Amazon’s first and most important Leadership Principle is Customer Obsession. Having worked there I can confirm that it’s deeply ingrained in the culture.
This is one reason why Amazon has been such a resounding success.
However, if customers come first then everything else comes afterward. That includes their own employees, the environment, and almost any type of local business. I believe this pattern is evident in myriad ways and is a product — as well as a requirement — of the business model.
This is bad for our planet and society.
And yet most such corporate behavior — and the equally troubling behavior of companies like Facebook and Google — is dismissed because of the ‘convenience’ these companies bring to our lives.
This extends to other sectors like fossil fuels, transport (conventional manufacturers and Lyft/Uber), pharma, and big ag.
Current U.S. anti-trust policies follow the Federal Reserve in assuming that lower consumer prices are always a good thing. Thus, if consumer prices aren’t rising then it’s very difficult for regulators to undertake anti-trust action against a corporation. This makes sense: monopolies have historically been associated with practices like price-fixing that are clearly bad for consumers. If consumers are happy, society and our planet are happy.
This thinking is a large part of our standard economic model. But it probably shouldn’t be.
Collectively, we are beginning to realize that negative externalities associated with rapid economic growth (pollution, automation, resource depletion) are vastly — if not completely — unaccounted for in that standard model.
Back to Amazon. Why are their prices so cheap? Well, they aren’t when you consider the full cost to society and the planet.
A perfect calculation would be impossible, but here are some negative externalities that we know for certain aren’t included in your next Prime shipment:
- Warehouse workers suffering poor working conditions and receiving low compensation. When the company added a $15 minimum wage in response to previous criticism, they immediately removed the eligibility of those employees to receive stock options…the next day.
- Ever more packaging waste. Even considering feel-good offsets like the creation of new jobs, more trash in the world is not a good thing. Our country’s recycling infrastructure is horrid and China is no longer covering for us. Some of the biggest contributors to this waste creation — eCommerce giants like Amazon — do nothing meaningful to support infrastructure improvements, and in some cases pay little to no taxes.
- Amazon kills small businesses and acquires competitors. Visit any town in America and speak with local people. Many of them will mention local stores that were unable to compete with Amazon and Walmart. Since 2015, Amazon has been opening physical book stores… after having very effectively put many independent book stores out of business. If a startup emerges that is directly competitive or successful in a vertical that Amazon covets, the company will likely attempt acquisition or deal with it another way.
When negative externalities are considered, it might seem appealing to patronize your neighborhood hardware store and pay a little extra for that new tool.
We let corporations effectively regulate themselves thanks to lobbying, corporate citizenship, and toothless watchdog agencies. It’s in the news every day in some form or another. Our legal system codifies convenient ways for companies to finger point and avoid true penalties for their actions — think Wall Street banks in 2008 or ExxonMobil for the last 40 years. And that cycle is repeating itself for Facebook’s data breaches, Amazon’s societal sustainability, and Google’s ethics.
One refrain is often heard when discussing a web of problems like this:
“Well, what they did was wrong, but it wasn’t illegal”
That’s a huge f*cking problem. We need to make it illegal.
There are many, many benefits that come from living in modern, capitalist society. But the status quo is going to lead to the end of humanity as we know it. https://xkcd.com/1732. Whether the nail in the coffin comes from climate disasters, unchecked AI, or nuclear war doesn’t really matter very much. It might be all of the above. But there’s no logical reason to think we can hack ourselves out of this pickle with a business-as-usual mentality. (I will go further on that topic in a future piece).
Whether it is climate change, world war, water & food shortages, mass migration, or a combination of all the above we are headed for much worse times. That is…unless human, and by extension corporate, behavior changes dramatically.
This is a dark, depressing concept. But I believe an objective observer must come to the same conclusion. And guess what? That’s okay. It’s important for all of us to feel okay about acknowledging that.
We can’t do anything to fix something that’s broken unless we can hold it in our hands and observe that it’s broken.
Back to the mega-corporations that run our economy and by extension the world….
Without their help in changing societal behavior — and governmental support in effectuating that change — our great-great-grandchildren will live in a reality that most people today would consider impossible.
If corporations aren’t going to change their priorities — which will require them to damage their bottom lines and put society over shareholders — then we need politicians and regulators who will make them.
Among other things, this means:
-Aggressive anti-trust action against big tech and other offenders, based on holistic calculations of harm and not just consumer price levels. This sets out a financial incentive to conduct business ethically within the capitalist system.
-Devastating financial penalties for corporations that skirt rules, endanger lives, and fuel negative externalities. Currently, these fines are paltry at best for big companies and should be based on % of revenue + accelerate with repeat offenses.
-Strict criminal penalties for CEOs, boards, and execs that knowingly abuse loopholes, thwart laws, and shirk corporate responsibility. Create lifetime bans from leadership for offending executives. By reinvigorating and empowering watchdog agencies (EPA, FDA, SEC, …) it is possible to fairly govern ethical corporate behavior.
-Repeal Citizens United and ban ex-industry leaders from serving as regulators for their industries. (This type of ‘perfectly legal’ bullsh*t is exactly what generally precedes the refrain I mentioned earlier). Corporations have enough rights… seriously. We need to pass laws that align with science-based environmental policy and quality-of-life-based measures of societal progress.
This broken system is a big reason why the status quo on this timeline leads to the end of life as we know it. We can do better. But first, we have to accept what’s happening. And not just in the #IAgree sort of way. Actually acting as if.
Vote with your dollars. Buy local & more sustainable when possible, pay for quality, and consider a corporation's social responsibility in your buying decisions. True responsibility and action; not the kind crafted for press releases. Divest your personal funds from fossil fuels and any company that doesn’t pay their fair share of global economic externalities.
A person cannot be judged for striving towards sustainability. Improvement and progress are a spectrum. A climate activist can drive a car, it is okay to order some things online, and everyone has to work to eat. Change takes time and distractions are counterproductive.
Vote for government representatives at all levels who will swiftly bring corporations to task for their behavior. Realistically, this is an all-or-nothing policy question: either a candidate supports completely redefining regulatory and economic policymaking in the frame of human & environmental wellbeing or they do not. This is not a question of one’s political party. Industry connections, large campaign donations, and voting records can all be obvious indicators that a politician is bought. This is 2019. We know how this system works, right? Think about whether the person you’re voting for will support the rapid paradigm shift that is necessary (pg. 8 is a must-read) to give our great-great-grandchildren a nice world to live in.
A politician or corporation with a vested interest in the status quo will not take decisive action on climate policy, worker’s rights, green infrastructure, renewable energy, or data rights. The burden of proof is on them to show us otherwise.