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Stossel: Why Some Capitalists Are the Worst Enemies of Capitalism

Amazon lobbies for government favors and bad regulations.

Sen. Bernie Sanders recently came up with a new business to attack: Amazon. Sanders said Amazon didn't pay its workers enough and because of that, many qualified for government assistance.

At first, Amazon CEO Jeff Bezos defended his company.

That was the right thing to do, says John Stossel. He notes: "It's not companies' fault that some workers qualify for handouts. More people would collect them if Amazon were not hiring. By creating jobs, Bezos gives workers better choices."

But the media rarely mention that. Instead, they bombarded Amazon with negative coverage.

So Bezos caved. He declared that all Amazon workers would now all be paid $15 an hour or more. That higher wage sounds good to most people, but Stossel point out that while the higher minimum is good for workers who have jobs now, it can shut out beginners.

Kelsey Holder (now Kelsey Turner) started working at age 13, for minimum wage, at Mossman's Coffee Shops and Catering Company in Bakersfield, California.

By the time Stossel interviewed her in 2010, she was making $20 an hour. She told him: "For being only 13...minimum wage was fine. If you work hard, you can make more, it's just you have to prove yourself."

The skills she learned through work—even at minimum wage—served her well. Kelsie is now the restaurant's manager. Had the minimum wage been higher when she started, she may never have gotten that opportunity.

When Amazon sets a high minimum wage at its own company, unskilled workers can still find jobs at other companies.

But Amazon did not stop there. It has also begun lobbying for the government to force all its competitors to pay a higher minimum wage too.

That could help Amazon, Stossel says: "Amazon's already replacing workers with robots. Bezos knows a higher minimum wage will hurt his competitors more than it hurts him."

Amazon often tries to get favors from government. It didn't just announce a second headquarters. It started a competition to see which politicians would give it the largest tax incentives.

"Give me a break," Stossel says. "Politicians shouldn't pander to companies, and companies shouldn't pander to politicians. I wish Bezos would stick to innovating, not scheming with politicians to get special breaks. Some of the worst enemies of capitalism are capitalists."

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The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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  • Mr. JD||

    Left-wing definition of "capitalist": A person who has capital.
    Right-wing definition of "capitalist": A person who believes in the free market.

    Conflate the two at your peril.

    As for Amazon, the American Left has long argued that by employing someone in a W2 fashion, you take on full responsibility for their well-being. This means it's your fault if they claim government handouts and your responsibility to cover their health care, education, and children's needs, plus anything else that might come up. The employer is a surrogate parent; a proxy for the nanny state. This is collectivism-by-proxy. It helps the Left shift blame for the negative consequences of collectivism - the problems are the employers' fault!

    Of course, if you hire a plumber to fix your sink, all bets are off. You are definitely not responsible for paying extra just because he has big student loans! It has to be a W2 employer so that the Left can employ Ocasio-Cortez-style deception about the employer's "ability to pay".

  • sarcasmic||

    The left considers work to be slavery. Because we must work in order to provide for ourselves, we have no choice but to get a job. If you have no choice but to work, then work is involuntary. That means having a job is involuntary servitude. That makes every worker a slave, and it means their employer owns them. It is then the responsibility of the slave owner to provide for all the needs of their workers, because the workers are the employer's property.

  • Echo Chamber||

    Thought-provoking observations. I'll ponder them over an autumnal mead

  • Architect of Liberty||

    Dilly, Dilly

  • Rev. Arthur L. Kirkland||

    Does Stossel object to freeloading churches that lobby to avoid paying for public services they consume?

  • Chipper Morning Baculum||

    All "public" services should be funded by user fees.

  • Fancylad||

    "avoid paying for public services"
    Such as?

  • Echo Chamber||

    churches don't pay property tax, so anything your community funds via property tax would fall under "such as"

  • David Bremer||

    Play that out. Churches are generally funded by its members. Its members generally live in the community. So when churches don't pay, members of the community need to pay more. Basically, the community members pay directly through their own higher property taxes than indirectly through the church.

    Granted, it does spread the cost of the church across everyone in the community, including non-members. But when these rules were put into place, nearly everyone in the community was a member of at least one church. It's also part of the reason why lots of other non-profits pay no property taxes (hospitals, charitable organizations, schools/universities, etc.).

  • Tionico||

    One more factor left out of the equation: there is hardly a church of any kind anywhere that does NOT invest a LOT in way of resources into the community. And the community gets all those benefits at no cost, other than forgoing the small amount of revenue not collected as property tax.

    Further, seniours and disabled also get property tax exemptions in most states. No one squawks about that, do they?

  • Fancylad||

    My parents church (which I used to attend), is also the local food bank, runs the Meals On Wheels program, drives seniors and disable for shopping and medical appointments, and with several other groups operate four homeless shelters. They have no restrictions on who receives help and a firm no-proselytizing policy when doing local charity. In my experience this is standard for most churches.

    But hey! Not paying property tax, that's terrible, just terrible. Maybe they should pay that $8000 a year and the city can provide those services instead.

  • Lester224||

    Maybe non-profits should pay the same taxes as all other organizations and deduct their charitable contributions.

  • creech||

    Don't now about Stossel specifically, but virtually all libs I know would say "yes." Your point is what?

  • Sevo||

    "Your point is what?"
    He's a lefty ignoramus; you expect a coherency at your peril.

  • Lost in the Woods||

    Don't expect an intelligent response from a moron

  • Lost in the Woods||

    This was for creech, not Sevo, and of course 'moron' is directed at RALK

  • D-Pizzle||

    Do you feel churches should be singled out from the other nonprofits that don't pay taxes (e.g. universities)?

  • Chipper Morning Baculum||

    The reason most capitalists seek government favors is because that is the only way to survive in this mixed economy. If you don't seek government favors, but your competitor does, you will be at a severe disadvantage.

    The reason most rich people don't criticize the government, and often defend it, is twofold. First, if you have a lot of property, you have much to lose by drawing the ire of the government. That is why most devout libertarians are rather poor. Second, if you became rich under the current regime, you most likely were the beneficiary of the regime and have a big stake in maintaining the status quo.

  • Echo Chamber||

    Every once in awhile Reason should recycle a rent-seeking primer

  • Outside the Box||

    "The reason most capitalists seek government favors is because that is the only way to survive in this mixed economy."

    Yes, this. I've worked at Amazon for 12 years and everything I've seen internally is consistent with this.

  • Fancylad||

    I think corporatism is being confused with free market capitalism here.
    Amazon, Apple, IBM, Coca-Cola, Google, Microsoft, etc. have no interest whatsoever in free and open markets. That's why their executives are natural DNC constituents.

  • ||

    I think corporatism is being confused with free market capitalism here.

    ^ This.

    "Capitalism" =/= "Free Markets," and "Capitalists" are often rather pointedly opposed to "Free Markets."

  • Outside the Box||

    I'm 99% convinced that if Bezos could push the "libertarian button" and make this country libertarian, he would. He's playing within the system as it exists but I don't think he likes it. I've worked at Amazon for 12 years and everything we do internally is about innovation and customer experience and when I've ever heard anything spoken about government, it's in the vein of "well shit we have to do this, let's get it done and get back to the business of pleasing customers."

  • DiegoF||

    I usually talk about "the free market" and "owners of capital." Talking about "capitalism" and "capitalists" is too muddled for the aforementioned and other reasons. Leave it to the centrist-authoritarians (who proudly love their "capitalism") and commies (who proudly hate it).

  • Dillinger||

    >>>It started a competition to see which politicians would give it the largest tax incentives.

    watching politicians stumble over themselves is entertaining

  • I'm Not Sure||

    As long as the government is awarding favors, people will line up to get them. You don't get kids to stop coming to your house on Halloween by continuing to hand out candy, do you?

  • Qsl||

    By that same token, if businesses have an increased tax base to offer governments by their mere presence, government will bend rules or create new ones to get that benefit.

    You can't address government-corporate collusion by simply blaming one side.

    The other takeaway is I suspect many of the Amazon employees couldn't even afford to work there without some type of supplement if their wages are that low.

    Unfortunately, increasing the minimum wage is perhaps the worst way to go about it.

  • I'm Not Sure||

    "You can't address government-corporate collusion by simply blaming one side."

    Sure you can.

    Does the government have the ability to grant favors over corporate objections? Yes.
    Do corporations have the ability to acquire government favors over government objections? No.

    The power to grant favors resides entirely with the government. If the government stopped providing them, there's nothing corporations could do about it.

  • Qsl||

    Would government risk alienating a potential source of revenue? No.

    Suppose ALL tax revenue from corporations was paid only to the feds or some outside entity. Local government could still grant favors, but there is no incentive to do so (at least monetarily).

    And even if government lacked the authority or power to grant favors (and I'd like to see the blueprint for how that would work), it's not like that type of power vacuum wouldn't be filled.

    The power to ask for favors resides entirely with the corporations. If the corporations stopped asking them, there's nothing government could do about it.

    So why is the onus strictly on one side?

  • I'm Not Sure||

    "So why is the onus strictly on one side?"

    Because of the difference between the power to ask for something and the power to provide it. You recognize that the two are not that same, right?

  • Qsl||

    And so does this same metric apply to everything, from employer-employee relations, any host of SJW concerns over power, or is it unique to government? We may have inadvertently stumbled upon a libertarian justification for institutionalized racism.

    You might consider the golden rule when assigning power differentials.

  • Sir Chips Alot||

    Qsl, you got owned, why do you keep coming back for more?

  • Sir Chips Alot||

    Qsl, you got owned, why do you keep coming back for more?

  • Pro Libertate||

    New York and DC? Mmmmm, crony capitalism.

  • Mr. JD||

    Capitalism and cronyism are antonyms.

  • Ricardo Vacilon||

    "Capitalism" appeared in the latter half of the 19th century as a word used by socialists to mean a political economy in which capital is illegitimately appropriated by some people at the expense of others. Attempting to alter the connotation of this word from deprecatory to laudatory was probably a strategic error.

  • tzx4||

    Impressive, a commentary thread on Reason that has some actual thoughtful comments.
    Just a few points:

    It is interesting to watch state and local governments trip over themselves to subsidize some mega corp to locate in their jurisdictions, even as it brings a brigade of workers so poorly paid that they turn to the government for help.

    It appears to me if Wal-mart pays so poorly that its employees receive government assistance, how is that not the taxpayers/government directly enriching one of the very wealthiest families on the planet? How does this not constitute billionaires being in reality recipients of welfare?

    It is fun to imagine winding back to the 1850's, and preventing all of the pro corporate taxes and legislation that have been allowed to bloom since then, and imagining what the economic and cultural tapestry our society would have being dominated by diverse free enterprises rather than gigantic corporations.

  • Tionico||

    You're still stuck in the stale meme from twenty years ago that has WalMart underpaying their staff so badly they're on welfare.

    Factois: whenever WalMart come in to a new market area (which they select very carefully) the overall economy in that area rises by at least fifteen percent within two years. EVERyONE in the area is doing better financially.

    Further, if someone works at minimum wage for a half-time schedule (

  • Tionico||

    Hmmm dumb thing dropped half my comment......

    if someone works at minimum wage on a half time schedule they make too much to also receive SSI or food stamps. WalMaart also hire a large number of handicapped/disabled and retired/semiretired workers, providing them with some extra cash income, and helping them find a place within their communities.

  • CE||

    So poorly paid? The average Amazon worker at the new HQ 1/2 in Virginia will make 150K.

  • Outside the Box||

    Yes, thank you, Amazon pays me quite well thanks.

  • D-Pizzle||

    tzx4: a few points to your few points.

    Why should a company pay workers more than their productivity warrants? If the Walmart employees you cite were more productive, they would be able to earn a higher wage elsewhere. That they are not indicates that they are not sufficiently productive to earn a "living wage." This is not Walmart's fault.

    If Walmart did not have these jobs available that are suitable for low productivity individuals, then those individuals would have no job whatsoever, and would require even higher levels of public assistance than they do now.

    So no, billionaires are not recipients of welfare because some of their employees require public assistance.

  • UltraModerate||

    In addition, I've long been bewildered by the way those who rail hardest against socialism are the ones who unintentionally make it look appealing.

    Paying your employees pennies while you live in an ivory tower with a golden parachute? Congratulations! You just made it easier for socialists to give a real-world example of why capitalism is not working for them!

    Stop being such a cheapskate and pay your employees enough where they can live well and be happy. You didn't do 3000 times the work of any of your employees, and you're giving leverage to the people who want to put you in front of a firing squad.

  • CE||

    Why pay people more than they're worth, just so you'll make less? The board of directors might call that incompetence, and replace you.

  • Sir Chips Alot||

    you pay people what they are worth. I am not going to pay someone who i can replace within a day with virtually no loss in productivity $100/hour.

  • Outside the Box||

    I hardly think it is Bezos' job to defeat socialism.

  • inoyu||

    sports figures who are receiving outrageous salaries should accept less so their fans can live well and be happy.

  • inoyu||

    entertainers who are receiving outrageous.....

  • CE||

    Bezos didn't cave on the minimum wage. He was already close to paying it anyway, so he made the leap for the good publicity, then cut bonuses and stock grants so he came out ahead.

    the SalesForce CEO who supported gross receipts taxes for homeless bureaucrats in San Francisco is the true enemy of capitalism.

  • CE||

    Plus Amazon isn't just replacing its own workers with robots, it's one of the biggest robotics companies out there.

  • ColinH||

    I don't know if I would call amazon capitalist anymore, along with other companies that thrive from looter subsidies, they become no better different from them. Keep up the great work Mr. Stossel! Always looking forward to your videos.

  • Sir Chips Alot||

    Amazon and other companies are simply playing the game the government created. As long as there is power to buy and be handed out, companies will play it.

  • D-Pizzle||

    To do otherwise would be an abrogation of their fiduciary duty to their shareholders.

  • Jerry B.||

    Read Bezos' newspaper for a while and you'll see how much he actually supports capitalism and free markets (not much).

  • Outside the Box||

    Bezos has no editorial input to WaPo, and his actions and tenets are extremely aligned with capitalism and free markets. I think he's basically a libertarian but is savvy enough not to admit that in public.

  • BioBehavioral_View||

    Consequences

    "The problem with socialism is socialism; the problem with capitalism is capitalists." - Milton Friedman (1912-2006)

    Recall the words of Vladimir Lenin when he supposedly said, "The capitalists will sell us the rope on Friday with which to hang them on Monday." In this instance, he knew of that which he spoke. Let us not be led down the Path to Perdition by propaganda from those in Big Business seeking only personal profit spewed via their lackeys in Big Media. -Excerpt from the new novel, Retribution Fever

    Capitalism not your cup of tea? Fine. What's your alternative? Socialism and its b*stard offspring, Communism? Let's take a look at that which the Father of Communism, Karl Marx, wrote. The following also is an excerpt from the novel, Retribution Fever:

    [Optional Note: Karl Marx is the father of Communism. His second famous literary effort was Das Kapital (1867). That volume represented the first in a trilogy and the only one published during Marx's lifetime. It is a book the basic concept of which is widely quoted, but a book relatively few have read. The basic concept? Capitalists exploit labor by stealing the "surplus-value" supposedly produced only by labor. Although acknowledging them, Marx demeans the creative and organizing behaviors of capitalists. The book is dull, repetitive, and laborious to read. More importantly, it reflects borrowed, abstract theory not scientific empiricism.]

  • Moderation4ever||

    John Stossel's criticism is on point but it also misses the point that too many of today's successful business models rely a on government subsidized workforce. There is an expectation that the government will provide subsidies for a food and shelter to underpaid workers. Now I support capitalism but why should my tax dollars support your workers, just so you can maximize profits or maintain a good share price. Amazon is not a struggling business. Businesses are often located in large urban areas with supporting infrastructure with an expectation to pay wages of a small rural community. Business not government should set wages and those wages should support their workforce. My suggestion is to rely on the free market. Support unions in your business and allow them to bargain for the wages and work condition necessary for to live and thrive in the local community.

  • Migrant Log Chipper||

    RTFA and comments, nitwit. If the unskilled worker you are talking about is paid more than what he produces that job won't be around very long and the ex worker will be living on the dole with no way to learn skills that would make him worth the government inflated wage. And he'll keep voting for Democrats, just the way they want to keep it.

  • Outside the Box||

    Amazon's lower paying jobs are in the warehouses which are almost all located in rural, low cost of living areas.

    The many jobs in expensive cities are high paying white collar jobs (I work in one and am very content, thank you very much).

  • Longtobefree||

    Bezos is not a capitalist.

    As far as the welfare goes, is there an analysis out there identifying the number of part time .vs full time workers drawing welfare? A breakdown by education/parenthood? Any facts beyond liberal name calling?

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  • jomo||

    This site inched closer to Breitbart every day. Despite all the fancy wordsmithing bu Stossel and several of the commenters above, this article and the comments (just like the Virgil article on the same topic that appeared on BB) the entire point is basically:

    People who successfully exploit the corporate/government alliance and support Trump are labeled "geniuses"

    People who successfully exploit the corporate /government alliance and don't support Trump are "out of control" and need to be stopped by big daddy government ( a fondness for which so-called conservatives develop overnight when someone perceived as liberal plays the capitalist game better than they do)

    OMG guys a "liberal" is beating us at our own game! Somebody needs to DO SOMETHING!!!

  • jomo||

    I knew this article was going to be a Bezos slam before I even read it.

    Also funny is to watch the sudden romanticizing over Walmart. For decades Walmart made all this money by:
    1. Globally sourcing products to take advantage of cheaper labor and lack of rules overseas. You know, that "globalism"we're supposed to be afraid of
    2. getting sweetheart deals from locales/municipalities, threatening to build elsewhere if local governments didn't give handouts and bend or eliminate existing regs, and
    3: Using volume sales as leverage to get manufactureres to cave on wholesale pricing, and
    4. Paying their employees jack crap.

    So Bezos beats them at the Internet version of this and he's suddenly the worst thing ever according to right wing media. Whereas Walmart is just a bunch of hard-workin 'Muricans, amirite?

    (R)'s spent decades cozying up to corporations. One guy that hates Trump does it better than his predecessors and suddenly the hard right is falling all over itself for someone to DO SOMETHING to STOP AMAZON (aka Walmart evolved).

  • BlueCollarCritic||

    If we had true capitalism IO would agree with Stossel but these Big corporations engage in every questionable and illegal action a company can from bribery to corporate welfare. Its not the small or mid-sized companies but the big dogs that abuse the system and create what is effectively croony capitalism. Stossel even did a piece on time on how the Big Cab companies use crony capitalism (licensing) to keep out competition.

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