Could we let Jeff Bezos run Amazon without allowing him to own so much of it?
Allow me to say that I’m still a big fan of capitalism, but I’m starting to think about how it may need to evolve with changing social views. Here are my naive thoughts…
I should start by saying I’m initially uncomfortable with this idea. As an adult, I’ve always been a fan of capitalism and I get how it is a very efficient system for managing scarce resources. (I have a minor in economics, so I better understand this.) Capitalism has also generally treated me well as a technology professional in software engineering and data science. So I’m obviously a big fan of capitalism and suspicious about any government intervention.
Nonetheless, I sense there’s a growing concern about the extremely wealthy, chiefly Jeff Bezos. That’s hard for me to accept because I’ve been a huge fan of Bezos for a long time. As a relatively early adopter of Amazon (late 90s), I’ve always appreciated how this business served me well. It’s been exciting to watch his venture grow and see Bezos controlling such a massive and successful enterprise that continues to delight me as a customer, both through my personal usage of everything Amazon and my professional usage of AWS. Also, I bet my index funds have a disproportionate amount of AMZN so disclaimer I’m an investor in Amazon. Definitely a big fan of Bezos! Go AMZN!
Further, I would defend Bezos against anyone who says he’s not the best person to run Amazon. Seeing as he’s a former DESCO executive (sophisticated quant hedge fund), I think he’s now more appropriate than ever to run the massive enterprise that Amazon has become. In many ways, I think of Amazon as the Bezos hedge fund in which he manages a portfolio of high growth initiatives. I bet he finds it much easier for his team to build financial models around these initiatives with all the internal data he has. I don’t think even Wallstreets wants Amazon broken up because then they’d have to prove that they can do a better job than Bezos at analyzing these enterprises and critiquing business narratives in more detail.
So as I consider the contemporary discussion around wealth redistribution policies that would take away Bezo’s ownership of Amazon, I immediately have a negative reaction. Is that even moral?
Assuming we as a society come to accept this as moral, what would we do with the Amazon stock? Would we just sell it on the market? How would we do this in a way that doesn’t massively disrupt the essential Amazon enterprise and our economy as a whole? Would we instead engage in a long term selloff of strategy with proceeds going to the IRS? If so, how would we vote those Amazon shares while they're in possession of the government?
Further, how would we decide a reasonable sell-off strategy for this Amazon stock? What if we as citizens believe Amazon will be worth a lot more in the future and we’d like to hold this as a growth investment? Voting on this may be out of the question, but wouldn’t we at least want financial expert’s advising the government on how to manage our new investment? It’s a lot of money at stake!
Lastly, in commandeering some of Bezos’s wealth we are reducing his voting power in deciding the future of Amazon. It’s totally possible that we’d give someone else the opportunity to change the future of Amazon, including firing Bezos. Of course, shareholders could already do that, but it’s harder for them to accomplish that with Bezos holding ~17% of the votes. His divorce will already weaken that, but it’s possible the couple are still aligned professionally.
While it may sting a little to do so, let me at least propose an approach that may be a more reasonable way to decrease Bezo’s mega-wealth while promoting social good. I also attempt to minimize disruption to the enterprise that is Amazon and our economy as a whole. Lastly, it doesn’t necessarily have to go to the government, although we could incentivize that.
My basic strategy is that we could require Bezos to give up ownership above some massive threshold (say $10 billion) and give him some choice in where the capital goes. He could choose a “charity hedge fund” (e.g., the Harvard endowment $37-billion hedge fund). Particularly, he could find a charity that he’s initially aligned with in terms of Amazon vision. The capital would be entrusted to true professionals who would make decisions about how to vote and liquidate positions for the best long-term interest of their charitable institution.
I know Bezos is very excited about space. So if he wanted, he could set up a charity that directly funds NASA. Or we might even let him fund his existing space enterprise, Blue Origins if he makes it a nonprofit. Again, we can give Bezos some choice in where the capital goes. We’ll just have strong regulations about how these organizations must be separated from Bezos. Further, we can require the receiving organization to uphold their duty to a social mission that is part of their charter. And maybe we can even develop mechanisms for society to amend nonprofit charters when they don’t serve the social good by standards we develop.
There may be some bumps along the road, but might this not be a general strategy for minimizing the influence of the mega-wealthy while still allowing capitalism to do its thing in promoting efficient resource allocation? After all, these would be charity hedge funds with sophisticated financial management. Would we capitalist not entrust such fund managers as fiduciaries for society in managing these charity assents? Plus, Bezos can choose the best financial management, including choosing people aligned with his vision. As could any other billion that finds themselves having to dispose of their excess capital in a socially beneficial way.
I’m sure this strategy is full of holes in how it could be exploited by the rich and powerful. It may also be disastrous for the economy for reasons that I can’t comprehend. Lastly, there may be moral arguments for why such massive wealth commandeering is out of the question. I’d really like someone more educated on these matters to let me know what a better strategy would look like if we assume that changing social currents push for reform on the absurdly wealthy.
