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> He threw that away to take a massive personal risk to build Amazon. Would he have done that if you capped his potential reward at $10mm?

The unexamined premise of this question is that society at large benefits from the existence of Amazon and should want to encourage the creation of similar Amazon-like enterprises.






> The unexamined premise of this question is that society at large benefits from the existence of Amazon

It's not actually a premise, though. The point is that there are good ideas that take large personal risk and investment to build. Swap in Google if you prefer, or any other successful company.

That being said, Amazon is pretty clearly enormously beneficial. AWS alone has enabled thousands of companies that never would otherwise have been able to exist, and saved other companies millions of dollars on hardware, not to mention saving electricity (by better utilization), etc.

Every time a company gets big people whine and then vote with their dollars by shopping there anyway. Why do they do that? Because it benefits them. People buy things from Amazon because it's better. Amazon makes a profit that is smaller than that value delta - the residual is the consumer surplus, aka the net benefit to you and me.


> Swap in Google if you prefer, or any other successful company.

The unexamined assumption in this statement is that giant multinational megacorporations are good and we should encourage them.

I reject the assumption in your last paragraph that individuals making their own self-interested choices always maximizes positive outcomes for society at large: https://en.wikipedia.org/wiki/Tyranny_of_small_decisions


> The unexamined assumption in this statement is that giant multinational megacorporations are good and we should encourage them.

There is no unexamined assumption. Swap in whatever you want.

> I reject the assumption in your last paragraph that individuals making their own self-interested choices always maximizes positive outcomes for society at large: https://en.wikipedia.org/wiki/Tyranny_of_small_decisions

I don't disagree. But the default assumption always ought to be that it indeed does maximize utility, because it usually does, or approximately does. If you want to make the case that there's some better pareto-optimal equilibrium that Google and Amazon are disrupting, i'm more than happy to listen, but I think you're going to find that case a lot harder to make than you think.


Exactly. I would argue that the existence of giant, monopolistic companies like Amazon leads to increased income inequality and social instability. We shouldn't be figuring out how to order our economy to make more Amazons, we should be trying to reduce the harm of the current ones with stronger employee protections, stronger consumer protections and stronger anti-trust enforcement.



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