Today’s links Amazon’s financial shell game let it create an “impossible” monopoly: If you think the company’s profits come from AWS, you’ve been suckered, too. Hey look at this: Delights to delectate. This day in history: 2009, 2014, 2019 Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading Amazon’s financial shell game let it create an “impossible” monopoly (permalink) For the pro-monopoly crowd that absolutely dominated antitrust law from the Carter administration until 2020, Amazon presents a genuinely puzzling paradox: the company’s monopoly power was never supposed to emerge, and if it did, it should have crumbled immediately. Pro-monopoly economists embody Ely Devons’s famous aphorism that “If economists wished to study the horse, they wouldn’t go and look at horses. They’d sit in their studies and say to themselves, ‘What would I do if I were a horse?’”: https://pluralistic.net/2022/10/27/economism/#what-would-i-do-if-i-were-a-horse Rather than using the way the world actually works as their starting point for how to think about it, they build elaborate models out of abstract principles like “rational actors.” The resulting mathematical models are so abstractly elegant that it’s easy to forget that they’re just imaginative exercises, disconnected from reality: https://pluralistic.net/2023/04/03/all-models-are-wrong/#some-are-useful These models predicted that it would be impossible for Amazon to attain monopoly power. Even if they became a monopoly – in the sense of dominating sales of various kinds of goods – the company still wouldn’t get monopoly power. For example, if Amazon tried to take over a category by selling goods below cost (“predatory pricing”), then…Pluralistic: Amazon's financial shell game let it create an "impossible" monopoly (01 Mar 2024)