William Watson: We need Amazonian productivity improvement

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFP CommentWilliam Watson: We need Amazonian productivity improvementLots of people don't like Jeff Bezos' company but it's a wonder of efficiency and service. The rest of the economy needs Amazonian methodsLast updated 19 minutes ago Logistics and retail are services. Traditionally they were very labour-intensive, too. But Jeff Bezos and others revolutionized them, becoming very rich in the process. Photo by SEBASTIEN BOZON/AFP via Getty ImagesWhen Paul Simon wrote “these are the days of miracles and wonder” for the “Boy in the Bubble” track of his classic 1986 album Graceland, he didn’t have Amazon in mind. Amazon hadn’t been invented yet. Jeff Bezos was 22 years old, just-graduated from Princeton with a bachelor of science in engineering. He didn’t co-found Amazon until 1994, when he was 30 and senior VP of a hedge fund, which he left to open up the new business in the now-famous rented garage in Seattle.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountLots of things in 2026 qualify as miracles and wonders: mRNA vaccines, catchable and reusable rockets, routine joint replacements, smart phones, drones (for good and ill) and a long list of others. The other day a column of mine appeared on the Apple News feed no more than 10 minutes after I filed it to the National Post’s press system. That’s kind of miraculous.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againBut Amazon surely qualifies. You order something at 10:30 at night and it arrives the next day — before noon the last time I did that. You usually have tons of options to choose from and you get customer reviews to tell you an item’s strong and weak points. Amazon’s not perfect. It once sent the wrong version of an item I had ordered. And once an order didn’t show up at all — though getting a refund was quick and easy. As are returns.With Amazon Prime shipping is free and, a weird product tie-in, you also get access to basically all the music ever recorded. Plus there’s a TV and movie streaming service. You get a complete online record of your purchases. (It tells me I’ve been using it since 2009.) And it keeps reminding me I’m not taking advantage of its free podcasts.Because I buy books through Kindle, it offers me deals on the kind of things I read. The other day it offered me the complete Harvard Classics for $1.99. The Classics are themselves a classic, five shelf-feet of books published in 1909-10, edited by Harvard president Charles W. Eliot. Kindle says my $1.99 gets me 43,958 pages and that “due its large file size, this book may take longer to download.” Yes, I could go to a library and read all the Harvard classics. Or even download them free from a library. But having them on my phone — my phone! — or tablet is so much easier.If I’d described such a service to you 40 years ago, when Graceland came out, I suspect you would have been skeptical. I would have been. Yet here it is. People say that the way technology was changing in the 1990s Amazon was just waiting to happen. Someone was going to figure it out. Jeff Bezos just had great timing. Well, yes, but Bezos got it going when millions of others didn’t, and lived through many years of losses, when people kept telling him it wasn’t going to work, until profits, quite large ones, began coming in. So more power to him. Around here, oligarchs get that way by doing tons of neat things.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.In my admittedly not very large circle, Amazon tends to be a guy thing. Males love it: Jeez, we say, you can buy almost anything and it comes almost instantly. (We also like Bezos’ penchant for rockets and space.) Women tend to be cooler, seeing Amazon as too big and too American (its products too Chinese), and not liking Bezos dumping his wife for someone slicker.But there’s no denying it’s a marvel. The amazing Amazonian efficiency it has brought to retail is something we could sure use in other parts of the economy. It cost me $250 the other day for a plumber to come by and tell me he couldn’t do the job I needed done. If I want to get a blood test, registering online is very convenient but no appointments are available in the next month. After years of not having a family doctor, I’m now registered with a local group practice but they tell me don’t just make an appointment: phone ahead for permission.I’ve spent most of the summer watching a nearby construction project, the inside and outside renovation of a small backyard extension. The workers do use nail guns and laser levels, which presumably improve their productivity, but what a tedious process it is! Measure, cut, hammer. Measure, cut, hammer. Time and time and time again. The way we do them, residences are effectively handmade.As the economist William Baumol showed in the 1960s, because labour is so productive when it’s working with machines its price is high, which means the price of services that use labour intensively is high. Traditional house construction is very labour-intensive — and therefore very expensive.The funny thing is: logistics and retail are services. Traditionally they were very labour-intensive, too. But Jeff Bezos and others revolutionized them, becoming very rich in the process.If other Jeff Bezos-types could get into health care, construction, government and lots of other very high-cost activities and figure out how to make them Amazon-efficient, I’d be more than happy to see them become rich as Bezos. Croesus, even.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.