Amazon Versus Hachette: Books Under Fire · 9:00pm Jun 17th, 2014
Hoo boy. This is a hot topic among authors and publishers right now. Hot enough that there've been little flame wars spouting up around the internet about it. So, I figured that as someone who has a hand in this battle (and I admit, on one side, not the other), I should weigh in. After all, I have a hand in the fire, albeit a very tiny one compared to most of the juggernauts weighing in. Nonetheless, I feel I might hopefully sway someone to a better understanding, or at least inspire a bit of research and digging.
So, here's the issue. Right now, Amazon.com (online retailer) and Hachette (a book publisher) are at war over pricing of books. Hachette, as a publisher, wants to raise prices again. Amazon, on the other hand, doesn't like the price increases and has declared that they won't buy Hachette's books at this price.
Seems pretty standard so far right? Buy, sell, supply and demand. Right. But here's where things get dirty.
A few weeks after the pricing debates started, people began noticing that Amazon had taken down the pre-order options for many products sold by Hachette, and began sending questioning e-mails to Amazon about it. At the same time, many people who had previously made orders to Amazon of books published by Hachette began to notice that their orders weren't being delivered.
Here's where things got crazy.
While Amazon began to try and calm it's customers, apologizing for the delay, Hachette went on the offensive. Spearheaded with news interviews by some of its publicly showcased authors like Stephen Colbert and J.K. Rowling, Hachette claimed that Amazon was deliberately withholding customer's orders that they had taken money for, delaying shipments, and refusing to allow pre-orders as strongarm tactics to try and make Hachette's brand appear weaker than other publishers. Colbert talked about it on his show, calling for a boycott on Amazon.com (one would assume until Hachette gets the terms they want) and flooded twitter with the hashtag #CutDowntheAmazon. Rowling spoke to news outlets about how unfair Amazon was being and gave interviews where she spoke about how Amazon.com was unfairly abusing its position. Numerous other high-profile authors all came out of the woodwork of Hachette and weighed in with a similar vein. The theme? That Amazon was a big, multi-billion dollar bully, and poor little Hachette is the little company being abused.
I don't buy it. First of all, Hachette? Poor and little? Selling Rowling? Wow, pardon my skepticism as I type away on an OS made by poor little Microsoft. Hachette is NOT a small publisher. A fact that's only driven home by my second observation in this matter: Hachette was one of the big five publishers that found guilty of colluding to price-fix all book prices at a high margin with Apple last year. Apple was found to be the ringleader (and has since been slammed with a fine of 800 million dollars to be divided up to everyone who bought overpriced books under the collusion, which they have appealed) who contacted the publishers, meaning they consider Hachette a big enough force to be one of the five companies they contacted to try to fix prices. And the final cherry on top is that Hachette's new prices (the one's they're trying to get Amazon to agree to buy under) are higher ... and looking at their current prices (which are already obscenely high), would put them right back in the area of their prices during the collusion.
So my take, based on that? Hachette wants those profits again, and is willing to play dirty to get them. Worse, they've stirred up public outrage against the company that's deciding not to buy at those prices to get them to buy. And when people see the new, higher prices after they publicly demand Amazon to give in, who will they blame? Hachette? Or Amazon? It's a masterful spin of publicity on Hachette's part.
As far as Amazon's take on all this, they've been fairly silent. But you know, I can see why they stopped offering pre-orders. They don't know if they're going to be selling Hachette's products anymore, so why offer orders on something you might not carry?
Even worse, internal rumblings from inside Hachette, coming from other, lesser-known authors that the delays in Amazon's shipments might no be Amazon's fault. Amazon's response e-mails indicated that the reason they'd been unable to fulfill orders and suffered delay is that Hachette's shipments hadn't arrived on time. Authors who contacted Hachette about this were politely told it was none of their business, and to stop asking. Those who dug even deeper claimed to have found evidence that Hachette was in fact delaying shipments to Amazon by having them shipped through increasingly complex delivery chains. One author claimed to have tracked a shipment of his books bound for Amazon down to a warehouse somewhere, where they were awaiting a pickup from another company that was supposed to come inside of two weeks. And they were then going to deliver it to another warehouse, not Amazon. Attempts to contact Hachette about it were stonewalled.
Clearly, I'm not neutral here. I'm siding with Amazon, based on what little digging I've done, what stories I've heard (and seen in the news), and my experiences. If Amazon really was the greedy fixer Hachette has painted them as, I doubt I'd be getting away with selling my own books at such a low cost. And given that Hachette was one of the five found guilty of collusion last year (even if they were one of the three that "settled" and sold out their compatriots, they were still in on it), I have little reason to trust them. Plus, playing themselves as a poor little company? J.K. Rowling? Colbert? Hachette's author page proudly displays authors with over 110 million copies in print. Little? Like a T-Rex has little arms. Clearly, I'm hoping this fight doesn't swing Hachette's way, and I'm proudly hashtagging my own tweets with #BurytheHachette, as a clever counter to Hachette's own #CutDowntheAmazon.
But there's more to this than just a dirty slugfest from a publisher. Hachette is fighting to set a new standard for high prices. The whole battle started over Amazon balking to buy at Hachette's new rates.
What kind of rates are we talking here? Well, yesterday, I thought about buying an e-book of Console Wars, an account of the war between Nintendo and Sega and how Sega went from sub-10% market to 51%. I say thought, because I balked at the price. The Console Wars e-book, published by HarperCollins, was $15.
On sale. That was 25% off. The full price was $20. For a digital text of 600 pages.
Now look, as an author I understand there are costs to be recouped. But $20 for an e-book? That's ridiculous. And that's a price that Amazon is willing to sell at. How much higher must Hachette be trying to go?
I can't get behind this. Even if Amazon's actions looked just as bad as Hachette's, this kind of mark-up is obscene. This is a case of a publisher being absolutely greedy. And I can't support it. The prices for books are already high, and I'm willing to bet there are a lot of places where Hachette could make cuts that wouldn't affect authors or editors in order to keep their prices at a sane level.
I'm glad I'm not signed on to work with them. If I was, you can bet I'd be doing my best to jump ship right about now.
Nice to see the Amazon-side perspective on the issue.
Also, #CutDownTheAmazon? Seriously? <.<
2214541
Well, it is clever. Colbert's a pretty clever guy, all around. I'll admit I like his show (and Stewert's).
But then again, I was pretty happy with #BurytheHachette as a rebuttal.
2214550
#BuryTheHachette is evocative of a common saying for making peace. #CutDownTheAmazon is evocative of deforestation. Not something I'd want to associate with. Just think of all those homeless monkeys
2214579
Which, in context, makes the two hashtags all the more appropriate in my eye. Hachette's "burning down" the Vashta Nerada's forests, and Amazon's trying to keep talks going and find something that keeps customers happy.
Whenever I've come across Hachette's spin on this issue, with Rowling and other mega star authors, I'm reminded of this clip from South Park.
Not personally a fan of millionaires playing the victim card. I'm surprised anyone in the general public is on the publisher's side on this; people don't usually side with the guys raising prices.
I havent bought books on amazon, but I look to amazon overall as the first good price range on anything you buy online. They give an overall good range, good options, and for me, excellent customer service (Online, thats a real feat, and a rare one.)
So to hear anyone going after amazon, the thought almost has to be because they want amazon out of the way to charge their price. Or they didn't want to play by amazons rules. (Either of them, are bad things overall.)
This whole fiasco reminds me of the napster/riaa crud that arose with music when it hit the net for sharing. Books have finally reached the point, its not profitable, on the older margins that they used to operate on. So those rich, arse, and generally douchebag ceo's that want to be happy with 6 and 7 figure incomes need a way that doesnt involve brutalizing their employee's more than they are. (Can you tell I have a certain place I'd like this figures to be sitting, id give two freebee's, and both a rope angled fulcrum and height.)
So yeah, if they charge amazon and continue the douched prices, once amazon waits enough, and then let drop the bombshell even more, because, lets face it, silence is hurting them some, but when you counter with something that destroys your opponents credibility, well, they either shut up, or put up. Either way, amazon wins, albeit bloodied some.
But yeah, theres a reason I like amazon, and when anyone tries to go after what is a profitable site for want of the dollar. That kind of old thought needs a reminder what remains a great equalizer.
I'm siding with Amazon. Looked up the issue and well, to put it plainly... Hatchet Publishing is going down a road that so many have taken in manipulation with the media.
I've been using Amazon for a long time (since it came out) and well, I have never had a major problem with it. Ya, a few glips, but they work with the customer rather well.
Amazon is not guilty of the claims made.
Hatchet is guilty for public accusations on concepts beyond their knowledge.
Ah, and all I'd seen so far was Colbert's side of the story.
I, for one, suspect them both of being evil and greedy.
That is, after all, what a corporation is required to be. Their duty is to make money for their shareholders, by whatever means necessary. If they lessen their profit margin due to sill things like morality or common sense, they're failing in their primary responsibility.
(Which is why I think the whole notion of a 'corporation' (investor owned company) needs to be abolished, replaced by employee-owned (no special name that I'm aware of) and/or customer-owned (co-op) models... but let's not make this a socio-economic/political debate.
When a company is investor owned, it is trying to please a small group of people who are entirely concerned with profitability. A company owned by its customers or its employees will have a completely different set of values, and will primarily be trying to please one of those more deserving groups.)
Actually... that gives me a fantastic idea. It would be brilliant to have a co-op style publishing house, owned by the authors who write for it. Sort of like self-publishing, but on a full industrial scale, and still with editors for quality control.
Maybe when I become a hugely popular, best-selling author (lulz), I'll have the money and sway to set something like that up.
I've got to go with Amazon on this one. I've been using their self-publishing website for years and the prices for my books have not changed one bit in cost - about $0.015 per page - which has remained affordable for ordering proofs as well as made an introduction into self-publishing easier through their system. Ordering copies is still the same as it was back in 2012 when I started going it in earnest, and their shipping of these items has always been timely and they've arrived in good condition. If a company like Hachette is trying to pull of a wounded-gazelle gambit yet still charge $20 for an e-book that could be found elsewhere for under $10 and can sell hundreds of copies of books from very large author names, that's just plain greedy.
2215284
I don't know of many in my area, but there's a lot of places that allow for printing and binding of your own books without going through publishers; you just have to sell them on your own time. I don't know how they work, though.
2215367
Well, yeah, that's your standard self-publishing... almost always turns out to not be a profitable notion for the author... though print-on-demand might have potential for changing that.
I'm talking about a pretty normal publishing house that works more or less like any other publishing house, except that instead of trying to make a profit for their shareholders, they're trying to make a profit for their authors.
2215397
Sort of like "Steam for Writers?"
2215397
That's why I like Amazon's CreateSpace; using their basic features, I can sell a book on Amazon for $6 with their system and make a profit of anywhere from $2 to $3 per copy; more than what most publishing houses do. I've already made a few hundred dollars with it, so I'm satisfied.
Granted, any additional items can be expensive, but resourceful writers can avoid these setbacks by doing them themselves.
2215284
First off, corporations are required to make money LEGALLY. If they're breaking the law, the people responsible for it should be getting put in jail.
Secondly, the idea that profit is somehow bad is borne out of an incorrect notion of what profit IS. Money represents value. If a company cuts costs 10% and thus boosts its profits, we're getting 10% more stuff "for free" as a society, as we're using our resources more efficiently. This is why automation is awesome; less labor = more stuff, which means we can work less/get more.
Thirdly, corporations are owned by people. I own a LLC. And I work for my own company. So my company IS employee owned. Indeed, the vast, vast majority of businesses are owned by someone who works for the company.
Fourthy, investors are absolutely vital. If someone has a great idea, they need money to execute on it. Investors are a very logical step - they give you money now, in the expectation of getting money later. Without investors, you simply wouldn't have an enormous number of companies, and it would mean that people with capital would have an enormous edge over those without it, as they'd be the ONLY people who could make new companies, rather than how it is now, where if you are some scientist with a great idea, you can build a company around your idea or sell it to someone else who can build a company around it. I worked for a start-up company which operated in that way - they were building their factory via funds they got from investors, who were, obviously, investing in the company with the expectation of the company making their product and selling it and giving some of the profit to them.
This is a very good thing.
The idea that investors are somehow undeserving is just silly. They are very important, as they allow these companies to exist in the first place. Without the investors, you can't build your factory to make your product. Heck, you can't pay your employees before you are making products without investors, but you NEED to pay your employees because most of THEM aren't capable of living without a paycheck for months or years. And who builds your factory without that capital?
Capitalism works the way it does for a reason.
It's nice to see another informed view on this, they are maddeningly hard to find.
2215284
So a publishing credit union?
Colbert's bit really pissed me off. It's not only crazy amounts of incorrect in it's information, it's his profits to worry about as well, corrupting the whole argument.
2215402
I have no idea how steam works, but okay.
2215714
Well, that's still more like your basic self-publishing, though an on-demand nature can alleviate much of the risk involved.
2215894
You think I don't know this?
And yet, co-ops and employee-owned businesses exist.
(And I'm not talking about 'employee owned' as in 'the owner works there' -- I'm talking about the business is owned jointly by ALL of its employees.)
Many of them are very successful, and offer better service.
Credit unions (customer-owned banks) almost always offer better customer service and better interest rates than traditional banks. When I lived in South Dakota, I was a member of an electric co-op: a power company owned by its customers, and its electricity prices were almost half what other power companies charged. One of the best grocery stores in my area (in size, selection, and customer service) is Winco: an employee-owned company. Despite treating its employees much better (obviously) it manages to undercut walmart's prices consistently.
How can they do those things? How can they offer better prices/rates than their traditional competitors while offering better service and treating people better?
Because they don't have shareholders taking a cut.
When I open a CD at the credit union, I get (nearly) all the interest; I don't have to share it with the bank's shareholders. When I pay for electricity in S. Dakota, I'm just paying for the power and the upkeep of the grid -- I'm not also lining shareholder's pockets. When I buy food at Winco, besides the food and the upkeep of the store, I'm paying their employees, not the Walton family.
As I like to say, when you deposit money at a bank, they'll use it to make a profit for their shareholders, and share as little of it with you as they can get away with. When you deposit money at a credit union, they'll use it to make a profit for you, as much as they can. Who do you want the profit to go to, the bank or yourself?
Now, investors injecting capital into an enterprise is important, especially early on. But it does NOT have to become the driving force behind the company.
Because -- you know what the best part of these co-ops and employee-owned companies is? They are NOT legally required to do anything for a profit. They're allowed to put their other stakeholders (their employees or customers) above their profit margin, and since they are there to serve their employees/customers, they often do.
Because investors aren't the only people who have a stake in a company, not the only people who care what the company does. Its employees and its customers can also be greatly affected by the company's decisions.
And I, for one, think companies that value their employees/customers over their investors are capable of treating their employees/customers far better -- and that's a good thing.
Feel free to call me a communist/socialist if you want. (Communist would be more accurate, since I'm advocating ownership by the people, not by the state.) But I stand solidly convinced that this is a better way of doing things. And the wonderful thing about it is that you can incorporate communist ideals within a capitalist system, and it works!
2216191
Heh, yes, much like a credit union... which is probably the most common customer-owned (co-op) business model in America today.
2216601
Steam is privately owned, by Gabe Newell. There are no shareholders, and no one else to have the final say in decisions. Just Gabe. This has advantages, and it has drawbacks.
In fact, the same could be said for what you've been talking about. Employee-owned businesses can work, we've seen that proven. However, at the same time the idea that because they do work means that we should also get rid of investment driven companies is a terrible idea. Companies with publicly available stock can be great things, and in many cases are. In fact, employee-owned businesses are a type of investment option, it's just that the stock is tied to your working hours and isn't publicly available.
The problem isn't that public ownership and investment is a bad idea, but that those who sometimes purchase ownership (or become CEOs) aren't in it for the company, they're in it for themselves (and this can befall any company).
This is the problem that befell Epic games with the Gears of War series. The series was supposed to be done with the third game and the lead developer had 2-3 years worth of continual DLC in mind for it. He didn't want to make another game, he wanted to make new campaigns, new game modes, and new weapons and then add them into the game over the years at low DLC rates ($15 VS $60). He was smart enough to know that it was a good decision for the gamers and the studio (the studio makes a lot more off of DLC, almost as much off one $15 piece as they do off of a $60 game sale). The investors, however, didn't see that, and wanted a new game. End of story? He got let go, and his concepts for DLC were thrown into the $60 Gears: Judgement, which tanked horribly. But the investors wanted a new game, because that would increase stock prices.
See, there's a case of it being horribly misused. Investors that are looking out for their own interests are the problem, not the system itself. Dozens of companies have come and gone on the power of public shares, and owning stocks in a wide variety of companies is a great way to earn a small quarterly income.
The wonderful thing about the free market is that you're free to try any approach. You can start a company and retain sole ownership (Valve). You can start a company and sell public ownership (Google, MS, Apple ... this is a big list). You can even start a company and make it employee owned. But with that freedom, any of these options can be abused. There's nothing from stopping a sole owner from cutting everything,closing a company and absconding with his funds. A publicly owned company can be driven by stockholders to make terrible decisions. And an employee owned company can end up heavily in debt taken from employees retirement packages due to poor decisions (or deliberate abuse) and leave the employees with no retirement, no job, and a debt to be paid by someone.
Everything has flaws. There is no magic bullet in our current world. Hachette could act in it's own interests or in the interests of the market. The only certainty I can say is that forcing them to act in one way or the other (which a lot of people these days advocate) is an even worse plan, one that that scarier still is perched above a very slippery slope.
And as dangerous as it is to touch this topic in a place I'd rather not politically charge, the only time it seems to me that a version of communism works is when everyone involved can willingly enter and leave as they please. The idea that one should share and share alike with their property is a decent one, but problems arise both once someone is given the power to determine who and what is shared and when anyone is forced to share without wanting to. This is why community-run operations work better at a small-scale: It's much easier for ten neighbors to agree to have a community garden of shared crops than it is for three-hundred people.
2216191
I like Colbert, but yeah, this is one of the cases where we find that no matter what, a media source for news will almost always have a bias somewhere. We're all allowed to act in our own interest, of course, but how many people who watch his show have the full story rather than his perspective?
2215894
Investor businesses are a great foundation of the modern economy. I agree on the whole here. I think it's important to remember that like all things, it can be abused, but the good outweighs the bad.
Now, when we start seeing Megacorps that are powerful enough to topple governments and start running countries with their own private military forces (something that's a legit problem in the book I'm working on now), then we've got problems.
2215714
What's the quality like? Because I've seen some POD books from them and not been that impressed, but those authors, for all I know have gone the cheap route. Are they equal with a standard paperback? Or not as much?
I ask mostly because of the frequent requests for physical copies of my own books and the battle with my own desire to deliver a solid, quality product.
2214749
On the whole, I've been pretty happy with Amazon as well. It doesn't mean I'm not keeping my options open, or that they couldn't do better, but Amazon's served me decently enough.
2214728
Yeah, the advent of the internet has changed a lot, and a lot of publishers are really struggling to adapt. It came up at the writing conference I was at earlier this year, and I imagine it'll continue to be a thing until those companies who can't adapt wither and are replaced by the ones who can (like Baen, which has done very well for itself and its authors in the digital age).
2216699
I was surprised with the quality when I did it. They can give you a ISBN number or you can purchase one or provide your own. They have some predesigned covers or you can select styles that allow you to upload your own cover images. The pages are either white or cream (cream tends to be slightly thicker pages), you can choose full-color or black and white (full-color costs more to print, but I've never needed more than black and white), you select a page-size and set the margins and upload it, they check to make sure everything fits and there's no glaring mistakes. If you're good at Word, you can make a professional-looking interior without their help. On cover design; I've seen a few decent ones, but it is a little cheap and it's better to upload your own images. However, I looked at my book and it looked like a professional quality book.
Sorry for being long-winded, but I figured I should let you know about some of the details at least since you're looking into using it. There's a similar POD service called Lulu, but I don't know as much about them.
EDIT: Lulu is slightly more expensive, but offers some sizes that Amazon does not.
2216699 Thats why I like places such as amazon, tiger direct, and newegg, or others, they keep prices low, because they are a household name. Those that don't know of them are the same branch of folks that are not net minded. those of the older generation. And its pretty easy to get some old person whom paper is the only medium that they will ever use, not wanting to adapt and enjoy the options available.
And thats who these places use as statistics (urgh, how to sell three lies without ever failing a polygraph) to create false social pressure on places like amazon.
2216699
Oh, then that's not what I'm talking about at all.
I'm talking about companies owned by all the employees, not companies owned by an employee.
By definition, investors care about one thing, and one thing only: return on investment.
It's not a sometimes thing, it's an always thing.
Indeed. I'm just saying that the flaws in the co-op model are incidental, while the flaws in the corporate model are fundamental.
We can debate politics in PM, if you'd prefer. I understand not wanting to muddy your blog post with it. I do love me a good political debate, though.
Another reason I love the co-op model. Participation is voluntary, and can be stopped at any time.
Yep, which is why I like (relatively) small co-op companies, rather than a national-scale communist economy. ^.^
Co-ops and employee-owned companies allow many of the benefits of communism without the downfalls we've seen communist countries fall prey to in history. What's more, they can be gradually implemented and encouraged without a revolution and without destroying the existing capitalist economy.
2216601
I hear this frequently from people who advocate such things.
I always wonder if they ever ask themselves the question, "If this is true, why is it that these companies don't dominate the marketplace?"
The answer is, of course, they aren't any better than any other business structure. Failure rates according to market studies found that employee-owned businesses and cooperatives fail at the same rate as other businesses do, and in countries where there are very high rates of employee-owned businesses due to communism and similar things, they rapidly see a degeneration of said businesses as the levels decline down to much lower levels in the capitalistic environment, suggesting that wide-spread cooperative business ventures are doomed to failure, but that they can exist at a lower level in the economy.
They don't give better service, they don't produce better products, they don't give better results than any other company structure. Some of them might, sure, but that's true of private companies as well - Disney is not employee-owned, and yet is considered to give top-notch customer service.
According to NECO, they also appear to not be as large as many other companies - the largest publicly owned company scrapes into the top 50 private employers, but the rest are well out of it, suggesting that while they exist, they make up a relatively small percentage of employers in the United States - on the order of 1%.
Depends on the credit union; it would be more accurate to say that on average they provide better interest rates.
Customer service, on the other hand, is more of a mixed bag. That's not to say that credit unions don't provide good customer service in many cases, but they can also sometimes be very inconvenient due to the fact that they are much smaller than the larger traditional banks, which can cause you some trouble on occaision (especially while travelling). I would say that convenience is an important part of customer service, and a worthy consideration.
As I noted above, they don't actually charge less, treat people better, or provide better service on average - if they did, they'd dominate the marketplace. They don't, so obviously your mental model must be flawed. So what's wrong with it?
Well, the first reason is that the shareholders do indeed take a cut. First off, "employee-owned" is a broad term - many employee -owned companies are not wholly owned by the employees, but majority owned by the employees while some outside shareholders still hold a stake in the company. Secondly, the employees, being the shareholders, obviously DO take a cut of the company's profits. Thirdly, many employee owned companies employ numerous employees who are not, in fact, shareholders - something which comes as a surprise to a lot of people.
The net result of all this is that, well, "employee owned" businesses are still giving their shareholders a cut, they just happen to have their shareholders be their employees. It may be that they distribute said income differently, but they aren't necessarily any more economically efficient than any other unit.
Fun fact: on average, electrical cooperatives actually charge MORE money than non-co-ops - on the order of 10% higher than neighboring industrially owned utilities. This isn't terribly surprising; they are much less driven to be efficient, and improvements are much more difficult to execute on, especially if they only benefit a portion of the cooperative and have high capital costs.
Of course you like to say it.
But how true is it?
The banks need to compete with each other and the credit unions. If the bank is better at investing money than the credit union is, and they can afford to pay higher wages and pull in stronger investors and use their weight better, then they may well end up providing better ROI.
If credit unions were better, always and forever, everyone would use them. But they don't.
No, but it usually is better for everyone if it does.
This is deeply misleading.
First off, all companies are required to heed their shareholders. The profit margin in the now is not, in fact, the be-all, end-all - many companies invest their profits in themselves to grow and become better. In the case of an employee-owned company, the shareholders are the employees... but that doesn't necessarily mean that they are any less concerned with profits than anyone else. Indeed, they should be, because they own the business; making more money means more money in THEIR pockets. So why wouldn't they make their business the best it can possibly be? Because that is, ultimately, what it is all about.
Second off, having people who are very good at managing a company is very important to its success. If you have someone like, say, Larry Page or Bill Gates running your company, you have an enormous advantage - your company grows as they do smart things and take your business in smart directions. Having more centralized control, people with vision, running your company helps to make it a better place and more successful. The more distributed you make your decision making, the less likely you are to make good decisions, because most people aren't very good at it.
The third problem lies in incentivization. If your company is happy making the same money, year in and year out, there's no incentive to grow your business or to change your practices. If your company is trying to grow every year, then they're innovating, trying out new things, working to make things more efficient, experimenting. Stagnation is death. And which is more likely to stagnate - an employee-owned business, or something where there are outsiders constantly pressuring you to do more?
The answer is obvious.
And yet, communism failed, and companies which are run in this manner are no more successful than other kinds of companies, and are smaller and in many cases are less economically efficient. You see huge amounts of economic growth when you switch over to more capitalistic regeimes, and when you put large numbers of said companies together in a small space, their failure rate increases rapidly.
You aren't taking into account the disadvantages of said systems. You are a true believer in them, but you have to acknowledge that reality doesn't back up your beliefs - in real life, if these companies were so much better, they would beat out the more centrally controlled companies. This is not the case. Ergo, we must conclude that on the whole, these companies are not any better than any other company.
2216699
The term "Banana republic" comes from when this happened in real life.
The thing is, this actually comes about from having a very weak economy and central government. It isn't a very likely scenario in a country like the US; we're more the sort of place which causes this to happen elsewhere. Given the generally increasing population of countries nowadays, executing this sort of thing is increasingly unlikely. Companies have little incentive to do so; they don't want to be responsible for the general welfare. Better to just make piles of money and live in a stable environment than have to worry about getting your head chopped off by dispossessed peasants.
They would beat them out on what metric? Profits?
You may be missing my whole point. It's not all about the money -- it's about what motivates the company and who controls the company's actions.
An employee-owned company will treat its employees better; a customer-owned company will treat its customers better.
An investor owned company will treat both its employees and customers horribly -- if it can get away with doing so (and thanks to government corruption and public apathy, they often can).
Also, to hit one other point... about credit unions not having nationally available branches. Ever heard of 'shared branching'? I can access my credit union's account at nearly any other credit union in the country. I've withdrawn funds from my Spokane Teacher's Credit Union from a branch of Midflorida Credit Union before. ^.^ By cooperating (don't you just love that word ^.^) with each other, these small credit unions do have a nation-wide presence.
The shared branching network is mutually beneficial to all the participating credit unions; it gives all of them a nationwide network in exchange for letting other credit unions remotely run transactions through their own branches.
(I should really stop hijacking VX's blog, though, so this will be my last post here. If anyone wants to continue this conversation, PM me.)
2216699
And it's fine to have a bias when it's clearly shown. What drove me mad was the misinformation that a simple read-through of Amazon's letter would have dispelled. Saying that Amazon told people to buy used books is false, and it falls on us to wonder: was it ignorance or malice?
2217165
I have to point out that most people don't use credit unions because they don't know they exist as the majority are very local. In my experience, once people do, they tend to prefer them to banks due to better services and few if any of those bullshit fees that banks like to add.
Also, I fail to see how a regional store who chooses to only operate in a single state or part of a state is inherently inferior to Wal-Mart just because they don't aim to take over the world. Not every business is run by people who want all that growth, the growing pains, and upkeep associated with it. The mere fact that they are happy and profitable serving their region makes them somehow less? Or am I misunderstanding your view?
2218060
Investors aren't going to force you to be terrible to your employees, the management can decide that on their own either if they think they can get away with it, they think it'll make investors happy, or both. Having investors doesn't mean you have to be a dick, it just gives you an excuse to be one.