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It seems to me looking across (modern) history that the biggest threat to monopoly is government intervention. It certainly seems true in present times when you have many politicians on the left clamoring for raised taxes on the rich, as they have pretty much consistently since the beginning of the 20th century.

In The Affluent Society Galbraith points out that when he's writing (1970's) this kind of pitchfork-and-torches thinking has ebbed, but now in 2022 it seems to be back as both inequality has truly increased and the rich are making ever greater shows of their wealth. Like by going into space or owning yachts so big you have to request local bridges be dismantled to accommodate them.

To this end, wouldn't it make sense for corporations like Amazon and Starbucks, with massive profits and incredibly wealth CEO's, to at least appear to "share the wealth" and go along with, rather than prevent, the unionization of their workforces?

I get the whole "labor vs. capital" thing, but with so much excess in the system, doesn't the short-term support of higher wages and unions protect the people at the top from the very types of things that might promote government action against their considerable market advantages? It seems it would be a pittance to pay the workers at Amazon considerably higher wages and there would be considerable benefits to be reaped besides, in terms of a more quality workforce, greater customer appeal, and a lessing of calls for greater scrutiny and taxation.

I'm asking from an economic and not political point of view. If you're about to type a reply with the word "Marxism" in it you're probably not hearing my question.

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  • $\begingroup$ Basically you are asking why Jeff Bezos doesn't give us all some free money in order to prevent... people from begging for him to give us all some free money? Did I understand that right? $\endgroup$
    – user253751
    Aug 5 at 18:39
  • $\begingroup$ @user253751 I think you're saying "Marxism" without using the word. Where do I say Jeff Bezos should give us all free money? We are certainly not all Amazon employees, for starters. So no, no you're not understanding that right. $\endgroup$
    – Raydot
    Aug 5 at 20:47
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    $\begingroup$ let me fix it then: Basically you are asking why Jeff Bezos doesn't give Amazon workers more money in order to prevent... people from begging for him to give Amazon workers more money? Did I understand that right? $\endgroup$
    – user253751
    Aug 5 at 20:58
  • $\begingroup$ Nope, you still haven't pointed out where I say anyone is "begging." $\endgroup$
    – Raydot
    Aug 5 at 21:03
  • $\begingroup$ hence "basically". Third try: Basically you are asking why Jeff Bezos doesn't give Amazon workers more money in order to prevent... Amazon workers from forcing him to give them more money? Did I understand that right? $\endgroup$
    – user253751
    Aug 5 at 21:06

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To this end, wouldn't it make sense for corporations like Amazon and Starbucks, with massive profits and incredibly wealth CEO's, to at least appear to "share the wealth" and go along with, rather than prevent, the unionization of their workforces?

If it would make sense companies would already do it. Companies are profit seeking, but generally they are not malicious for sake of maliciousness. For example, Google reportedly provides excellent workplace for their IT staff and engineers (see business insider). There are no regulations that force Google to go so far to provide such extraordinary excellent working environment.

Clearly, Google does it for its self interest. IT specialists and engineers have high bargaining power, whereas low skill workforce that Amazon relies on has likely little to no barging power. Hence it is likely not in Amazon interest to do anything about their working conditions.

As previously said firms are not malicious but they are not benevolent either. Amazon likely believes that likelihood of government involvement is low, and that their workers would have hard time to effectively organize. Firms also can’t know future with 100% certainty, but clearly Amazon expects that its policy is to its benefit ex ante.

In cases like this where workers have low bargaining power some government intervention might be necessary provided that people want to rise working standards of the workers.

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  • $\begingroup$ So I think what you're saying ("if it made sense companies would already do it") makes sense in the short term, but I think my question is more about the long term. I do like the part where you say "Amazon likely believes that likelihood of government involvement is low," though, so this could be the answer. Let me see what others might have to say. $\endgroup$
    – Raydot
    Aug 5 at 20:52
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    $\begingroup$ @Raydot well the same thing holds in long term. Especially companies like amazon that are owned by founder are not short run oriented. When some corporations are short run oriented that usually results from principal agent problem. Shareholders (principals) want to maximize shareholder value but CEO (agent) wants to maximize their own pay (value of their stock options), and due to information asymmetry (stockholders don’t see inside the company like CEO) some CEOs can be quite shortermist or misuse company (like Disney former CEO bob iger using Disney to support their goals of becoming dem $\endgroup$
    – 1muflon1
    Aug 5 at 21:13
  • $\begingroup$ Political nominee. However, in cases such as amazon there is no reason for CEO to be short term oriented since bezos owns very large stake in amazon and plus it’s his brain child (in these cases CEOs typically exhibit empire building behavior which makes them care about business even more than regular owner would). Hence from Bezos’s side it has to be calculated decision and given his priors and knowledge of various probabilities involved it should be ex ante to the benefit of amazon. Whether it’s to the benefit ex post only time can tell $\endgroup$
    – 1muflon1
    Aug 5 at 21:17
  • $\begingroup$ you have completely grasped my question, and I should have added in the founder part since I'm clearly considering companies where this is indeed the case. It seems good behavior would be the ultimate hedge...but then again no one thinks they're the a******. $\endgroup$
    – Raydot
    Aug 6 at 0:56
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    $\begingroup$ he was indeed. What I'm saying is "shareholder capitalism" is one point of view, but many people take it as gospel. I don't think anyone has necessarily proven it's the best or only way to run corporations. $\endgroup$
    – Raydot
    Aug 6 at 15:54

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