With Amazon.com’s recent announcement of profits of $645 million on revenues of $19.17 billion last year, the company isn’t just surviving the recession—it’s pounding its rivals into the dust. So it’s cakes and ale all around for charitable beneficiaries of the Seattle giant’s largesse, right?
Sure—if they’re buying.
While Amazon.com is famously cheap in its prices, it’s also become infamously cheap to the community it lives in. The tacit silence over Amazon’s stinginess was first broken in a 2007 complaint on a Publishers Weekly blog by a rival Seattle bricks-and-mortar bookseller. When Paul Constant, books editor at the Seattle alt-weekly the Stranger, followed up on the post last year, he hit a stone wall: “[Amazon.com] has refused to return repeated e-mails and calls from The Stranger about the company’s seemingly nonexistent contributions to the Seattle arts scene,” he wrote at the time. “Internet searches for any sign of philanthropy on behalf of the company prove fruitless.”
Wait … no corporate giving at all? None?
Amazon.com’s own account hardly inspires confidence. True, their Giving page cites employee efforts, and the Bezos family maintains its own comparatively modest foundation. The company has also allowed other people’s donation money—and page views—to course through its site. But the only listed donations by Amazon.com itself are a single Nonprofit Innovation Award that has not been given since 2005, and the delivery after “recent flooding in Southeast Kansas, [of] more than 10 pallets of household goods … to local Red Cross shelters in Coffeyville, Kansas.” What they don’t note is that “recent” is July 2007—and, as Amazon.com is the largest employer in Coffeyville, that their own employees may have been among those benefiting from the goods.
Recent Amazon.com SEC filings and annual reports make no mention of grants, charitable donations, local arts support, or any other civic-minded efforts by the online giant. By contrast, their rival Barnes & Noble actually notes community relations in its annual reports and maintains a Sponsorships and Charitable Donations page complete with application instructions. For that matter, most multibillion-dollar corporations pay at least some lip service to doing good—especially when the company itself is doing great.
Puzzled, I e-mailed Patty Smith, Amazon.com’s director of corporate communications. Yes, she said, she’d like to hear Slate’s questions. But when asked specifically about the extent of Amazon.com’s charitable contributions—indeed, for any comment at all on a corporate policy regarding philanthropy—the company’s response was silence. Repeated calls and e-mails have since gone unreturned.
Two perfectly reasonable explanations come to mind for this. The first is that Amazon.com is exceedingly discreet—that it changes into superhero tights in a phone booth, then rockets off to provide clean water to poor villages, dole out blankets to shivering orphans, and phone in whopping anonymous grants during Car Talk pledge drives.
The other is that there are lemonade stands that donate more to charity than Amazon.com does.
But should this matter to consumers?
That question animates the recent but largely unnoticed book Creative Capitalism: A Conversation With Bill Gates, Warren Buffett, and Other Economic Leaders, overseen by Slate’s founding editor, Michael Kinsley. Beginning with Bill Gates’$2 2008 Davos speech by calling for “creative capitalism”—a loosely defined “hybrid engine” of corporate do-gooderism and entrepreneurial know-how—Kinsley calls on an all-star panel of economists and capitalists to respond.
If Gates expected his fellow captains of industry to sit in a circle and sing “Kumbaya,” it’s certainly not what he got. What’s remarkable about Creative Capitalism is that the best arguments belong to the tightwads—to those who believe, as Warren Buffett bluntly tells Gates in one conversation, “Basically, I don’t feel I’ve got the right to give away the shareholder’s money.” By the time Richard Posner comes aboard, the question’s not whether corporations should be finding new ways of being charitable—it’s whether they should engage in any charity.
The problem, contributor and Yale economist John Roemer notes in his tart essay “Just Tax the Rich,” is not that corporations don’t care enough—it’s that we don’t. “Repairing the present injustice should not be left to charity (or corporate philanthropy),” he writes, “but instead should be a state mandate.”
Yet the most bare-knuckled takedown comes from where you’d least expect it: beardy Berkeley prof and former Secretary of Labor Robert Reich. Corporate charity, Reich charges, is window dressing with a negligible effect on social problems—and it’s actually pernicious. “The message that companies are moral beings with social responsibilities diverts public attention from the task of establishing laws and rules in the first place,” Reich writes. “Meanwhile, increasingly, the real democratic process is being left to companies and their lobbyists.” He’s not speaking in hypotheticals, either; Larry Summers, Obama’s new chief of the National Economic Council, joins in to point out that the problem behind Fannie Mae and Freddie Mac was that “the illusion that the companies were doing virtuous work made it impossible to build a serious case for regulation.”
This is old-school skepticism—Adam Smith voiced the same concern in 1776—though its modern proponents draw on Milton Friedman, who maintained in his seminal 1962 volume Capitalism and Freedom that “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it plays within the rules of the game.”
Coldblooded, perhaps, but fair enough: Amazon.com and its shareholders can claim a philosophical purity of purpose and not spend a penny on charity so long they play by the rules. There’s just one problem: Amazon.com doesn’t much like the rules.
Amazon.com has spent a decade opposing the enforcement of online taxes so that its noncollection of sales tax creates a powerful pricing incentive over bricks-and-mortar competitors. Why buy a MacBook Air in Boston, after all, when online you’ll save nearly 90 bucks in Massachusetts sales tax? But there have long been warnings that consumers just might get ruinously addicted to the tax-free ride Amazon and others appeared to be giving them—and that states might just get, well, ruined.
I say the ride appeared tax-free: In fact, there is tax due on some online sales. Amazon and other online retailers have benefited from the lack of an enforcement mechanism. States have started taking notice, and when New York state recently attempted to fix this situation, Amazon.com took them to court—and got shellacked. The company, Manhattan Supreme Court Justice Eileen Branstein ruled last month, did “not come close” to showing that the state was wrong to demand that these taxes be collected. With millions in desperately needed uncollected revenue from online retailers at stake for the state, Amazon.com hasn’t said yet whether it will appeal.
But in the meantime, while states watch their programs for the poor go broke, the uncharitable online giant is quite happy for them to eat cake—for just $28.95 plus $9.95 shipping.