Americans love to believe that with hard work, determination, and a bit of brains, anyone can be successful and rich. Like Bill Gates. Or Jeff Bezos, the owner of Amazon.com. Or Jim Barksdale, the former CEO of Netscape.
This belief in this myth of equal opportunity is one of the reasons that America, of the industrialized nations, is the harshest on the poor. It’s your own fault. If you had only worked harder and studied harder and saved your money, you could have been successful. See—look at Bill Gates! Look at Jeff Bezos! Look at Donald Trump, Paul Allen, Stephen Ballmer, Michael Dell…! They all started with nothing. They worked hard. They became rich. You can too.
Americans need to believe in this myth, or else they would feel badly about kicking people off welfare, or locking them up for twenty years for robbery or drug offenses, or executing them for murder. We don’t care about your disadvantaged youth. We don’t care about the hopelessness of your life. We don’t care about how you have been treated by others. You broke the rules. You had a choice. You have to pay.
Time Magazine chose Jeff Bezos as its man of the year. Why? Because he is rich and successful. Time Magazine can’t imagine that Americans would want to be like someone who is smart or creative or compassionate or fair, unless this guy is really, really rich. We all want to be rich! But we don’t want to think we are greedy. And thus the myth-making begins. And because the poor have no voice in our civilization, there is no one to counteract the incredible nonsense you are going to read about Jeff Bezos in Time Magazine.
This is the Time Magazine version of Jeff Bezos: a young man with amazing talent works hard to develop his skills. He is rewarded with good jobs, through which he hones his already impressive managerial abilities. He notices the internet (well after the really smart people did). He has a brilliant idea (an idea that isn’t really new). He convinces people to invest in his idea (using connections he already had). He pushes his idea forward with passion and intelligence (other people’s passion and intelligence). He demonstrates brilliant leadership (he bullies his employees).
Suddenly, bingo, he is filthy rich.
He is worth about $24 billion dollars right now. I’m not kidding. And to emphasize that he has earned every penny of this obscene amount of money and that he deserves all this fabulous wealth, Time Magazine includes pictures of Bezos rushing here and there, leading meetings, shouting at people, jumping up and down—what a busy, industrious man! He leads a meeting at which people toss out ideas. Brainstorming! Bezos selects the great ones and puts them into practice. Wow! What a genius! He deserves every penny of that fortune!
What Time Magazine doesn’t want you to believe is that Jeff Bezos got rich because he was already rich or because he was lucky or, heaven forbid, because he was possessed of an overwhelming lust for wealth. In other words, the difference between you and me and Jeff Bezos is not that he has money and we don’t. And it’s not that Jeff Bezos knows powerful people who help him out at every turn and we don’t. And it’s not that Jeff Bezos is just plain lucky and we’re not. The difference, according to Time, is that he is more virtuous than we are. That’s why he has $24 billion dollars and we have big balances on our Visa cards. And an economic system that creates men like Bezos, and Gates, and Michael Eisner, and Mike Tyson, and Michael Jordan, and so on and so on, is good, because it rewards virtue.
Uh… scratch Mike Tyson.
Now the truth is a little different from the gospel according to Time Magazine. The truth is that, yes, Jeff Bezos works hard, and yes, he is smart. But there are lots of hard-working, smart people out there, and they aren’t as rich or famous as Jeff Bezos. So why is he different? He didn’t think up the idea of doing commerce on the internet, and he certainly didn’t think up the internet, and he certainly didn’t write the software that handles orders for his company. But he did have friends with lots of money to invest. In other words, he had rich friends, and his family was well-to-do, or he wouldn’t have had any rich friends. And these rich friends are richer today because they were already rich. And the truth is that he was also just plain lucky. He started his business at the right time. He received favorable publicity at the right time. He has investors who are willing to put up with a pile of losses for a long time on the somewhat irrational faith that Amazon.com will eventually make money. And he has a host of people mad with investment fever who really think they’re going to cash in big-time on this Amazon.com property.
And those people may be in for a very rude surprise. I’ll get back to that in a minute.
This is the truth about most “self-made” men and women. The first thing they do, when they hit the jackpot, is attribute their success to the qualities in themselves that are perceived to be “virtuous”, like hard work and dedication. They look back at their lives and suddenly everything they did seems to have been consciously directed towards the spectacular result. It must be very, very hard for a very rich person to not believe that he or she deserves success, just as it is very, very hard for a poor person to believe that he or she deserves to be poor. [I just read an article about Lottery winners that said the same thing; furthermore, it highlighted the fact that people who were suing the winners because they weren’t in the pool the particular week they won, also have that same sense of entitlement. 2011-02]
The funny thing is that Amazon.com is not really successful at all. It lost $350 million last year. It does not look like it is going to make a profit anytime soon. So why is Bezos considered a success? Because the stock market thinks that most people think that Amazon.com is going to be wildly successful, so Amazon’s stock keeps rising, making his initial investors very, very rich.
[2022-04-12: I was wrong about Amazon not being successful, though it is somewhat more complicated than simple profitability. Amazon churns through an unbelievable volume of purchases while it’s actual net profitability at any given instant is questionable. It doesn’t matter, and I didn’t foresee that net profitability would not matter in the way that it doesn’t today.]
It is quite possible that Amazon’s stock will completely collapse next year. It is quite possible that Amazon will never make a penny. But Jeff Bezos will be very, very rich no matter what happens. When a company collapses, the workers lose their jobs and frequently their pensions and insurance and often even their back pay. The top executives drive off in their limos to “new opportunities” with big fat golden parachutes in their pockets.
If you look at the wildly rich entrepreneurs of the past twenty years, you will find that not a single one of them actually had the genius to invent the device or process that made them rich. The people who did have that kind of genius—real genius—are still working for a living, teaching, or inventing, or researching. And when you read about them, you quickly realize that they were driven by a desire to know, to learn, to improve things. Who is Tim Berners-Lee? Who is Gary Kildall? You don’t know? They made Jim Barksdale and Bill Gates rich. Ah… .now you see. They were the real geniuses. They had ideas. They made them work. Then someone else with more money and the determination to make more money came along and cashed in. I don’t mind if you think Jeff Bezos or Bill Gates is smart because they made a lot of money. However, I think it is really disgusting when they start trying to credit for things they have no right to claim the credit for, and when we begin to explain their success as the product of inventiveness or virtue rather than acquisitiveness.
They were driven by a desire to make a pile of money. They put all their energies and intelligence into the idea of making money. They knew how to negotiate deals that were more beneficial to themselves than to their partners. They knew how to drive employees to work hard for modest pay. They knew how to drive competition out business.
Bill Gates is the classic case here. As the Department of Justice investigation has shown, Microsoft cheated and lied and bullied and extorted it’s way to the top. None of Microsoft’s products were really very good at all. DOS 1? DOS 2? DOS 3.0, 3.1, 3.2, or 3.3? Heaven help us—DOS 4! (DOS 5.0 was okay, if five years behind the Mac). Windows 3.0? Give me a break! Windows 3.1? Garbage. Even Windows 95 and Windows 98 are still full of bugs. Internet Explorer and Outlook are minefields. They can’t get it right.
But Gates was smart enough to negotiate brutal agreements with companies like Compaq, which required them to pay for a copy of Windows for every computer they sold regardless of whether the purchaser wanted Windows or not. Brilliant! And illegal. Would you please deduct $24 million from your $500 in profits? Thank you– now don’t do it again.
And he was smart enough to change the API’s on Windows 3.1 so Word Perfect for Windows would crash and Lotus 1-2-3 would choke. He was smart enough to realize that by “giving” away Internet Explorer for the moment, he could drive the only competition for the most important market of the next 25 years out of business: Netscape. That is called “dumping”. It is usually illegal.
And Jeff Bezos was smart enough to realize that he could make his prices very attractive and then whack people with “shipping and handling” charges. Smart move.
And Time Magazine, which can conceive of no higher purpose for the Internet than to shop on-line, chooses him as “man of the year”.
Will Amazon be a big success five years from now? Consider these factors.
Bezos says he plans to expand Amazon’s offerings to all kinds of products other than books. All of these products will require extensive delivery services. I’ve never liked delivery services. I think there is a ceiling here. Someone has to be home to receive the deliveries, if it’s something that doesn’t fit into your mailbox. And if all the items ordered are not ready on time, you have to make two, or three deliveries, or delay the order. Orders also tend to get mixed up– we don’t pay delivery boys very much and can’t expect much better from them. I still think we are society of people who drive their cars around and pick up things. I don’t think we want to have everything delivered. The next genius will think of way to reduce the cost of driving around.
[Again, I was wrong. I didn’t foresee that it would be cheaper for Amazon to abandon products on your doorstep and suck up the losses from theft and misadventure than it would be to make sure someone actually received the package and signed for it. My bad.]
IBM and other companies are working on a electronic paper, that can receive books electronically via the internet. Music is already changing to a format that doesn’t require a delivery: MP3. Maybe that’s why Amazon is diversifying as quickly as they can.
Amazon’s service charges are outrageous. They are brutal. Time didn’t mention anything about that! [Amazon has since modified their service charges so that many products can be delivered “free”.]
But, hey, if you think other people believe that Amazon is going to make a pile of money, you might be wise to invest in it.
