Amazon stocks have seen an increase during this COVID pandemic. More and more households moved to the online shopping experience as physical stores got hit severely. As an avid shopper, I have shopped 100 times within the past 4-5 months to avoid line ups.
This is going to be the trend for some time until we find a vaccine for COVID.
The growth of Amazon and its dominance in the market pose a big question” Is it true Capitalism?” Should there be a monopoly, and what can this do to the small players? Can we have real competition when the big players have held on a big chunk of the market? As an economics student, this dominance over the goods and services market has raised many questions in my mind. Past few weeks I have been scooping articles on capitalism and economics. Here I share with some glimpses but my question remains unanswered….maybe with passing years, the mystery will get unfolded!
As the single provider of a product or service, monopolies face minimal competition and no price restrictions. Monopolistic companies use patents, mergers, and acquisitions to acquire industry dominance and block market entry. If left uncontrolled and unregulated, monopolies can negatively affect businesses, consumers, and even the economy.
“One of the greatest characteristics about capitalism and the free-enterprise system is that it grants rewards for inventiveness, creativity, entrepreneurship, hard work, and productivity.” as cited in the London Free press.
A free-enterprise system where the rich get richer and the mediocre get ruined is not a sound, ethical system.
The competitive free-enterprise policies of Capitalism can also seem unfair to those who end up weak and disadvantaged.
There is no question that Capitalism has been the most successful economic system the world has ever seen. It has helped lift billions of people out of poverty, and it has helped enhance the wealth, health, and education of people around the world. Capitalism enables competition, innovation, and choice,” Jamie Dimon on wealth equality as cited in CNBC.
Also, Amazon has allowed small entrepreneurs to dream and make it big, using the sales channel. But isn’t it a win-win situation for Amazon? I admire Jeff Bezos and follow each of his principles in the real world. From follower to frequent buyer on amazon, it is my case study for many business attributes.
However, AS an economics graduate, equating business with economics will always be my challenge!
My question remains, ” Can Amazon’s success be categorized as true Capitalism”?
Also, read my favourite article on this!
