Marc Andreessen Slams Paul Krugman's Attack On Amazon

Paul Krugman thinks Amazon is bad for America. He came out swinging in a recent column over Amazon’s war with book publisher Hachette.

Super investor Marc Andreessen has jumped in with a little sarcasm aimed at Krugman. That might be considered odd, since Andreessen is a board member of eBay, perhaps the only real e-commerce competition Amazon has in the US.

Krugman is siding with book publisher Hachette in its battle with Amazon. The story goes: When Amazon wanted Hachette to give it a bigger percentage on the Hachette books Amazon sold, Hachette balked. So Amazon began doing things like delaying the delivery of Hachette titles, raising prices, and steering customers to other publishers.

Krugman says Amazon is acting like a robber baron and suggests it must be stopped, just like the Standard Oil-era robber barons were stopped.

Andreessen took his shots at Krugman via the Genius website (better known as Rap Genius), a website backed by Andreessen’s VC firm, that lets people annotate lyrics, articles, literature, etc., with verified names/identities.

Andreessen took his annotation pen to Krugman’s article like this:

Krugman: … in case you’re wondering, yes, I have Amazon Prime and use it a lot. But again, so what?

Andreessen: Amazon is hurting America, but not enough for Paul Krugman to take on a little inconvenience by using other ecommerce sites. Principles!

Krugman: You might be tempted to say that this is just business — no different from Standard Oil, back in the days before it was broken up, refusing to ship oil via railroads that refused to grant it special discounts.

Andreessen: Classic Krugman rhetorical manoeuvre. “Just business” is not the same as “no different than Standard Oil”. Businesses of every shape size and description negotiate with their suppliers every day without in any way meriting a comparison to Standard Oil.

Krugman: So far Amazon has not tried to exploit consumers. In fact, it has systematically kept prices low, to reinforce its dominance.

Andreessen: Another classic Krugman rhetorical manoeuvre. According to Paul, keeping prices low is a sign of monopoly power, but of course he’d also say that keeping prices high would also be a sign of monopoly power.

Andreessen goes on to blast Krugman for a few other things. The whole annotated argument is a pretty entertaining read. Check it out here.

Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

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