Amazon Kills Retail Jobs – Yes, And Ain’t It Great?

We have a strange complaint about Jeff Bezos and Amazon here – that the company kills retail jobs by being more efficient. Well, yes, it does, that’s the very thing which makes us all richer over time, killing jobs. This is actually the great and grand economic task, to kill jobs, to reduce the amount of human labour that is required to meet any particular one of our wants or desires. The why it makes us richer is that this frees up labor to then go off and sate some other of our desires or wants. This thus is anti-economic drivel:

The death of the British high street is only making Jeff Bezos richer

Sure. But it’s also making all of us richer. Precisely because it’s killing off all those High Street retail jobs:

For those who argue that Bezos’s empire has grown too powerful, he has a powerful response: people love Amazon. Bezos has industrialised instant gratification and we cannot get enough of it. But it has come at a cost. The retail industry is Britain’s largest source of private sector jobs. A spate of collapses in the first half of 2018 — including Toys R Us, Poundworld and Maplin Electronics — contributed to 85,000 workers being left without a job. HMV collapsed days after Christmas last month with more chains expected to follow. The Centre for Retail Research estimates that 164,100 retail jobs will be lost this year.

We desire retail services. We also have a scarce resource to provide them. Of course, all economic resources are scarce, that’s the definition of them. If it’s not scarce then it’s not an economic resource. And human labour is indeed an economic resources, it’s scarce. There are 7 billion of us out here but we still can’t supply everything to everyone that can be done with human labour. Some things – say, tending to the elderly – are not done or done skimpily because we’ve just not got enough hands to do it.

So, along comes a new technology to supply those retail services. Amazon is indeed exactly such a technology. The complaint is that Amazon uses less human labour to provide those retail services. Excellent, isn’t it? That means that we’ve now freed up some of the human workforce that used to provide retail services to tend to the elderly. We’re richer by whatever value we put on the elderly being tended to.

Or, of course, whatever else it is that those former shop clerks now go and do. Ballet, teaching, bashing tin perhaps. We’ve skimped on a scarce resource in sating one human desire meaning we’ve the resources to sate another.

Amazon kills jobs, it most surely does, and ain’t it absolutely grand?

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Tim Almond
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Tim Almond

It isn’t Bezos, it’s the web. I have a friend who was running a bike parts company out of a warehouse. He only stopped doing it because Amazon started doing marketplace selling and it stopped being particularly profitable. Amazon is the logical conclusion for certain sorts of goods. If it’s non-tactile, not going to leak, doesn’t need refrigeration or special handling or advice, it’s just a box in a bin in a warehouse. Why not have one or two giants selling all that stuff? The upside is that actually, we’re getting more artisans back where we want artisans. If the… Read more »

Matt Ryan
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Matt Ryan

Maplin’s is a good example of this. They used to stock items hobbyist’s wanted and found hard to buy other ways (yes, mail order, but that doesn’t get you a part on Sunday afternoon). The web made this easier but you still couldn’t get the part via a web order on a Sunday.

However, Maplin’s went chasing a market that was even more competitive – electronic goods. A better strategy might have been to downsize and move to less popular retail locations but still sell the hobbyist stuff.

That and various buyouts saddling the company with very large debts.

Jonathan Harston
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Jonathan Harston

Case in point, just yesterday I needed a right-angle IDE/CF adapter to squeeze into a small case. In the 1980s I’d have been able to pop into Maplin and either buy one or buy the bits (yes, pre-IDE/CF years, but in essense). By the 2000s asking for a “40-pin IDE box header” was met with blank stares and nothing in the catalog. Yesterday, 30 minutes on the web found the part I need via an Amazon trader. My saviour in sourcing parts nowadays is that RS/Farnell/CPC sell retail and you don’t need a trader account. In the 1980s I occassionally… Read more »

Quentin Vole
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Quentin Vole

“there’s probably more specialist wine shops run by people who know their claret from their Bordeaux than there’s ever been”

A pendant writes: Claret is a (British) term for any red wine from the Bordeaux region.

GR8M8S
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GR8M8S

I think Tim was being ironic…

Quentin Vole
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Quentin Vole

Possibly. I’ll reset my irony detector.

Matt Ryan
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Matt Ryan
Matt Ryan
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Matt Ryan
Quentin Vole
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Quentin Vole

Possibly. I’ll reset my irony detector.

Rhoda Klapp
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Rhoda Klapp

Chains of shops have always gone bust. Who did we blame for Rumbelow’s, or Woolworth’s going belly up? The reason, maybe the only reason, is that they were bad shops.

TD
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TD

“The why it makes us richer is that this frees up labor to then go off and sate some other of our desires or wants.” Of course, you also want a regulatory environment that allows people to experiment and see where else they could productively put that labor to work. Instead, we’ve got people hopping mad that someone thought up stuff like Uber, AirBnB or Amazon, and they want all this disruptive innovation stopped. Just because people want to buy it is no reason to let them have it until it has been vetted and approved – imagine subjecting every… Read more »

Nachum Sash
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Nachum Sash

This article assumes that there is a scarcity of labor. The opposite is in fact true-there are many people that can’t get a job, hence the unemployment rate. Increasing the amount of labor will just increase the amount of unemployement.

Quentin Vole
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Quentin Vole

The UK has a labour shortage:
https://www.bbc.co.uk/news/business-45181079

Agammamon
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Agammamon

Bezos has industrialised instant gratification and we cannot get enough of it.

I’m not sure I understand these people. I go to the *shop* for ‘instant gratification’ – because I can get what I want immediately at the store. I go to Amazon for stuff I’m willing to wait for – because its a couple days to a couple weeks to get it shipped.

Amazon is the *opposite* of ‘instant gratification.

Agammamon
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Agammamon

Bezos has industrialised instant gratification and we cannot get enough of it.

Amazon is the opposite of instant gratification. You order something and have to wait for it to be delivered.

The local shop is instant gratification because I can just go down there and get it immediately.

I just don’t understand these modern writers.

Shadeburst
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Shadeburst

And here we have AI costing jobs. Not just any jobs either. These aren’t lawyers and accountants and rocket surgeons. These are first rung of the ladder jobs and their disappearance makes it more difficult to get a job at all. It’s not just the business model but the food chain that is being disrupted.