Alibaba and Amazon: The Creative Potential of the Bourgeois is Spent

Two mega e-commerce firms, Alibaba and Amazon, are quickly establishing monopoly control over the next generation of commerce and logistics. Jack Ma, the Executive Chairman of Alibaba, recently asserted that his company is “working to create the fundamental digital and physical infrastructure for the future of commerce, which includes marketplaces, payments, logistics, cloud computing, big data and a host of other fields.” Amazon, headed by Jeff Bezos, now the richest person in the world, is following a parallel vision. E-commerce and logistics fulfill a real social necessity, and this next generation of infrastructure must be built. However, despite these promises by Ma and Bezos, they, like the rest of the capitalists, are systemically limited in their ability to complete this task.

A socialist future will require a vast network connecting the world to efficiently move and deliver goods and services. Household goods, medication, and leisure items can be accessible for people everywhere once the infrastructure exists to support it. Capitalism is predicated on the impoverishment of the majority of the world’s people and cannot magically conjure up the middle-income global consumer base required to develop this infrastructure profitably. Without a rational economic plan, however, this process will develop in a limited and deformed way. As new monopoly firms attempt to step in and provide this planning, e-commerce and logistics present yet another example of how “the old is pregnant with the new”—and it is up to the revolutionary working class to seize these networks and direct their development to their fullest potential.

Alibaba, a Chinese conglomerate currently valued at over half a trillion dollars, was founded in 1999 by Jack Ma, and by 2017 had revenues totaling $23.82 billion. Forbes describes Alibaba as “An Expanding Ecosystem Bet,” citing “550 million active mobile users per month, dwarfing Amazon and eBay” and “a cloud-services business, called Alibaba Cloud, which recently reported growth of 99% year-over-year.” Amazon occupies a similar niche and has been expanding its physical footprint in the world of shipping and logistics.

As Amazon and Alibaba expand into new markets, they will eventually compete with each other.

Until now the two companies have largely avoided contesting the same markets, and each enjoys a dominant position in their respective home countries. In 2017, Amazon accounted for about 44% of all e-commerce sales or about 4% of total retail sales in the US, while Alibaba’s online shopping platform brings in 56.6% of China’s online shopping dollars. But the firms will increasingly compete with each other as they continue to enter new markets, including India, where Amazon has invested $5bn and Alibaba has invested half a billion dollars in Patym, an Indian e-commerce company. The race extends into the digital realm, with both Amazon and Alibaba investing heavily in internet infrastructure. Amazon Web Services (AWS) currently dominates this space, but Alibaba aims to surpass AWS’s market share with their own cloud computing solution by 2019.

As part of Chinese imperialism’s intensifying orientation to the export of capital, Jack Ma has publicly aligned his firm’s vision with Xi Jinping’s “Belt and Road Initiative,” a Marshall Plan–like program of investment in projects intended to close the Eurasian “infrastructure gap”—and assure Chinese domination of the same.

Ma claims that the Chinese approach to international development will yield more equitable results than previous Western-led approaches to globalization, claiming that “instead of simply selling our products to Belt and Road countries or importing cheap labor and raw materials, we want to create jobs, stimulate overseas economies and improve people’s livelihoods.” However, without democratic control by the working class over this project, there is no reason to expect the outcome to be any different. Capitalism and imperialism are based on the exploitation of the working class in the pursuit of profits, whether the capital comes from the US, China, or anywhere else.

In spite of Ma’s claims, Alibaba’s global expansion in the pursuit of profits will result in the same degree of workers’ exploitation as Amazon’s.

For a capitalist e-commerce firm to massively enter a previously untapped market, there must exist a large layer of people in that country with the disposable income to purchase the goods being sold—the so-called “middle class.” But capitalism’s global division of labor imposes a limit on this, in the form of the stunted incomes of the working class in poor countries. The “middle class” in India is minuscule in relation to the country’s population and not growing, and the bourgeois press has warned the capitalists that consumer spending by this layer cannot be relied upon to drive profits. In Africa also, capitalist development has led to the creation of only a tiny middle class, with limited buying power.

Capitalism’s relentless pursuit of profits at the expense of workers was for some time able to develop the world economy, particularly in the rich countries. The next generation of commerce and logistics seeks to incorporate the ex-colonial world, but in the epoch of capitalism’s crisis, the creative potential for profit to develop these areas has expired—Jack Ma and Jeff Bezos are not able to lead the way forward. A model of infrastructure development premised on the kind of better-paid workers more prevalent in the rich countries faces strict limits within a system that keeps poor countries permanently impoverished and indebted. Only the intervention of the world working class can fulfill the potential of a globally connected network of production, distribution, and exchange, based on solidarity and human need, not exploitation and oppression.