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Thursday, October 8, 2015

How Amazon Made Me Place 2,419 Orders

Whose Agenda Is Amazon Really Pushing?

The last time I called customer service at Amazon, I was greeted by a cheerful employee who said, “Thank you for being a loyal Amazon customer. You have placed 2,419 orders with Amazon. How can I help you?”

My jaw dropped: 2,419 orders? I have been shopping at Amazon since 1997, but who knew then how Amazon would change our shopping habits?

My initial orders were for books, but Amazon anticipated that I and other consumers would be open to shopping for others things, too. Over the years, I’ve also bought televisions, computers, electric shavers, printer ink, shoes, food, and many other items from Amazon.

In Human Action, Ludwig von Mises writes,

The ultimate source of profits is always the foresight of future conditions. Those who succeeded better than others in anticipating future events and in adjusting their activities to the future state of the market reap profits because they are in a position to satisfy the most urgent needs of the public.

Amazon has saved me a lot of money. It has saved me hours of shopping time, gasoline, and wear and tear on my car. As crowded as roads are in urban areas, the growth of online shopping has made them less crowded, reducing automobile emissions. Perhaps I have avoided car accidents by shopping from home.

What is the secret behind the success of companies that serve consumers better than others? Perhaps it is empathy.

Because of Amazon, my light-selling book, The Inner-Work of Leadership,will be available indefinitely even if it sells only a couple of hundred copies a year. Had I to rely on traditional brick-and-mortar bookstores, my book would have long since become unavailable.

Amazon acts as the world’s largest marketplace for goods produced all over the world. Its customer service representatives are frequently located overseas, providing good jobs in counties such as India. Trade increases living standards around the world.

Why is Amazon able to meet my needs so well? What is the secret behind the success of companies that serve consumers better than others? Perhaps it is empathy.

As Amazon relentlessly improved customers’ shopping experience faster than its competitors did, it became the leader in Internet retailing. Its success is built on seeing the world as its consumers do; fulfilling others’ most urgent needs takes empathy.

Amazon is not the only company that understands and fosters widespread empathy in its organization. In his fascinating book Wired to Care, CEO Dev Patnaik peers into many companies and argues that success in today’s economy “requires them to leave their own agendas behind, and actually care about how other people see the world.”

Patnaik explains that empathetic organizations innovate faster:

When people in an organization have an implicit understanding of the world around them, they make a thousand better decisions every day. They’re able to see new opportunities faster than companies that rely on secondhand information. And they spend less time and money arguing about things that should be intuitively obvious. Empathy drives growth because it tells an organization what’s valuable to the people outside its walls.

Geoff Colvin, Fortune’s senior editor, argues that empathy is the “critical 21st-century skill” for employees. In his inspiring new book, Humans Are Underrated, he shows that as machines take over mechanical and technical tasks, the value of the ability to collaborate increases. Collaboration skills and the ability to serve consumers depend on “discerning the thoughts and feelings of others and responding appropriately.” More employers are hiring employees who have a mindset for empathy.

More empathy means more trade; more trade means more peace.

In short, capitalism promotes empathy by rewarding firms that best discern consumers’ most pressing needs, and firms need more individuals who can connect with consumers’ needs.

The case for empathy gets stronger: more empathy means more trade; more trade means more peace. Cato’s Daniel Griswold observes,

History demonstrates the peaceful influence of trade. The century of relative world peace from 1815 to 1914 was marked by a dramatic expansion of international trade, investment and human migration, illuminated by the example of Great Britain. In contrast, the rise of protectionism and the downward spiral of global trade in the 1930s aggravated the underlying hostilities that propelled Germany and Japan to make war on their neighbors.

Back to my phone call to Amazon. It was an extraordinarily ordinary call. Ordinary, because I had a simple issue and the customer service representative empowered by Amazon was able to solve it in a few minutes. Extraordinary, because we often fail to notice the billions of transactions that take place every day, that make our lives better and are powered by empathy.

  • Barry Brownstein is professor emeritus of economics and leadership at the University of Baltimore. 

    To receive Barry's essays subscribe at his Substack, Mindset Shifts.

    His essays also appear at the American Institute for Economic Research, Intellectual Takeout, Learn Liberty, The Epoch Times and many other publications. Barry’s essays have been translated into many languages, most frequently Spanish and Portuguese. He is the author of The Inner-Work of Leadership.

    Barry holds a Ph.D. in economics from Rutgers University and a B.S. in mathematical statistics from CCNY.