How Jeff Bezos Made $185 Billion and How Local Delivery Might Change That

As of this writing, Jeff Bezos has reached approximately $185 Billion in personal wealth. Meanwhile, the ongoing pandemic continues to wreak a particular havoc on the communities most tied to that system of wealth creation: “essential” workers, the uninsured, the economically unstable. This intersection, between the peaks both of financialized capitalism and of the neoliberal social agenda, offers one of the most astute referendum on value in our recent past. The zero-sum game between the creation of financial value and the distribution of that value in the economy has been reveled in a time of crisis to be heavily slated towards one side. The question though: where is the point of failure? Who exactly can be implicated in these structures?

Beneath the surface of Jeff Bezos’ net worth lies a deeper conflict which is more intricately linked to the underlying structure of our present system. The critical error has been the association we make between financialized capital and material capital, the likes of which dominated industry in the previous century. Material capital was material value, manufactured to achieve some new constructive use on the planet. In that world, the judgements made about those goods were rooted in some abstract conceptualization of its probable value given some material consequence. Utility was more easily defined. Financialization, contrary to what many believe, actually democratizes (or perhaps humanizes) this process by eliminating material constrictions. In the financial world, value can be placed on increasing levels of abstract measurements. At each of these levels, new logics for the transaction of financial resources can be imagined and scaled, leading to exponential growth in the forms of capital available in the world. Although this process initially took over its own internal world, the world of finance, all industries gradually became consumed with financial logics.

Jeff Bezos is the apotheotic figure in this paradigm. Amazon is a digital company, which owns a very small fraction of the material products that it releases. It operates no factories (except for its select few private label items) and mostly acts as a logistics nexus operating out of warehouses. How does one quantify the material consequences of a logistics company? The internet provides an answer through the creation of a new sort of geography on which to extract value. Scarcity in those geographies would be derived from things like network effects or first-mover advantages — these new “materials” form an economy with human attention and behavior. In this world, the materials to be extracted could be scaled infinitely within those confines. This frontier was distinctly non-geometric.

As companies grew exponentially, transforming quasi-material digital objects into transactionary value, so to did the financial instruments which had been attached to these companies. Present future value calculations took on previously unimaginable variables, and the system responded as though nothing had changed. This new logic of value is translated specifically into the stock values of these companies. With the potential for products that can engage with billions of users for trillions of numerical transactions, the shift digital supercharged the process of assigning value to certain performance parameters. The unicorn emerged.

Forbes compiles a list of the richest people on Earth, inevitably to collect advertising revenues from a platform that is owned by one of the barons of this new digital geography. This list performs a mathematical calculation on the percentage of a company that is owned by a certain person multiplied by the current price of that tranch of stock or equity. This critical error here is that those dollars are the same dollars that companies that aren’t digitally transformed, at least to the same extent and depth, have to transact in. This enmeshes the worlds, creating more and more concrete material effects on people across the globe. Amazon’s physical footprint becomes more and more tangible trough expansion and acquisition. Land prices swell as more and more physical people look for homes near its many headquarters. Housing is a distinctly non-digital infrastructure item (exception: the WFH Response) and so its effects are particularly dramatic. Finance and technology begin eating the world. Billions begin to gather in a hyper-regimented structure of digital assets and hyper-exclusive employee salaries. The game grows more unwinnable.

At the scale that these companies now operate, regulating away this structure is going to be almost impossible. Globalization has essentially eliminated the capacity for the national government to control where companies keep their money. If the government were to take a hardline stance on offshore finance and taxation, perhaps this could change, but that would require a reshuffling on the current political interests in the government. To that end, I would think the only mode of grassroots change would be voting, which is not a particularly efficient mean of affecting change. I, instead, personally subscribe to a logic of transformation in social services. Physical infrastructure needs to be re-entered through that new lens of digital geography. Meet technology companies where they are. Re-emphasize smaller scale companies that can compete within this new digital geography. What if local bookstores could deliver books faster than Amazon? Maybe in 20 minutes? Would that not offer a legitimate source of value outside of rock-bottom prices? (1) Amazon would retain its breadth, which is a niche that is alone able to justify its position as the largest technology company in the world. Local physical infrastructure just wouldn’t be devoured in the process. The two domains are made more distinct. This is a geographic approach to digital supremacy. It makes use of physical proximity.

It is a DoorDash and Postmates equivalent, except they don’t become international platforms. They stay local, hire local, build locally. I’m not sure how to ensure that this happens, but I imagine it will involve a reframing of what an “app” is — you must make it into something which has a distinct physical apparatus. Decentralization and the internet of things gestures towards this return to local infrastructure. What lacking is a psychic shift, a shift in the underlying beliefs about the system in which we all participate. There needs to be a refocusing of issues onto local infrastructure — they have an internal value system that is necessarily different from the interests of financialized technology platforms. These local institutions will need to find new modes of funding and operation, outside of the purview of growth-focused investment funds. Imagine the practicality of an accelerator, working to build companies the size of approximately one restaurant or local bookstore. This would not be the gig economy, because it would aggregate only those employed at institution itself. Billions of dollars and rounds of investor capital would not be necessary.

This is what it means to truly transform an industry. It is not simply a switch to digital tools — its the forging of new digital frontiers, those that must seriously compete with their alternatives. That is what will drive the reformation of the entire system.

(1) I imagine a UI in which users are able to see the price of the good AND the numerical difference between its price and Amazon’s price. In visualizing this number, there is a new information source from which to make a judgement of the value of an object. People make this choice all of the time when they choose to deliver a food item instead of picking it up themselves.

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Economics Student at Yale University | Trying to figure out the real cost of the modern world

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Robert Jett

Robert Jett

Economics Student at Yale University | Trying to figure out the real cost of the modern world

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