Is Jeff Bezos Killing Capitalism?

Tickers in this article: AMZN ARO BBY JCP KSS SHLD WMT

NEW YORK (TheStreet) -- If you asked people to describe the face of the individual most tied to the idea of destroying capitalism you would evoke images of Karl Marx, Lenin or Fidel Castro, men of distinctive features and great bluster who made no secret of their disdain.

Ask me and I see a man who is softly spoken, clean shaven, spares the bluster, lacks distinct or memorable features, although possesses a distinctive laugh and has greatly benefited from the system he is destroying. I see Jeff Bezos as the anti-capitalist who is methodically destroying the foundations that allowed the United States to thrive.

First, let's acknowledge that Amazon is an American success story. Financed by family funds and embracing technology as none had before, it survived an era that many did not and turned a concept into reality that has subsumed retailing, forcing retailers to create online shopping strategies.

Amazon will report its earnings on Jan. 30. While I don't invest with items such as price/earnings ratio in mind, I know enough that Amazon's P/E of 1,414 puts to rest the derisive comments about it being a non-profit.

But I also know no one believes in the axiom "we make it up in volume" more than Amazon, which had a 0.19% profit margin last year, compared to a sector average of 9.5%. Of 20 national retailers, only four had profit margins lower than Amazon: J.C. Penney , Sears Holdings , Best Buy and Aeropostale .

That is precisely the problem. That is how Amazon is killing capitalism in its methodic march to eliminate competition, beginning with the already wounded. As John Maynard Keynes said, "The market can stay irrational longer than you can stay solvent."

Bezos, though, isn't being irrational, as demonstrated by competitors that are slowly melting into irrelevancy. With size comes power, in this case pricing power, which to a degree has been supported by an asymmetric application of sales tax collection requirements. In essence, indirect government support undermining existing capitalist structure in support of a venture evolving toward a monopolistic or market controlling position.