Business & Markets

Unwoke HR: Hire Employees Based on Merit

“Woke” figurative is slang for awoken, as in waking up. In politics, it means one has awoken from their slumber to embrace “social justice.” The demonstrative response has been racist, sexist “affirmative action” hiring practices, and cancel culture.

Yet there are companies that are fighting back. One example is the cleverly named, unwoke.hr. From their website of unwoke.hr:

Unwoking work.

The modern workplace has become a hotpot for unchallenged radical thinking and left wing ideology. Our mission is to advance society based on a culture of enlightenment, beauty, truth and freedom through free market initiatives. First up – unwoking work.
Their basic principle is that hiring an employee that operative consideration should be merit, or in their words,”hiring based on skin color, ethnicity, origin, gender identity rather than merit.” According to the company:

Affirmative Action Programs (AAPs) has become the norm in recruitment. It involves the practice of hiring candidates based on arbitrary attributes such as ethnicity, gender or origin, even when far superior candidates are available. At the same time, Americans wonder why the standards in our country are falling and the Japanese, Koreans and even the Chinese are getting ahead; Affirmative Action with its toxic twins, Sufficiency and Diversity & Inclusion, is the enemy of excellence. It stands to reason that the direct consequences of AA is a culture of mediocrity, incompetence and decadence.

Our platform instead, is designed to help you build a culture of excellence. We believe in the principles of merit. In the best ideas and the most competent people from all walks of life regardless of gender, origin or ethnicity. While merit is not an absolute value, there are strong prima facie reasons for hiring candidates on its basis, and it should enjoy a weighty presumption in social and business practices. Not only because it shows respect to the individual rather than to a group but simply because the best people should have the best positions.

The response to unWoke.hr has “triggered” a barrage of contempt, slanderous accusations, and deplorable hacking attempts to which the company has responded to in a clever statement:

An update from the creators of Unwoke.

We understand that a very small but loud group of people have taken serious offense by the Unwoke Platform.

– We don’t care.

We just find it jaw-dropping that so many people in that particular line of work (destruction) have been shouting for years about establishing hiring processes where the ethnicity of a person is masked. Now, when we’ve created it, their heads suddenly explode because of how “racist” it is. It makes one wonder how dedicated to their principles they really are [rhetorical question].

To Vice Media
Please remove your statements linking us to “white supremacists”, calling us “dumb” and deserving of being “trolled to death”. Fail to do so and you will have a nice defamation suit coming your way very soon. Trust us, serving you would be an absolute joy.

To our users
Thank you for the unimaginable level of support. The amount of love letters are in the thousands and we’re working diligently to reply to each and everyone of you.

Some people out there including some media outlets, would like to have you believe that we’ve had a “rocky start”. We not only disagree, that whole notion is blatantly false.

First of all, we weren’t hacked. We were “XSS-attacked”.

Secondly, the email “leak” wasn’t really a leak.

We built the entire Unwoke platform over a weekend to see if a concept like this would stick. So of course there were flaws. But the trolls did us a favor by exposing our vulnerabilities. Then they put their findings on social media so we could fix everything immediately. Just brilliant work there. Free lunch as far as we’re concerned. So stay tuned, a lot of new and exciting updates are coming very soon!

– What have we learned?
Nothing. It only confirms what we already knew. That the people shouting are incapable of creation and only capable of destruction. And that a platform like Unwoke is desperately needed and desperately feared by the same people who seek to destroy it.

– Is the platform secure?
Unequivocally yes.

Sincerely,
The creators of Unwoke.

Of course, having the proper premise is no guarantee of success. But it will be interesting to see how it goes.

Jeff Bezos Testimony To House Subcommittee on Antitrust, Commercial, and Administrative Law

Amazon has posted the prepared statement by Amazon CEO and Founder Jeff Bezos to be given to the U.S. House Committee on the Judiciary as Testimony before the Subcommittee on Antitrust, Commercial, and Administrative Law.

Bezo reflects about his early life and the lessons he learned from his family on dealing with setbacks and adversity, the greatness of America in its worship of innovation and entrepreneurial risk-taking, and his excitement for creating things. Though there are things that one can criticize in the statement, it is an important read inside the mind of the CEO of one America’s most admired and successful companies.

Statement by Jeffrey P. Bezos
Founder & Chief Executive Officer, Amazon
before the U.S. House of Representatives
Committee on the Judiciary
Subcommittee on Antitrust, Commercial, and Administrative Law
July 29, 2020

Thank you, Chairman Cicilline, Ranking Member Sensenbrenner, and members of the Subcommittee. I’m Jeff Bezos. I founded Amazon 26 years ago with the long-term mission of making it Earth’s most customer-centric company.

 

My mom, Jackie, had me when she was a 17-year-old high school student in Albuquerque, New Mexico. Being pregnant in high school was not popular in Albuquerque in 1964. It was difficult for her. When they tried to kick her out of school, my grandfather went to bat for her. After some negotiation, the principal said, “OK, she can stay and finish high school, but she can’t do any extracurricular activities, and she can’t have a locker.” My grandfather took the deal, and my mother finished high school, though she wasn’t allowed to walk across the stage with her classmates to get her diploma. Determined to keep up with her education, she enrolled in night school, picking classes led by professors who would let her bring an infant to class. She would show up with two duffel bags—one full of textbooks, and one packed with diapers, bottles, and anything that would keep me interested and quiet for a few minutes.

My dad’s name is Miguel. He adopted me when I was four years old. He was 16 when he came to the United States from Cuba as part of Operation Pedro Pan, shortly after Castro took over. My dad arrived in America alone. His parents felt he’d be safer here. His mom imagined America would be cold, so she made him a jacket sewn entirely out of cleaning cloths, the only material they had on hand. We still have that jacket; it hangs in my parents’ dining room. My dad spent two weeks at Camp Matecumbe, a refugee center in Florida, before being moved to a Catholic mission in Wilmington, Delaware. He was lucky to get to the mission, but even so, he didn’t speak English and didn’t have an easy path. What he did have was a lot of grit and determination. He received a scholarship to college in Albuquerque, which is where he met my mom. You get different gifts in life, and one of my great gifts is my mom and dad. They have been incredible role models for me and my siblings our entire lives.

You learn different things from your grandparents than you do from your parents, and I had the opportunity to spend my summers from ages four to 16 on my grandparents’ ranch in Texas. My grandfather was a civil servant and a rancher—he worked on space technology and missile-defense systems in the 1950s and ‘60s for the Atomic Energy Commission—and he was self-reliant and resourceful. When you’re in the middle of nowhere, you don’t pick up a phone and call somebody when something breaks. You fix it yourself. As a kid, I got to see him solve many seemingly unsolvable problems himself, whether he was restoring a broken-down Caterpillar bulldozer or doing his own veterinary work. He taught me that you can take on hard problems. When you have a setback, you get back up and try again. You can invent your way to a better place.

I took these lessons to heart as a teenager, and became a garage inventor. I invented an automatic gate closer out of cement-filled tires, a solar cooker out of an umbrella and tinfoil, and alarms made from baking pans to entrap my siblings.

The concept for Amazon came to me in 1994. The idea of building an online bookstore with millions of titles—something that simply couldn’t exist in the physical world—was exciting to me. At the time, I was working at an investment firm in New York City. When I told my boss I was leaving, he took me on a long walk in Central Park. After a lot of listening, he finally said, “You know what, Jeff, I think this is a good idea, but it would be a better idea for somebody who didn’t already have a good job.” He convinced me to think about it for two days before making a final decision. It was a decision I made with my heart and not my head. When I’m 80 and reflecting back, I want to have minimized the number of regrets that I have in my life. And most of our regrets are acts of omission—the things we didn’t try, the paths untraveled. Those are the things that haunt us. And I decided that if I didn’t at least give it my best shot, I was going to regret not trying to participate in this thing called the internet that I thought was going to be a big deal.

The initial start-up capital for Amazon.com came primarily from my parents, who invested a large fraction of their life savings in something they didn’t understand. They weren’t making a bet on Amazon or the concept of a bookstore on the internet. They were making a bet on their son. I told them that I thought there was a 70% chance they would lose their investment, and they did it anyway. It took more than 50 meetings for me to raise $1 million from investors, and over the course of all those meetings, the most common question was, “What’s the internet?”

Unlike many other countries around the world, this great nation we live in supports and does not stigmatize entrepreneurial risk-taking. I walked away from a steady job into a Seattle garage to found my startup, fully understanding that it might not work. It feels like just yesterday I was driving the packages to the post office myself, dreaming that one day we might be able to afford a forklift.

Amazon’s success was anything but preordained. Investing in Amazon early on was a very risky proposition. From our founding through the end of 2001, our business had cumulative losses of nearly $3 billion, and we did not have a profitable quarter until the fourth quarter of that year. Smart analysts predicted Barnes & Noble would steamroll us, and branded us “Amazon.toast.” In 1999, after we’d been in business for nearly five years, Barron’s headlined a story about our impending demise “Amazon.bomb.” My annual shareholder letter for 2000 started with a one-word sentence: “Ouch.” At the pinnacle of the internet bubble our stock price peaked at $116, and then after the bubble burst our stock went down to $6. Experts and pundits thought we were going out of business. It took a lot of smart people with a willingness to take a risk with me, and a willingness to stick to our convictions, for Amazon to survive and ultimately to succeed.

And it wasn’t just those early years. In addition to good luck and great people, we have been able to succeed as a company only because we have continued to take big risks. To invent you have to experiment, and if you know in advance that it’s going to work, it’s not an experiment. Outsized returns come from betting against conventional wisdom, but conventional wisdom is usually right. A lot of observers characterized Amazon Web Services as a risky distraction when we started. “What does selling compute and storage have to do with selling books?” they wondered. No one asked for AWS. It turned out the world was ready and hungry for cloud computing but didn’t know it yet. We were right about AWS, but the truth is we’ve also taken plenty of risks that didn’t pan out. In fact, Amazon has made billions of dollars of failures. Failure inevitably comes along with invention and risk-taking, which is why we try to make Amazon the best place in the world to fail.

Since our founding, we have strived to maintain a “Day One” mentality at the company. By that I mean approaching everything we do with the energy and entrepreneurial spirit of Day One. Even though Amazon is a large company, I have always believed that if we commit ourselves to maintaining a Day One mentality as a critical part of our DNA, we can have both the scope and capabilities of a large company and the spirit and heart of a small one.

In my view, obsessive customer focus is by far the best way to achieve and maintain Day One vitality. Why? Because customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and a constant desire to delight customers drives us to constantly invent on their behalf. As a result, by focusing obsessively on customers, we are internally driven to improve our services, add benefits and features, invent new products, lower prices, and speed up shipping times—before we have to. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it. And I could give you many such examples. Not every business takes this customer-first approach, but we do, and it’s our greatest strength.

Customer trust is hard to win and easy to lose. When you let customers make your business what it is, then they will be loyal to you—right up to the second that someone else offers them better service. We know that customers are perceptive and smart. We take as an article of faith that customers will notice when we work hard to do the right thing, and that by doing so again and again, we will earn trust. You earn trust slowly, over time, by doing hard things well—delivering on time; offering everyday low prices; making promises and keeping them; making principled decisions, even when they’re unpopular; and giving customers more time to spend with their families by inventing more convenient ways of shopping, reading, and automating their homes. As I have said since my first shareholder letter in 1997, we make decisions based on the long-term value we create as we invent to meet customer needs. When we’re criticized for those choices, we listen and look at ourselves in the mirror. When we think our critics are right, we change. When we make mistakes, we apologize. But when you look in the mirror, assess the criticism, and still believe you’re doing the right thing, no force in the world should be able to move you.

Fortunately, our approach is working. Eighty percent of Americans have a favorable impression of Amazon overall, according to leading independent polls. Who do Americans trust more than Amazon “to do the right thing?” Only their primary physicians and the military, according to a January 2020 Morning Consult survey. Researchers at Georgetown and New York University found in 2018 that Amazon trailed only the military among all respondents to a survey on institutional and brand trust. Among Republicans, we trailed only the military and local police; among Democrats, we were at the top, leading every branch of government, universities, and the press. In Fortune’s 2020 rankings of the World’s Most Admired Companies, we came in second place (Apple was #1). We are grateful that customers notice the hard work we do on their behalf, and that they reward us with their trust. Working to earn and keep that trust is the single biggest driver of Amazon’s Day One culture.

The company most of you know as Amazon is the one that sends you your online orders in the brown boxes with the smile on the side. That’s where we started, and retail remains our largest business by far, accounting for over 80% of our total revenue. The very nature of that business is getting products to customers. Those operations need to be close to customers, and we can’t outsource these jobs to China or anywhere else. To fulfill our promises to customers in this country, we need American workers to get products to American customers. When customers shop on Amazon, they are helping to create jobs in their local communities. As a result, Amazon directly employs a million people, many of them entry-level and paid by the hour. We don’t just employ highly educated computer scientists and MBAs in Seattle and Silicon Valley. We hire and train hundreds of thousands of people in states across the country such as West Virginia, Tennessee, Kansas, and Idaho. These employees are package stowers, mechanics, and plant managers. For many, it’s their first job. For some, these jobs are a stepping stone to other careers, and we are proud to help them with that. We are spending more than $700 million to give more than 100,000 Amazon employees access to training programs in fields such as healthcare, transportation, machine learning, and cloud computing. That program is called Career Choice, and we pay 95% of tuition and fees toward a certificate or diploma for in-demand, high-paying fields, regardless of whether it’s relevant to a career at Amazon.

Patricia Soto, one of our associates, is a Career Choice success story. Patricia always wanted to pursue a career in the medical field to help care for others, but with only a high school diploma and facing the costs of post-secondary education, she wasn’t sure she’d be able to accomplish that goal. After earning her medical certification through Career Choice, Patricia left Amazon to start her new career as a medical assistant at Sutter Gould Medical Foundation, supporting a pulmonary medicine doctor. Career Choice has given Patricia and so many others a shot at a second career that once seemed out of reach.

Amazon has invested more than $270 billion in the U.S. over the last decade. Beyond our own workforce, Amazon’s investments have created nearly 700,000 indirect jobs in fields like construction, building services, and hospitality. Our hiring and investments have brought much-needed jobs and added hundreds of millions of dollars in economic activity to areas like Fall River, Massachusetts, California’s Inland Empire, and Rust Belt states like Ohio. During the COVID-19 crisis, we hired an additional 175,000 employees, including many laid off from other jobs during the economic shutdown. We spent more than $4 billion in the second quarter alone to get essential products to customers and keep our employees safe during the COVID-19 crisis. And a dedicated team of Amazon employees from across the company has created a program to regularly test our workers for COVID-19. We look forward to sharing our learnings with other interested companies and government partners.

The global retail market we compete in is strikingly large and extraordinarily competitive. Amazon accounts for less than 1% of the $25 trillion global retail market and less than 4% of retail in the U.S. Unlike industries that are winner-take-all, there’s room in retail for many winners. For example, more than 80 retailers in the U.S. alone earn over $1 billion in annual revenue. Like any retailer, we know that the success of our store depends entirely on customers’ satisfaction with their experience in our store. Every day, Amazon competes against large, established players like Target, Costco, Kroger, and, of course, Walmart—a company more than twice Amazon’s size. And while we have always focused on producing a great customer experience for retail sales done primarily online, sales initiated online are now an even larger growth area for other stores. Walmart’s online sales grew 74% in the first quarter. And customers are increasingly flocking to services invented by other stores that Amazon still can’t match at the scale of other large companies, like curbside pickup and in-store returns. The COVID-19 pandemic has put a spotlight on these trends, which have been growing for years. In recent months, curbside pickup of online orders has increased over 200%, in part due to COVID-19 concerns. We also face new competition from the likes of Shopify and Instacart—companies that enable traditionally physical stores to put up a full online store almost instantaneously and to deliver products directly to customers in new and innovative ways—and a growing list of omnichannel business models. Like almost every other segment of our economy, technology is used everywhere in retail and has only made retail more competitive, whether online, in physical stores, or in the various combinations of the two that make up most stores today. And we and all other stores are acutely aware that, regardless of how the best features of “online” and “physical” stores are combined, we are all competing for and serving the same customers. The range of retail competitors and related services is constantly changing, and the only real constant in retail is customers’ desire for lower prices, better selection, and convenience.

It’s also important to understand that Amazon’s success depends overwhelmingly on the success of the thousands of small and medium-sized businesses that also sell their products in Amazon’s stores. Back in 1999, we took what at the time was the unprecedented step of welcoming third-party sellers into our stores and enabling them to offer their products right alongside our own. Internally, this was extremely controversial, with many disagreeing and some predicting this would be the beginning of a long, losing battle. We didn’t have to invite third-party sellers into the store. We could have kept this valuable real estate for ourselves. But we committed to the idea that over the long term it would increase selection for customers, and that more satisfied customers would be great for both third-party sellers and for Amazon. And that’s what happened. Within a year of adding those sellers, third-party sales accounted for 5% of unit sales, and it quickly became clear that customers loved the convenience of being able to shop for the best products and to see prices from different sellers all in the same store. These small and medium-sized third-party businesses now add significantly more product selection to Amazon’s stores than Amazon’s own retail operation. Third-party sales now account for approximately 60% of physical product sales on Amazon, and those sales are growing faster than Amazon’s own retail sales. We guessed that it wasn’t a zero sum game. And we were right—the whole pie did grow, third-party sellers did very well and are growing fast, and that has been great for customers and for Amazon.

There are now 1.7 million small and medium-sized businesses around the world selling in Amazon’s stores. More than 200,000 entrepreneurs worldwide surpassed $100,000 in sales in our stores in 2019. On top of that, we estimate that third-party businesses selling in Amazon’s stores have created over 2.2 million new jobs around the world.

One of those sellers is Sherri Yukel, who wanted to change careers to be home more for her children. She started handcrafting gifts and party supplies for friends as a hobby, and eventually began selling her products on Amazon. Today, Sherri’s company employs nearly 80 people and has a global customer base. Another is Christine Krogue, a stay-at-home mother of five in Salt Lake City. Christine started a business selling baby clothes through her own website before taking a chance on Amazon. She has since seen her sales more than double, and she’s been able to expand her product line and hire a team of part-time employees. Selling on Amazon has allowed Sherri and Christine to grow their own businesses and satisfy customers on their own terms.

And it is striking to remember how recent all of this is. We did not start out as the largest marketplace—eBay was many times our size. It was only by focusing on supporting sellers and giving them the best tools we could invent that we were able to succeed and eventually surpass eBay. One such tool is Fulfillment by Amazon, which enables our third-party sellers to stow their inventory in our fulfillment centers, and we take on all logistics, customer service, and product returns. By dramatically simplifying all of those challenging aspects of the selling experience in a cost-effective way, we have helped many thousands of sellers grow their businesses on Amazon. Our success may help explain the wide proliferation of marketplaces of all types and sizes around the world. This includes U.S. companies like Walmart, eBay, Etsy, and Target, as well as retailers based overseas but selling globally, such as Alibaba and Rakuten. These marketplaces further intensify competition within retail.

The trust customers put in us every day has allowed Amazon to create more jobs in the United States over the past decade than any other company—hundreds of thousands of jobs across 42 states. Amazon employees make a minimum of $15 an hour, more than double the federal minimum wage (which we have urged Congress to increase). We’ve challenged other large retailers to match our $15 minimum wage. Target did so recently, and just last week so did Best Buy. We welcome them, and they remain the only ones to have done so. We do not skimp on benefits, either. Our full-time hourly employees receive the same benefits as our salaried headquarters employees, including comprehensive health insurance starting on the first day of employment, a 401(k) retirement plan, and parental leave, including 20 weeks of paid maternity leave. I encourage you to benchmark our pay and benefits against any of our retail competitors.

More than 80% of Amazon shares are owned by outsiders, and over the last 26 years—starting from zero—we’ve created more than $1 trillion of wealth for those outside shareholders. Who are those shareowners? They are pension funds: fire, police, and school teacher pension funds. Others are 401(k)s—mutual funds that own pieces of Amazon. University endowments, too, and the list goes on. Many people will retire better because of the wealth we’ve created for so many, and we’re enormously proud of this.

At Amazon, customer obsession has made us what we are, and allowed us to do ever greater things. I know what Amazon could do when we were 10 people. I know what we could do when we were 1,000 people, and when we were 10,000 people. And I know what we can do today when we’re nearly a million. I love garage entrepreneurs—I was one. But, just like the world needs small companies, it also needs large ones. There are things small companies simply can’t do. I don’t care how good an entrepreneur you are, you’re not going to build an all-fiber Boeing 787 in your garage.

Our scale allows us to make a meaningful impact on important societal issues. The Climate Pledge is a commitment made by Amazon and joined by other companies to meet the goals of the Paris Agreement 10 years early and be net zero carbon by 2040. We plan to meet the pledge, in part, by purchasing 100,000 electric delivery vans from Rivian—a Michigan-based producer of electric vehicles. Amazon aims to have 10,000 of Rivian’s new electric vans on the road as early as 2022, and all 100,000 vehicles on the road by 2030. Globally, Amazon operates 91 solar and wind projects that have the capacity to generate over 2,900 MW and deliver more than 7.6 million MWh of energy annually—enough to power more than 680,000 U.S. homes. Amazon is also investing $100 million in global reforestation projects through the Right Now Climate Fund, including $10 million Amazon committed in April to conserve, restore, and support sustainable forestry, wildlife and nature-based solutions across the Appalachian Mountains—funding two innovative projects in collaboration with The Nature Conservancy. Four global companies—Verizon, Reckitt Benckiser, Infosys, and Oak View Group—recently signed The Climate Pledge, and we continue to encourage others to join us in this fight. Together, we will use our size and scale to address the climate crisis right away. And last month, Amazon introduced The Climate Pledge Fund, started with $2 billion in funding from Amazon. The Fund will support the development of sustainable technologies and services that in turn will enable Amazon and other companies to meet The Climate Pledge. The Fund will invest in visionary entrepreneurs and innovators who are building products and services to help companies reduce their carbon impact and operate more sustainably.

We recently opened the largest homeless shelter in Washington state—and it’s located inside one of our newest headquarters buildings in downtown Seattle. The shelter is for Mary’s Place, an incredible Seattle-based nonprofit. The shelter, part of Amazon’s $100 million investment in Mary’s Place, spans eight floors and can accommodate up to 200 family members each night. It has its own health clinic and provides critical tools and services to help families fighting homelessness get back on their feet. And there is dedicated space for Amazon to provide weekly pro-bono legal clinics offering counsel on credit and debt issues, personal injury, housing and tenant rights. Since 2018, Amazon’s legal team has supported hundreds of Mary’s Place guests and volunteered more than 1,000 pro-bono hours.

Amazon Future Engineer is a global childhood-to-career program designed to inspire, educate, and prepare thousands of children and young adults from underrepresented and underserved communities to pursue a computer science career. The program funds computer science coursework and professional teacher development for hundreds of elementary schools, introductory and AP Computer Science classes for more than 2,000 schools in underserved communities across the country, and 100 four-year, $40,000 college scholarships to computer science students from low-income backgrounds. Those scholarship recipients also receive guaranteed internships at Amazon. There is a diversity pipeline problem in tech, and this has an outsized impact on the Black community. We want to invest in building out the next generation of technical talent for the industry and expanding the opportunities for underrepresented minorities. We also want to accelerate this change right now. To find the best talent for technical and non-technical roles, we actively partner with historically Black colleges and universities on our recruiting, internship, and upskilling initiatives.

Let me close by saying that I believe Amazon should be scrutinized. We should scrutinize all large institutions, whether they’re companies, government agencies, or non-profits. Our responsibility is to make sure we pass such scrutiny with flying colors.

It’s not a coincidence that Amazon was born in this country. More than any other place on Earth, new companies can start, grow, and thrive here in the U.S. Our country embraces resourcefulness and self-reliance, and it embraces builders who start from scratch. We nurture entrepreneurs and start-ups with stable rule of law, the finest university system in the world, the freedom of democracy, and a deeply accepted culture of risk-taking. Of course, this great nation of ours is far from perfect. Even as we remember Congressman John Lewis and honor his legacy, we’re in the middle of a much-needed race reckoning. We also face the challenges of climate change and income inequality, and we’re stumbling through the crisis of a global pandemic. Still, the rest of the world would love even the tiniest sip of the elixir we have here in the U.S. Immigrants like my dad see what a treasure this country is—they have perspective and can often see it even more clearly than those of us who were lucky enough to be born here. It’s still Day One for this country, and even in the face of today’s humbling challenges, I have never been more optimistic about our future.

I appreciate the opportunity to appear before you today and am happy to take your questions.

Related Reading:

What Motivates Amazon’s Critics?
What really drives Amazin’s critics is a hatred of success: success of anyone who is achieving more than others.

No Need to Boycott Amazon.com
There is absolutely no moral reason to boycott the company.

Amazon Advocates Government Force To Increase The Minimum Wage
While Amazon has every right to choose how to compensate its workers, this minimum wage increase and Bezos’ encouraging the federal government to do the same are wrong.

Hands Off Amazon.com and Sell Off the Post Office
President Trump should focus on getting government out of business by deregulating—and privatizing the United States Postal Service.

Antitrust Assault on Big-Tech

Here is the video for the House Antitrust Subcommittee hearing featuring testimony from Amazon CEO Jeff Bezos, Apple CEO Tim Cook, Facebook CEO Mark Zuckerberg and Google CEO Sundar Pichai.

Compare the above CEO’s response to that of Howard Hughes under similar circumstances, when Howard Hughes testified before a Senate Subcommittee investigating war contracts in August 1947.

Yaron Brook’s excellent analysis:

Salsman: Say is Capitalism’s Greatest Economist

Move over Adam Smith, according to Professor Richard Salsman, Jean-Baptiste Say is capitalism’s greatest economist:

Having studied quite a lot of political economy over the past four decades, and critically, I must say that I consider A Treatise on Political Economy (1803)1 by Jean-Baptiste Say (1767-1832)2 to be best work ever published in the field. It easily surpasses anything contemporary but also Adam Smith’s Wealth of Nations (1776) and Ludwig von Mises’s Human Action: A Treatise on Economics (1949). Nothing beats it. Not coincidently, I also judge Say to be history’s greatest political economist, indeed, “capitalism’s economist” (though the term “capitalism” wasn’t coined until 1850).

According to Salsman:

For Say, Smith wasn’t sufficiently pro-capitalist. …. [Say’s]Treatise rejects roughly a half-dozen of Smith’s erroneous ideas, including his belief in the labor theory of value, his denial of the productivity of services, and his defense of usury laws. Say’s objectivity and independence made him reject the labor theory of value even as predecessors and successors—Smith (1776), Ricardo (1817), Malthus (1821), Mill (1848), and Marx (1869)—accepted it in their own texts, helping promote (by intent or not) anti-capitalism.

Salsman also summarizes Say’s key doctrines. He states that Say:

  1. contends that strict preservation and protection of private property advances both justice and prosperity;
  2. explains how intelligence is the main source of wealth and profit is the net production of wealth, not a “theft” from laborers nor an unearned monopolist “rent”;
  3. explains why a harmony of interests exists among seemingly disparate classes and all the factors of production, and why machinery is good and not, as Smith, Ricardo, and Marx believed, a source of alienation or mass joblessness;
  4. recognizes entrepreneurs as the premier producers, because skilled solicitors, organizers, motivators, and payers of the various factors of productions
  5. defends as productive what later became known as the “service sector” (including finance);
  6. promulgates the “law of markets” (later, “Say’s Law”), the principle that supply constitutes demand, that production has primacy (we must produce before we can demand), that aggregate supply and aggregate demand are inseparable (like two sides of a coin), so no aggregate “over-production” (or “general glut”) can possibly arise;8
  7. explains how recessions are caused not by prior episodes of “over-production” (or “deficient demand”) but by government impediments to producing and profiting (such as punitive or arbitrary taxation and regulation);
  8. rejects the labor theory of value (that economic value reflects some embodied time spent in manual labor) and in its stead explicates and advances the idea that utility is the sole basis of value and price, as embodied in prices;
  9. shows that the value of finished goods determines production costs (not the reverse);
  10. distinguishes demand and consumption, the first being a desire to purchase coupled with purchasing power (prior production), the latter a destruction (using up) of wealth; real demand is synonymous with supply; consumption per se (unless part of a net-value creation in a production process) is no boon to wealth-creation.

Link: The Basic Truths of Saysian Economics and Their Contemporary Relevance (FEE)

Related Articles on Say:

Salsman: Fiscal-Monetary ‘Stimulus’ is Depressive

Writes Richard Salsman in The Hill: on why Fiscal-monetary ‘stimulus’ is depressive (26 May 2020):

What is the case for “stimulus”? Many economists believe public spending and money issuance create wealth or purchasing power. Not so. Our only means of obtaining real goods and services is from wealth creation — production. Under barter no one comes to market expecting to buy stuff without also offering stuff. A monetary economy does not alter this key principle.

[…]

To see why “stimulus” truly depresses, consult the basics. The creation of public money and public debt is not the creation of wealth; it is not food, clothing, shelter, energy or the like. Even privately generated money and debt, which reflect the needs of trade and lengthy production chains, represent, facilitate and circulate wealth but are not themselves wealth. Meanwhile, the savings borrowed by governments are unavailable to productive enterprises, and when a government creates fiat money beyond what money holders demand, the money loses purchasing power, which boosts the cost of living. These are not roads to prosperity.

COVID-19 Roundup: (April 2020)

Fact 1: The overwhelming majority of people do not have any significant risk of dying from COVID-19.
Fact 2: Protecting older, at-risk people eliminates hospital overcrowding.
Fact 3: Vital population immunity is prevented by total isolation policies, prolonging the problem.
Fact 4: People are dying because other medical care is not getting done due to hypothetical projections.
Fact 5: We have a clearly defined population at risk who can be protected with targeted measures.

After providing evidence for the above facts he goes on to conclude:

The appropriate policy, based on fundamental biology and the evidence already in hand, is to institute a more focused strategy like some outlined in the first place: Strictly protect the known vulnerable, self-isolate the mildly sick and open most workplaces and small businesses with some prudent large-group precautions. This would allow the essential socializing to generate immunity among those with minimal risk of serious consequence, while saving lives, preventing overcrowding of hospitals and limiting the enormous harms compounded by continued total isolation.

A pandemic does not alter the role of a government. For example, it can limit the freedom of those individuals who carry the virus for limited periods to protect others, whose right to life would be violated. This could involve testing, tracing contacts, and tracking. When governments are involved in operating health care systems, as they are in most mixed economies, they would isolate nursing home residents and other vulnerable people, increase hospital capacity, and set guidelines for physical distancing—as opposed to violating everybody’s right to liberty by locking down economies.

We need to learn to appreciate progress—both what we’ve already done, and why we can’t stop now. We need to tell the amazing story of progress: how comfort, safety, health, and luxury have become commonplace, and what a dramatic achievement that has been.

More recently, in the wake of the Covid-19 virus outbreak, we’ve seen unwarranted, unprecedented violations of all three realms of freedom in America – mandates to close businesses, edicts that people stay in their homes (“shelter in place,” akin to a nationwide house arrest of innocents presumed guilty), decrees against assembling (compelling “social distancing”), orders restricting access to gun shops, even the classification of some street protests (against the illiberal controls) as prohibited because a “non-essential” activity.  We’ve yet to see challenges from the ACLU or court orders staying the rights violations. Why?

The lockdowns, whatever one thinks of them, were never sold to us as a way to eradicate the disease. They were sold as a way to “flatten the curve” so that the medical system didn’t become overwhelmed, leading to *unnecessary* deaths. […] We must open the economy as fast as we can. And we must do so while managing the disease as best we can. That includes selective isolation for the most vulnerable. (I have family members in this category…and, if it matters, they support re-opening the economy. They recognize that it would be immoral to demand that we sacrifice the whole country to reduce their odds of getting the disease.)

  • Alex Epstein’s video “A pro-freedom approach to fighting COVID-19″: (Power Hour, April 15, 2020):

If you’re seeking to avoid COVID-19, the hand sanitizer gel you carry in a pocket or purse did not exist until the 1960s. If you start to show symptoms, the pulse oximeter that tests your blood oxygenation was not developed until the 1970s. If your case worsens, the mechanical ventilator that keeps you alive was invented in the 1950s—in fact, no form of artificial respiration was widely available until the “iron lung” used to treat polio patients in the 1930s. Even the modern emergency medical system did not exist until recently: if during the 1918 flu pandemic you became seriously ill, there was no 911 hotline to call, and any ambulance that showed up would likely have been a modified van or hearse, with no equipment or trained staff.

If you are a scientist at an academic institution currently working on a COVID-19 related project and in need of funding, we invite you to apply for a Fast Grant. Fast Grants are $10k to $500k and decisions are made in under 48 hours. If you wish to apply to grants for scientific or biomedical COVID-19 projects, please apply through FastGrants.org.

Intercept: Key U.S. Manufactured Medical Supplies Shipped to Foreign Buyers

From “Key Medical Supplies Were Shipped From U.S. Manufacturers to Foreign Buyers, Records Show” (The Intercept):

Vessel manifests maintained by U.S. Customs and Border Protection and reviewed by The Intercept show a steady flow of the medical equipment needed to treat the coronavirus being shipped abroad as recently as March 17.

[…]

Drive DeVilbiss Healthcare, a Pennsylvania-based health product firm that produces supplemental oxygen machines, sent at least three different shipments of respiratory equipment to Belgium in mid-February and early March. The total cargo included 14 containers weighing more than 55 tons.

Fifty-five tons!

On March 8, two tons of Vapotherm’s high-flow disposable patient circuit units, used for operating its respiratory aids, were loaded onto a container ship in the Port of Los Angeles. The shipment was sent to Kobe, Japan, for Japan Medicalnext Co., a health care distributor.

The records show dozens of other shipments of respirator equipment, medical garments, medical masks, oxygen concentrators, and ventilators sent abroad over the last two months.

[…]

On February 28, a ship left New York for Hamburg, Germany, with about 1.5 tons of ventilator masks manufactured by Allied Healthcare Products, a health product business based in St. Louis. The masks are used for the company’s portable ventilator unit.

The reason?

The U.S. government has placed no restrictions on exports of medical supplies while continuing to impose financial penalties on the import of personal protective gear, protective goggles, pulse oximeters, hand sanitizer, and other medical products from China. On March 10 and 12, President Donald Trump temporarily lifted tariffs, in place since 2017, on some of these medical products.

 

Yaron Brook on How a Capitalist Society Would Respond to the Health Care Crisis

Yaron Brook, in an excellent Twitter thread, makes an off the cuff outline of how he thinks a free-market would respond to the COVID-19 crisis:

In a truly capitalist society, here is how the market responds:

1. Health insurance companies monitor for health risks (they have an economic interest to do so).

2. Warn early — implement plans with hospitals, that have been developed well in advance.

3. Demand from hospitals for extra equipment, causes prices to go up quickly.

4. The market responds by bringing on new capacity quickly.

5. Groceries raise prices on high in-demand goods, thus reducing “hoarding” and assuring continued supply.

6. Hospitals (all private, and in a completely private market) activate emergency plans (which they have a profit-motive to have) for additional beds (in mothballed buildings, local hotels, or other facilities).

7. Private pharmaceutical companies and labs develop tests at the request of hospitals and clinics.

8. Private clinics start testing in mass.

9. Goverment’s job — to make sure those who are a threat to others, are isolated.

10. Private media and health experts, provide objective (non-political) advice to individuals and companies on how to deal, in the context of their own lives, with the pandemic.

11. Testing provides individuals and companies with the kind of information crucial to making rational decisions.

12. Private labs and pharma companies rush to innovate treatments and vaccines.

13. Private testing and certification organizations (“FDA” replacements) ramp up to approve test kits, treatments, and vaccines.

14. Business adjusts to peoples’ preferences for safety. Put in necessary protections and conveniences…

15. People who don’t follow the reasonable guidelines suffer social ostracism and left to suffer consequences.

16. Insurance contracts could be written in ways that say — if you want to be covered, behave…

Feel free to add — private market responses to pandemic…

You can read the original thread and the responses here.

FDA Kills: Relents on Limiting Mask Sterilation

The Battelle Corporation has a technology that can decontaminate face masks making them reusable — unfortunately, FDA regulations limited its use until today.

From “Battelle gets full approval for mask sterilization”/ Dayton Daily News:

The FDA gave full approval to Battelle to utilize new surgical mask sterilization technology, which can decontaminate up to 80,000 masks a day per unit.

[…]

The FDA initially limited Battelle’s approval to 10,000 masks a day, drawing criticism from Gov. Mike DeWine and Lt. Gov. Jon Husted.

“The FDA’s decision to severely limit the use of this life-saving technology is nothing short of reckless,” DeWine said in a statement. “Battelle’s innovative technology has the capability to protect health care professionals and first responders in Ohio and across the country, but in this time of crisis, the FDA has decided not to support those who are risking their lives to save others.”

Added DeWine: “This is a matter of life and death. I am not only disappointed by this development, but I’m also stunned that the FDA would decline to do all it can to protect this country’s frontline workers in this serious time of need.”

For days running, DeWine has publicly pleaded with the FDA to issue an emergency waiver for the use of the new technology that could sterilize up to 160,000 personal protective face masks every day.

After this crisis is over, the power the FDA yields to halt innovation and progress needs to be abolished.

Our Favorite Business Ethics Book is Now Available as an Audiobook on Audible

Professor Jaana Woiceshyn’s marvelous book on business ethics, How to Be Profitable and Moral: A Rational Egoist Approach to Business, has just been released as an audiobook narrated by Sean Salsbury.

Does one have to sacrifice business profits to be moral?

Dr. Woiceshyn says “no”, and explains why, by introducing business students a set of rational, logical, scientific principles on how they can maximize profits in the long run by acting morally.

Required reading — or listening — for all employees, business students, and CEOs.

Get it here.

p.s. We will have a full review posted shortly!

Microsoft Founder Bill Gates Went Into Early Retirement Because of DOJ Antitrust Lawsuit

In an age with a frenzy of Government antitrust departments going after successful businessines like: Alphabet (Google), Amazon and Facebook, Bill Gates commented in a recent interview that he thinks that Windows would have been dominant in the mobile phone category if not for the DOJ antitrust suit against Microsoft.

“There’s no doubt the antitrust lawsuit was bad for Microsoft, and we would have been more focused on creating the phone operating system, and so instead of using Android today, you would be using Windows Mobile if it hadn’t been for the antitrust case”  […] “Oh, we were so close….I was just too distracted. I screwed that up because of the distraction.” He said the company was three months too late with a release Motorola would have used on a phone….Now nobody here has ever heard of Windows Mobile. But oh, well. That’s a few hundred billion here or there…” [Bill Gates: People would use Windows Mobile if not for antitrust case]

This is a damning indictment of how government policy determines winners and losers in the marketplace.

(It would be an interesting investigation to see how many government officials and their cronies have profited over Microsoft losing the Mobile category to Google and Apple.)

Even worse, reports the article:

Gates also said he would not have retired as soon had it not been for the U.S. government case, which began in 1998. Gates started the company with Paul Allen in 1975, then stepped aside as CEO in 2000, letting Steve Ballmer take the reins as the antitrust case was at its peak.

From the archives: