The Many Ironies of Anti-Market Bias
The French government prohibits booksellers by law from selling their wares at less than 95% of list price. Allow me to state the obvious: it’s a stupid law that protects established booksellers from upstart rivals who might otherwise attempt to gain market share by offering lower prices; it raises the prices of books, and generally screws over consumers to the benefit of politically connected corporations.
Public choice theory tells us that such a law can exist because its costs are widely dispersed over the entire book-buying public, while its benefits are concentrated on a much smaller group of companies. The harm to each individual book buyer is so small that it isn’t worth any individual’s effort to attempt to overturn the law (or even pay it much attention); meanwhile, the small group of beneficiaries has strong incentives to protect the law.
That explanation is good, so far as it goes. But how did the French Booksellers’ Union, in particular, mangage to land such a cushy deal? Why haven’t the Redheaded League and the Fraternity of Poodle Owners secured similar benefits for themselves? The International Herald Tribune tells us that
The 1981 Lang law was passed at a time when booksellers were losing sales to supermarkets and other new competitors. It was meant to assure that the French public had equal access to a wide variety of books, both high-brow and low-brow, not just heavily marked-down publications.
I trust my readers will, after a moment’s thought, see the absurdity of that attempt to justify the law. But most people aren’t really in the habit of thinking about things, and I can see how such a justification might appear plausible to people who view free markets with general antipathy — as the French (in)famously do. Weak as that justification may be, it still sounds more plausible than any I can think of for showering Redheads or Poodles with taxpayer money. That, I think, is an important reason the Bookseller’s Union succeeded where other potential rent-seekers did not.
A dreadfully ironic corollary follows from this analysis. The more strongly voter sentiment disfavors free-market capitalism, the more the likely they are to swallow the sort of bullshit explanation seen above and let their pockets be picked by rent-seeking corporations. Kinda sad, really.
Huge kudos to Amazon.com for standing up to this madness. (The French are by no means the only people in the world dumb enough to buy such BS, but news on the lawsuit against Amazon earned them my scorn today.)
I am a published author, who also runs a blog about the above quoted IHT, and who lives in France.
If you think the French law is dumb do a little investigation into the following:
the absurdly low arenthe amounts of money authors in the UK are able to earn because of royalties on heavily discounted books;
how independent bookshops in the UK have been steadily put out of business as amazon and a couple of chains control the vast majority of the high street trade;
how companies like Waterstones charge publishers to promote books in their stores;
how even the publishers regret surrendering so much buying power to so few retailers;
how all this has led to a gross dumbing down of the books on offer in the UK – if you want proof visit http://www.amazon.co.uk and check out the top 100 sellers, most of which are celeb bios, cook books or mass market fiction.
I dont think the French are quite as dumb as you think.
I’d like to extend my deepest sympathies to all the authors who wish their readers were willing to pay more and wish their retailers were willing to charge them less for distributing their work; to all the independent bookshops whose customers have abandoned them for competitors; and to all the publishers who wish retailers would advertise their books for free.
The previous paragraph, in case anyone was uncertain, was massive sarcasm. I have no more reason to care about the division of economic surplus between publishers and retailers than I have to care about how much paperclip manufacturers pay for metal. There is absolutely no reason for anyone to favor either party over the other, and it is completely unjust for the law to take sides in book deals, paperclip manufacturing, or any other freely negotiated transaction between private parties.
You claim that changes in the business landscape have caused people to read dumber books than they did previously, yet you offer no evidence that (1) people read more “low-brow” material than they did in the past or (2) that any such changes were caused by lower prices or the increased market share of large retailers. You don’t even offer a plausible story to explain why big retailers and low prices should, in principle, cause people to read dumber books.
In fact, I can think of a good reason that a market dominated by larger retailers should cause people to read more high-brow material: large retailers are better able to serve the “long tail” of the market, whereas small bookshops would tend to devote their limited shelf space to a handful of popular titles. Barnes & Noble, Amazon, and Borders all have much better science sections than any small independent shop I’ve ever seen.