Rich Executives Are No More Our Enemies Than Small Business Owners

Jeff Bezos is no more our enemy than the small business owner next door.

Can you imagine making $6 billion in the space of 20 minutes? Amazon CEO Jeff Bezos did just that back in April 2016 as shares rose in the face of a positive earnings report. At present, his total net worth towers at around $160 billion. When you’re measuring in the hundreds of billions, such wealth becomes nearly impossible to comprehend.

Yet, with the persistence of material deprivation in many parts of the United States, the tremendous wealth men such as Bezos enjoy paints something of a target on their backs for many progressive politicians. It is through their pursuits that “corporation” has become one of the most loaded terms in our political vocabulary.

Sanders's attacks have become more explicit with the introduction of a new piece of legislation called the Stop BEZOS' Act.

To pick a notable example, Bernie Sanders was able to give Hillary Clinton a credible scare on her way to the 2016 Democratic nomination with his shrewd critique of large companies and the “one percent.” Recently, his attacks have become more explicit with the introduction of a new piece of legislation called the Stop BEZOS' Act at the start of September 2018.

Winners and Losers?

These efforts and others like them raise animosity towards large corporations by emphasizing an apparent zero-sum conflict between the interests of companies and their consumers. But this could not be further from the truth.

In a free enterprise system, or even in those that approximate it, transactions are voluntary. If the relationship between consumers and Amazon were strictly zero-sum they would not trade, and Amazon would not be a viable business. It is the fact that the service Amazon provides is mutually beneficial that allows it to exist.

It is the success of companies such as Amazon that improves our lives.

Ask yourself: Why is life better now than it was in 1900? What is it that has allowed our material living conditions to be so much better? Or our technology so much more efficient? It certainly wasn’t government decree.

It is the success of companies such as Amazon that improves our lives. Our interests are, to an extent, intertwined, and Amazon does not even form a particularly cogent example. Take, for instance, Microsoft or Google.

According to Microsoft, there are nearly seven hundred million PCs in the world running Windows 10 alone. There are over two billion confirmed Android devices in operation. It’s hard to describe lucidly the improvements this has made to the lives of so many people around the world, even when one excludes strictly personal cases. Consider the growth it has stimulated, the enterprise it has unlocked. How would the global economy look if personal computing had never been brought to the masses?

Jeff Bezos may not be a saint, nor Bill Gates, but they’re certainly not our enemies, either.

Microsoft has spread near unlimited information to the fingertips of hundreds of millions, including the ability to instantly communicate across the globe, perform complex calculations in split seconds, and much more. There are whole sectors of the economy, entire areas of wealth creation that have been made possible by the success of companies like Microsoft and Google.

One of these is, of course, Amazon, which now sells millions of goods at competitive prices and ships to over one hundred countries. In doing so, they employ 566,000 people. Jeff Bezos may not be a saint, nor Bill Gates, but they’re certainly not our enemies, either.

The Small Business Paradox

Nonetheless, some do believe this to be the case. During a town hall event in late 2016, Bernie Sanders stated:

I think we should support small business… but I am not supportive of large multinational corporations that make billions a year in profit and don’t pay a nickel in taxes.

At first glance, nothing seems amiss, but in principle, what is the distinction here? Sanders is obviously conciliatory towards small businesses—but not their larger cousins. This raises the question: at what point does a small business grow to become an evil corporation?

Sanders does provide one condition: Tax avoidance, and there is some truth in his concerns. In 2017, Amazon paid exactly nothing in federal income tax. Given the United States is losing about $188 billion dollars to tax avoidance annually, this is undoubtedly a problem.

But would anybody honestly expect small business owners to act differently if they were in the position of Jeff Bezos? They are driven by exactly the same motivations and make use of exactly the same mechanisms to pursue exactly the same ends. Bezos is simply more successful and operates on a larger scale.

It is not actions that define our view of companies such as Amazon. It is their success.

What we are asking, then, is to—within an economic framework driven primarily by self-interest—have business owners temporarily and voluntarily suspend the very impulses that made them successful for the convenience of the IRS.

It would have to be profound naivety or a masterful act of self-deception to believe any business owner, large or small, would act in this way. Therein lies the true distinction. It is not actions that define our view of companies such as Amazon. It is their success.

We want businesses to be successful, just not so successful that they grow into multinational corporations. We want producers to make good products, but not get too good lest they expand into a large company. This is the small business paradox.

Once we set aside this paradox, it’s clear to see that there really are only two types of businesses. Those that succeed and those that fail. Jeff Bezos is no more our enemy than the small business owner next door.