Amazon is a charity run by the investment community

I love this description of Amazon by Matthew Yglesias:

That’s because Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

That’s the beauty of low margins. (via @tcarmody)

• Amazon
• business
• Matthew Yglesias