David R. Henderson  

Amazon Prime's Contribution to Northern Canada

Imperialism in A Generation... What Bernanke was up against...
The consensus in Iqaluit seems to be that everyone with a credit card has an Amazon Prime membership. That's because people can often find groceries cheaper online than in local stores, despite government food subsidy programs.

"Amazon Prime has done more toward elevating the standard of living of my family than any territorial or federal program. Full stop. Period," a local principal, who declined to speak further, said on Facebook.

With an annual fee of about $80, Amazon Prime members can get free and faster shipping.

This is from Sara Frizzell, "Amazon Prime does more for northern food security than federal subsidies, say Iqaluit residents," CBC News, July 10, 2017.

This reminds me of a line that George Stigler used in a famous article titled "The Intellectual and the Marketplace":

Sears, Roebuck and Company and Montgomery Ward made a good deal of money in the process of improving our rural marketing structure, but I am convinced that they did more for the poor farmers of America than the sum total of the federal agricultural support programs of the last five decades.

I used this quote in my bio of Stigler.

See here for a slightly different version of the quote.

Stigler was such a master of the pithy one or two liner that I included a special section, titled "Straight Talk from Stigler," in his biography in The Concise Encyclopedia of Economics. And I had trouble narrowing it down to 5 such quotes.

Comments and Sharing

COMMENTS (3 to date)
Hazel Meade writes:

Reminds me of the early history of the Wells Fargo company and the Pony Express - offering express mail services far superior to what the US postal service could offer during the days of westward expansion and settlement.

Robert Pollard writes:

George Stigler was incapable of speaking for more than 60 seconds without saying something witty. I remember a class where a student asked what we would cover in the next class, and Stigler instantly responded that we would be doing responsive readings from the Wealth of Nations.

AMT writes:

But is amazon turning a profit?

The article actually emphasizes the realistic concern that it is simply too remote and expensive to ship to, so that eventually Iqaluit will be dropped as well.

This looks like more of an initial mistake by a corporation, accidentally subsidizing the remote north...not an example supporting the idea "free markets are better than government support."

Perhaps this community has sufficient demand and scale for it to work, but I'm not optimistic when residents are "baffled" that Amazon ships heavy items with no markup.

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