OPINION:
When Bernie Sanders and Donald Trump agree, it should arouse skepticism. That surely applies to their railings against Amazon.
Most fundamentally, Amazon is successful because it’s a lean competitor — not because it gets a sweetheart deal from the U.S. Postal Service, doesn’t pay taxes or exposes small businesses to unfair price competition.
Many large companies don’t pay a lot of corporate income tax because of how Congress chooses to write the tax code. Perhaps recent reforms will fix things but it’s patently unfair to blame Amazon for doing what most all businesses do — take advantage of the opportunities the tax code provides.
Online and brick-and-mortar retailers are not required to collect state sales taxes on shipments to states where they don’t have a physical presence. Amazon has fulfillment facilities in 45 states and pays sales taxes on products shipped from its warehouses into those states.
USPS has two principal lines of business: First class and bulk mail and packages. Its congressionally granted monopoly requires that it deliver mail to every address in the United States and no matter how remote the location, it charges the same 50 cents for a first class letter. Together, those just about guarantee a loss.
USPS has managed to reduce the red ink by providing last-mile service for the less urgent packages of delivery giants like FedEx, UPS and now Amazon. That business buoys the postal service by piggybacking on its essential infrastructure.
Finally, Amazon has been accused of tough price competition that has shaken up markets, for example for diapers delivered directly to homes and book publishing. Regarding the former, it can’t be exploiting consumers now that weaker competitors have been driven out, because the primary vendors for diapers are grocery stores. And Walmart, which dwarfs Amazon in footprint and retail sales, also offers inexpensive home delivery.
Prior to Amazon, the market for popular books reduced to a handful of large publishing houses that overcharged consumers on best-sellers to subsidize unprofitable authors — writers the publishers thought were good for us.
Now thanks to Amazon, best-sellers are cheaper, and it has helped create a remarkable self-publishing platform through Kindle. Electronic publishing permits authors to bypass the cultural screening of big houses and lets the public decide who should be read.
Amazon has been threatening to hidebound mall owners and smaller merchants for the same reasons that General Motors and other 20th-century firms got big in their heydays — better ways of making products or delivering services. It can deliver goods to consumers with about half as much labor as brick-and-mortar stores, and many shoppers prefer the convenience of at-home delivery to the hassle of going to stores.
Last October, just rumors that Amazon was exploring the prescription drug business sent down stocks of CVS and Walgreens. Still, brick and mortar dominate — Amazon has only a 4 percent share of retail sales, which is much less than Walmart.
Amazon’s greatest successes are coming by taking on industry giants. It’s the dominant player in Cloud computing, beating out IBM, Microsoft and Google, its Echo is giving Apple’s Siri a tough challenge, and now it’s taking on UPS and FedEx in express delivery and venturing into ocean shipping.
That’s not the work of a big company that bullies little guys — it’s a team that now schedules the mightiest competitors it can find.
Now Amazon seeks a major role in drones, autonomous drive cars and artificial intelligence — fields populated by the largest defense contractors, auto companies and other tech giants. Amazon has not likely violated antitrust rules, and Washington would be crazy to bust up or otherwise clip the wings one of the nation’s best and brightest players in these critical industries of the future.
President Trump and Sen. Sanders claim Amazon is too large misses the bigger picture. Any attempt to apply antitrust rules won’t wash — even in retailing its market share is too small and its fierce competitive spirit has lowered prices through greater efficiency. It gives other big companies fits — in industries where they enjoyed the advantages of incumbency — because it’s nimbler and just plain smarter.
If Amazon is too big, then it’s because America is becoming too small — or at least its leaders too small-minded.
• Peter Morici is an economist and business professor at the University of Maryland, and a national columnist.
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