meaning things will be done faster and smoother. Less manual effort, less accidents, less people needed, and no strikes too. And even the Mechanical Turks will not be needed soon, these tasks are better done by machines.

But what will the people whose jobs are made redundant do?

Brilliant machines

Of course, it’s not the first time we’re seeing something like this. Before the industrial revolution, most of the population used to work in agriculture, and now only 2% does. There are all sorts of jobs nobody could possibly think of at the time which are now made possible by technology. Technology creates jobs, is the adage.

But who creates technology then? People do, workers do. You would then assume the benefits of technology should all come back to them in a virtuous circle of shorts. Unfortunately that’s not really the case. Even though productivity is rising, which should mean reduced working hours and increased income, this is not happening.

[There] is [a] growing gap between productivity and wages. And you can see this in the gap between productivity, a measure of the bounty of brilliant machines, and how it’s being distributed in terms of wages. If we had an inflation-adjusted, productivity-adjusted minimum wage today, it would be something like $25 [an hour]. We would not be arguing about $10.

Laura Tyson, former Chair of the US President’s Council of Economic Advisers

You may argue that there’s the people making these “brilliant machines”, the people doing the low-end jobs, and consumers. We don’t need the low-end jobs, so let’s just retrain these people. Let us all become engineers and data scientists and AI experts, problem solved then, and we can consume happily ever after, right?

Building machines that build machines

Not really. Despite what you may think, engineers and scientists are workers too. Their work may require intellectual rather than physical labor, but at the end of the day, one thing is common: what they produce does not belong to them. It matters not whether you are a cog in a machine or build the machine, as long as you don’t own it. So if we build machines that can do and build more for less, where does that surplus value go?

The best deal ever

If anything, this is the best deal the Amazons of the world, much like the Fords before it, have managed to sell. They have succeeded in riding and pushing the wave of consumerism to disassociate people with the nature of their work to the point where they come to identify themselves as consumers rather than workers.

While it may not be true that Henry Ford started paying workers $5 wages so they could afford his cars, it is true that Amazon pays its workers in part with Amazon vouchers. This is taking an already brilliant scheme to new heights. Workers not only identify as consumers, often turning against other workers, but also keep feeding the machine they build.

So you have raw materials and infrastructure, labor that transforms that into goods and services, and their estimated value. Without labor, there is no value: extracting material and creating infrastructure also takes labor. Yet, the ones putting in the labor get a fraction of that value and zero decision making power in the companies they work for.

But, what about the entrepreneurial spirit of the creators or the Amazons of the world? Surely, their hard work and foresight deserves to be rewarded? As technology and automation progress, menial jobs are becoming obsolete and workers are asked to work not just hard, but smart. To take initiatives, be creative, bold, and entrepreneurial. And workers do that, but in the end that does not make much of a positive difference in their lives.

If data is the new oil, what are the oil rigs?

And what about the brave new world of big data automation? Surely, in this new digital era of innovation there are so many opportunities. All it would take to bring down these monopolies would be disruptive competition, so if we just let the market play its part it will work out in the end — or will it?

If data is the new oil, then the oil rigs for the new data monopolies that are the Amazons of the world are their data-driven products. They have come to dominate and nearly monopolize the web and digital economy to such an extent that if this is not realized and acted upon soon, it may be too late.

Wake up or scramble up

But, sure companies must understand this, right? They must care about their workers, they must have a plan to prevent social unrest, right? How does someone who automates the world’s top organizations answer that question?

“Time flies and technology waits for nobody. I have not met a single CEO, from Deutsche Bank to JP Morgan, who said to me: ‘ok, this will increase our productivity by a huge amount, but it’s going to have social impact — wait, let’s think about it’.
The most important thing right now, what our top minds should be starting to say, is how to move mankind to a higher ground. If people don’t wake up, they’ll have to scramble up — that’s my 2 cents”.
Cetan Dube, IPSoft CEO.

Tyson on the other hand concludes that:

“We’re talking about machines displacing people, machines changing the ways in which people work. Who owns the machines? Who should own the machines? Perhaps what we need to think about is the way in which the workers who are working with the machines are part owners of the machines”.

So, what’s your take? Which side are you on? Are you a consumer, or a worker?