With Amazon stock surge, Jeff Bezos becomes richest person in the world overnight
30 October 2017
On Friday morning, Amazon CEO Jeff Bezos awoke in one of his luxurious mansions nearly $7 billion richer, after Amazon stock rose more than 8 percent as a result of a strong third quarter earnings report released Thursday. Over the course of trading Friday, Amazon’s stock value continued to rise, finishing roughly 13 percent higher than the day before, propelling Bezos’ wealth by $10.4 billion and making him the world’s richest person. His net worth now stands at $93.8 billion, a solid $5.1 billion ahead of Bill Gates.
The grotesque enrichment of capitalists such as Bezos expresses the profoundly unequal character of the capitalist system. While Bezos “earned” nearly $7 billion practically in his sleep, tens of thousands of Amazon warehouse workers around the world assigned to graveyard shifts labored under sweatshop conditions, gearing up for the “peak season” of high volume sales during the upcoming holidays.
It would take the average Amazon warehouse worker in the US earning $12 per hour roughly 416,667 years to earn as much money as Bezos did in less than 24 hours. Or, to put if differently, Bezos reportedly made more money in a single day than his entire global warehouse workforce of over 300,000 employees earns in a year.
In a rational society organized along socialist principles, the wealth funneled to Bezos would instead be put to use for the benefit of society as a whole. With $10.4 billion, clean water and sanitation could be provided to the entire world’s population, roughly 40 percent of which lacks access to these basic human necessities.
The real source of Bezos’ wealth stems from exploiting the labor of his workers, who are currently facing intense speed-up and exploitation as Amazon begins stocking up its warehouses prior to the Cyber Monday and Christmas holidays. The company is engaged in a hiring frenzy of thousands of part-time and temporary workers, many of whom will be fired around the start of the new year.
Workers that have spoken with the International Amazon Workers Voice (IAWV) have shared stories of being worked beyond the point of physical exhaustion, with many reporting incidents of heat stroke and a range of muscle injuries occurring at their facilities. Two workers in the US were killed on the job in September as a result of these speed-up policies.
Amazon’s stock—and thus Bezos’ net worth—rose in response to a third quarter earnings report that surpassed investors’ expectations. The company reported $43.7 billion in revenue, $1.6 billion more than analysts had predicted. They also posted earnings per share at 52 cents per share, much larger than the predicted 3 cents per share.
Revenue was 34 percent higher than the third quarter in 2016, as Amazon finalized its acquisition of Whole Foods in August and reported $1.3 billion in grocery sales from the company. Total North American sales were $25.4 billion, 35 percent greater than last year, while international sales grew 29 percent to $13.7 billion.
Another significant influence on Amazon’s soaring stock value has been its recent announcement of plans to build a second headquarters (HQ2) in North America. The company is being courted by 238 cities from across the US, Canada and Mexico, with incentives ranging from the quasi-illegal to grotesquely fawning. With every bid, city officials have offered the company immense tax breaks and government subsidies, and the lowest operational and labor costs possible, plainly demonstrating the subservience of the state to the interests of private profit.
In a move to attract Amazon, the California state assembly recently introduced legislation that would grant the company $1 billion in tax breaks over the next decade. To lure the company to New Jersey, the state has offered $7 billion in potential credits against state and city taxes. Perhaps the most sycophantic bid came from the mayor of Stonecrest, an Atlanta suburb, who offered to create a new 345-acre enclave city called Amazon, where Bezos could rule as mayor for life!
Canadian Prime Minister Justin Trudeau recently hand-wrote a letter imploring “Dear Jeff” to choose a Canadian city for HQ2. Trudeau hailed Canada as home to a “deep pool of highly educated prospective workers” and “stable banking systems,” while highlighting the fact that Canada “enjoys a universal health care system,” which would enable Amazon to save the costs of paying its employees health insurance.
Beyond his control over Amazon, Bezos exerts immense influence on American political life through his ownership of the Washington Post and through his connections to the Democratic and Republican parties. Through Amazon and the Washington Post, and in particular following a sordid 2013 deal between Amazon Web Services and the Central Intelligence Agency, Bezos has become deeply connected to the American intelligence apparatus. He sits on the Defense Department’s Defense Innovation Advisory Board, which regularly meets with the Secretary of Defense and other leading figures of the American state. US President Donald Trump has also included Bezos on his American Technology Council, a panel of tech executives intended to advise the President.
As a result of Amazon’s growth and Bezos’ connections to the state, he has made $71.3 billion in the past five years, most of which came during the Obama presidency. Since the inauguration of Trump—in which he issued his bellicose, America First agenda—Bezos’ fortune has risen by $23.6 billion alongside a broader stock market boom that has immensely benefited the entire financial oligarchy.
While Bezos is perhaps the most obscene example of personal enrichment today, he represents a broader social layer that has amassed unfathomable wealth in the recent period. The recently released annual Billionaires Insights report by Swiss bank UBS and PricewaterhouseCoopers (PwC) found that the total wealth of the world’s billionaires rose by 17 percent last year. The combined wealth of these elite 1,542 individuals grew by nearly $1 trillion last year, surpassing a total of $6 trillion.
At the opposite pole of society, the great mass of the working class faces ever deepening poverty and the elimination of the most basic social services. According to a recent report by the US Federal Reserve, the bottom 90 percent of the American population saw its share of the total wealth decline from 25 percent to 22.9 percent from 2013 to 2016. The bottom three quarters of the population now owns less than 10 percent of all wealth.
Beyond the instinctive contempt felt toward figures like Bezos and all the other plutocrats, workers must fight to fundamentally transform the underlying social relations that give rise to such conditions. Through their collective labor and mastery of the processes of distribution, Amazon workers possess an immense potential to transform society for the benefit of the entire working class. To do so, they must begin by establishing connections within and between their warehouses through the formation of rank-and-file workplace committees, which can then be geared toward mobilizing the entire working class in a struggle against capitalism.