What goes up, must come down.
It’s no secret that the world’s 10 wealthiest men doubled their wealth during the pandemic. A sum equivalent to the GDP of several small countries combined is difficult to hide, especially in the information age.
What isn’t as well known is that we are currently witnessing perhaps the largest single transfer of wealth in the history of the world. The ultra wealthy- the top 1% of the 1%- already had more money than we could possibly have imagined before Covid19.
In 2022, the wealth gap is wider than ever. The world’s wealthiest got much richer during the uncertainty of a global pandemic. The world’s poor are about to get a whole lot poorer.
Not that the working and middle classes are poised to fare much better in the coming years. With inflation, rising prices, the cost of gasoline and shelter all skyrocketing, the bite taken out of the average family budget is already reaching truly punishing levels with no signs of the “transitory” duress we were promised when these upticks began.
Small and mid-sized businesses haven’t fared as well during the pandemic as their larger corporate cousins, either. When the dust settles on covid, and all the measures we took to stop the spread of it- which admittedly might have been overly ambitious- the dystopian nightmare into which small business owners have been plunged will be fully apparent in the “For Sale” and “Commercial Space for Rent” we’ll be seeing everywhere.
Those retail store owners, restauranteurs, and entrepreneurs who have managed to hold on this long are now being forced to contend with supply line issues, staffing shortages and a sharply rising cost of doing business.
Through it all, has sailed Amazon.
Amazon may have been best positioned- from the beginning- to take advantage of new consumer buying habits, online shopping trends, even the grocery delivery business during all the many ongoing ravages of Covid19. It isn’t Amazon’s fault- not exactly- though there are plenty of questionable business practices for which Amazon execs should answer.
Amazon is the latest iteration of a retail trend which has been marching along since the Agricultural Revolution, probably before. Trade is an ancient human vocation, likely as old as humanity itself.
The Spice Road, the Silk Road, the Roman Roads: Ancient trade routes shaped empires, helped civilizations rise and fall. Today, not much has changed and everything has changed.
Trade still shapes the world. Amazon ate Walmart, Walmart ate the Malls, the Malls ate Main Street, Main Street ate peddlers and traveling salesmen and on and on back through history ad infinitum.
Along the trade routes of antiquity, used for thousands of years, stand the long-forgotten remains of great cities like Petra. Along the highways of the U.S., stand abandoned retail buildings where K-Marts, independent merchants and mini-malls once stood.
Today, the trading titan astride the world, seemingly unmovable, is Amazon.
Even now, with a recession creeping in, Amazon stands to reap in even more profits than ever. Independently-produced brands have had to raise their prices by an eye-watering amount to keep up with the rising costs of shipping and raw materials. Amazon’s brands are looking better and better at $1, $2, or $3 cheaper.
What could possibly end the economic gravy train for Amazon? What on earth could ever rise to challenge Amazon? What could possibly threaten this molten giant of GDP production and globalized capitalism?
Now that the Chinese Communist Party has broken up with, and broken, Hollywood, it is worth wondering whether or not supreme ruler Xi Jinping will allow the trade relationship between the U.S. and China to remain as it is.
Being abruptly cut off from Chinese manufacturers en masse, something well within the power of Jinping, would gut Amazon’s earnings instantly, perhaps catastrophically. Such a radical shift in trade policy might topple the Goliath of Amazon overnight.
Considering the devolving global geopolitical situation- the increased tensions in the Middle East since the fall of Afghanistan to the Taliban, Russian forces invading Ukraine- such a drastic and sudden change in U.S.-China trade policy isn’t beyond imagination.
In a scenario where the People’s Liberation Army moves on Taiwan, for instance, if crushing sanctions were to be imposed by world leaders on China, retaliation from the CCP could easily include trade embargoes.
Now that the world is again confronting the prospect of global warfare- to say nothing of supply chain disruptions caused by things like war and pandemics- the upward limit of globalization may have finally been laid bare for all to see.
First of all, a 10,000 mile supply chain dependent on petroleum is not sustainable. Secondly, using globalism as an excuse for U.S. companies to relocate their manufacturing centers to countries with lower labor standards and fewer environmental regulations wasn’t an act of mercy or global citizenship.
Far from it.
Instead, the best intentions and decades of globalization have widened the wealth gap beyond imagining, while global poverty and environmental stewardship remain major challenges worldwide.
When Amazon tumbles from its perch, be it from changing trade policies, supply chain breakdowns, global warfare or something else, a return to more localized trade might replace it.
Emerging technology in automation and 3D printing has the potential to fundamentally change manufacturing, in which case the U.S. might see a return to the old glory days of Made in America.
Whatever happens to Amazon, humankind will continue to exchange foodstuffs, textiles, goods and ideas- just as we always have.
(contributing writer, Brooke Bell)