What Amazon’s Purchase of Whole Foods Means

By David R. Wheeler, Editor

If we needed further confirmation of the tech sector’s quest to dominate all other industries, we received such confirmation yesterday with Amazon’s purchase of Whole Foods for $13.7 billion. Christopher Mims at The Wall Street Journal sums up the situation pretty well by asking the following questions: “Why does a phone maker get into banking transactions? Why does a social network build a virtual-reality headset? Why does an online retailer buy a grocery chain?”

The short answer is: Because they can.

Tech companies are rich enough, powerful enough, and unregulated enough to buy whatever they want. The influential thinker and writer Jaron Lanier, author of You Are Not a Gadget and Who Owns the Future, believes that the tech sector will eventually swallow up the rest of the economy as each industry succumbs to the new digital world. Certain industries were unlucky enough to be first in line. For example, the music industry went from being a $45 billion industry to a $15 billion industry. The newspaper industry quickly followed; within a decade, the industry shed half its full-time jobs.

We lament the loss of the good-paying manufacturing jobs of the 1950s, and we complain about the low pay of Walmart and McDonald’s jobs. But if Silicon Valley continues to dictate the future, we’ll start to lose even those Walmart and McDonald’s jobs. Why? Because Silicon Valley companies favor the Uber model — and don’t hire any actual “employees.”

Well, okay, you can hire a few engineers, but those million-plus Uber drivers? Those aren’t employees. Those are independent contractors. Work whenever you want! Have flexibility!

Yes, we all love flexibility, but what happens when Uber drivers realize they need health insurance? What happens when they realize they need a retirement account?

Walmart might be everybody’s favorite corporate villain, but at least they offer full-time jobs. The business model of tech companies is to hire as few people as possible, and then outsource as much as possible to algorithms, robots, and “independent contractors.”

In the future, which car will you drive: an Apple or a Google?

Sorry, let me rephrase that: Which car will drive you?

 

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