Amazon and the Destruction Zone
“An unimaginable amount of unnecessary waste”: Hidden camera shows Amazon throwing away 124,000 brand-new or returned items, per week, from ONE warehouse. Cheaper for the vendor than paying for continued storage. The revelations about the scale of #AmazonWaste add to the picture of a business model based on exploiting it’s workers by denying them trade union representation, massive tax avoidance and huge “destruction”. This isn’t about one bad company. The “destruction zone” is capitalism. This isn’t system failure, this IS the system.
— ITV News (@itvnews) June 22, 2021
The recent revelations that Amazon destroys its stock will come as no surprise to many that can remember the butter mountains of Europe or those that understand Marx’s ‘tendency for the rate of profit to fall’. One of capitalism’s systemic contradictions Marx illustrated is that commodity production has to manufacture in greater quantities as human labour is replaced by machines in order to make profit.
This is debated & denied by a lot of people, but what Amazon just did, & notably Burberry’s before them, is evidence that Marx’s conclusions were justified. The process of commodity production to the purchase of them by the end consumer has some twists & turns, but I hope to put it simply below.
‘The source of profit is human labour’ – a statement fiercely denied by so many, yet its obviously true that labour is ‘a’ source of profit, if not the only provably stable source of profit. Monopolies have the ability to alter the market value of commodities to create greater profits by price fixing.
There is always some price fixing in the commodity market. The price of a commodity always includes some profit for producer, they need to make profit – that’s capitalism. It’s not a very high percentage of profit in most cases, most commodity production is carried out by large companies that can produce massive quantities of products in a short turnover time so the percentage of profit can be low because there’s a lot of product. The market forms an average price for the commodities based on the overall prices required by all the producers, some will make more profit than others, some less.
The tendency for the rate of profit to fall is not the percentage of profit the companies make. That is the first mistake a lot of people make. It is the rate of profit that falls at a fixed percentage of profit. For example, if the average producer of a certain commodity spends £100 to make 1 unit of the commodity & the percentage of profit is 10%, the price the commodity is sold at is £110. If the same producer finds a way to cut his cost in half to £50 to make 1 unit & the percentage of profit is still 10%, the price the commodity is sold at is £55.
What has happened, by reducing the cost of production, & the percentage of profit remaining the same, the rate of profit has been halved from £10 to £5. So now the producer has to make 2 units of his commodity to get £10 instead of 1.
Amazon’s UK boss John Boumphrey told ITV News just six weeks ago – before he knew of our investigation – the amount of unwanted stock that was destroyed was “extremely small”. https://t.co/OJjexB0YQd#AmazonWaste pic.twitter.com/AvaXeB6h8K
— ITV News (@itvnews) June 21, 2021
The reality? 124,000 items from just one warehouse in one week exposed here. Amazon has 24 warehouses in the UK. 52 weeks. 154,752,000 items destroyed per year in the U.K. alone. A gigantic waste of people’s time, of the Earth’s precious resources, massive wasted energy and vast pollution. This is capitalism. This is systemic failure. This cannot be ‘greened’.
The tendency for the rate of profit to fall is where machines firstly remove human labour from part of the production process or increase the labour power of individual workers with machines that increase the rate of production. As wages for human labour are paid for as long as human labour is required, human labour is more expensive over time than buying an expensive machine to replace them, which may lead to halving the producers cost per unit from £100 to £50. The machine is eventually paid for & as long as every other supplier of the same commodity doesn’t have that machine, the amount of profit for machine owning producer will be greater.
But inevitably, most producers buy that machine too, then market modifies the average price for commodities downwards & the rate of profit falls once again.
Another way to cut production costs is to make commodities abroad where labour is cheaper. This has the same effect as replacing labour with machines as it costs the producer less to make 1 unit – until the average producer of the commodity does the same thing, & then the market adjusts the commodity price downwards again.
This is the tendency for the rate of to fall. The only solution to this spiral towards ‘near zero’ profitability is to make more & more units of a commodity to make the same amount of money. The end result is too many commodities on the market. With too many commodities on the market, either a company sells the commodities at a lower price, which could mean a loss or, in order to protect the current market price of the commodity, they destroy an amount of product so that supply is not outweighing demand.
Thirdly, we have the Boxing Day sales & Black Friday, days where the consumer gets to buy products at a discount. This is another way of dumping oversupply (but without literally destroying the products). The concept is that the consumer accepts these two days as special circumstances, not simply companies maintaining higher prices throughout the rest of the year.
When companies like Amazon (who buy brands, not always just the products) or the producers themselves have to destroy products, it’s to protect their profitability. There is no turning back the amount of machines that can replace human labour, nor re-domesticating production to not exploit cheaper labour, not in a global commodity market where retailers buy from the cheapest supplier.
All of this will carry on happening, it’s systemic. More & more units will need to made, more resources used, more people made unemployed, prices falling to the point that profitability is not viable in the future without the destruction en masse of surplus stock. The world is damaged by the profit motive & it’s not like we weren’t told a century & half ago that this is the case.