"Profit" is a technical term with a specific meaning; in this context it's the money left over after paying wages, rents, interest, and investing in the business. So there's not much of the argument to understand; they get a lot of money, then they spend it, so there's nothing left to return to the investors which means by definition there's no profit.

> I never understand it when I hear such and such company has billions of dollars of cash just sitting around. If they spent that money wouldn't that help themselves

History is littered with examples of successful companies who spent large sums of money and got nothing in return. If Apple had a clue how to spend $100 billion usefully they would, but they don't. Their existing business are mature; they're selling all the phones they're making. They could build a bunch of factories and triple production, but to what end? They could start a chain of pizzerias, but why would that be a good idea?

Investments aren't fully deducted from profits in the current period. So if you're measuring profit over any finite period, investments during that period may not have been fully reflected in reduced profits. For example, if a business buys a printer this year for $500, the business's profits will not be $500 lower than if they had not bought the printer. They would likely by $166 lower (assuming 3-year straight line depreciation).

they get a lot of money, then they spend it, so there's nothing left to return to the investors which means by definition there's no profit.

You're confusing cash flow with profit. When you return money to investors, you return cash, either in the form of dividends, or in the form of share buy-backs. You don't need profits in order to return cash (e.g. you could borrow money secured on your factory, and then pay that money straight to shareholders) and having profits doesn't mean you have cash (e.g. you might have just spent a load of money on new machinery, which would reduce your cash flow without as large a reduction in current year's profits).

Only if they consider it as an asset, in which the $500 moves from the 'liquid assets' column to the 'fixed assets' column and is then depreciated away over time at $166 per year.

The other method of accounting is to immediately deduct that $500 from assets as a cost in the year of acquisition. There's then no need of depreciation or spreading over several accounting years. Any residual value gained by resale at the end of the printer's life can then re-enter the accounts by means of 'other income'.

Companies do have discretion about their own accounting policies, e.g. about whether to expense printers in the year of purchase, or over how many years to depreciate them.

Regarding your tax point, your country probably has rules about what can/cannot be deducted from profits. Complying with those rules may require a different calculation of profit. So your company's 'profit' may differ between your accounts and the accounts you use to calculate your corporation tax.

I was responding to the parent's implication that you can somehow, at a whim decide, "oh, that thing I just bought is worthless so I can deduct 100% of its cost immediately and report lower taxable profits". No, the tax laws stipulate in which cases you can do that, and you generally don't have discretion, except perhaps by taking on some other downside.

As for all these comments, sure there are companies that squandered vast sums in misguided attempts to invest in their business. And there are companies that admitted they had no idea how to invest in their business and sat on the cash. Neither of those examples are of any use in determining whether Amazon is investing wisely or foolishly.

Some analysts think that Amazon doesn't actually make money, others think they invest but invest poorly, others think they are brilliant geniuses who invest perfectly. Most of whom are at least a little bit wrong. Which goes to show that even the "experts" don't really know.

You share a feature with the author in that neither of you are economists! ;-)

I skimmed the writing to create a skeleton of the argument. The claims and solutions are wild.

No, AMZN doesn't have a "free pass to grow without any pressure to show profits." This is evidenced by investor reactions to their Q4 earnings call. Her solution is a solution in search of a problem:

  More specifically, restoring traditional antitrust principles to create a 
  presumption of predation and to ban vertical integration by dominant platforms
  could help maintain competition in these markets. If, instead, we accept 
  dominant online platforms as natural monopolies or oligopolies, then applying 
  elements of a public utility regime or essential facilities obligations would 
  maintain the benefits of scale while limiting the ability of dominant 
  platforms to abuse the power that comes with it.

http://www.catb.org/jargon/html/email-style.html

Is there a word to describe the situation when a thing gets called in a new way, because the new dominant generation is too young to remember how that thing came to be?

It's more specific than that. The argument is that investors in Amazon don't profit, because practically all of the money Amazon makes gets used either to pay employees and meet operating costs or to invest in growing the business. So what's left over for shareholders is almost nothing--yet people are falling all over themselves to become shareholders. That is the odd situation that the paper is trying to understand.

I've been having an impression that almost nobody buys shares for dividents - that almost everyone plays on first derivative, i.e. buying stocks low and selling them high.

I don't think that's a correct impression. Lots of people live off the income from the investments in their retirement accounts. If those accounts are holding stocks, the income is dividends.