Misbehaving Amazon? Or Misbehaving State?

by Don Boudreaux on January 16, 2008

in Books, Politics, Trade

In his 2002 book Creative Destruction, Tyler Cowen explains "How Globalization is Changing the World’s Cultures" — for the better.

The government of France, however, seems to be intent on slowing this process of improvement for its citizens.  Check out this post by Nate Anderson over at Ars Technica (HT Konstantin Medvedovsky):

Did you hear the one about Amazon? It offered free shipping in France,
got sued for it by the French Booksellers’ Union, and lost. Now it’s
choosing to pay €1,000 a day rather than follow the court’s order.
Ba-da-bing!

No, it’s not funny, but that’s because it’s not a joke. The Tribunal de Grande Instance (a French appeals court) in Versailles ruled back in December
that Amazon was violating the country’s 1981 Lang law with its free
shipping offer. That law forbids booksellers from offering discounts of
more than 5 percent off the list price, and Amazon was found to be
exceeding that discount when the free shipping was factored in.

Thwarting the ability of ordinary French citizens to get good deals on books makes books more difficult for French citizens to get.  France’s cultural richness is less than it would otherwise be.

Some commentors to this post take issue with identifying firms protected by the government from competition as disreputable.  I’m in the camp whose members – finding nothing especially magical, glorious, magnanimous, informed, or trustworthy about the state or political actions – hold that hiring the state to forcibly stop people from patronizing competitors at mutually agreeable prices is no different morally than hiring a street gang or your brother-in-law to do the same.

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{ 26 comments }

robert higgs January 16, 2008 at 3:01 pm

Bastiat is, again, for the umpteenth time, rolling over in his grave.

mcwop January 16, 2008 at 3:05 pm

I wonder what Voltaire would think?

shawn January 16, 2008 at 3:28 pm

as a brother-in-law, I take offense at being compared to the french booksellers' union.

Evil Anglo-Saxon Frenchman January 16, 2008 at 6:02 pm

"Thwarting the ability of ordinary French citizens to get good deals on books makes books more difficult for French citizens to get."

Exactly. But the French don't think like that because hard discount on books smacks of evil, Anglo-Saxon-like capitalism. A couple of months ago, I mentioned to a cultured French lady the fact that, across the English Channel, there were large bookstores selling books at 20, 30% discount rates, that closed at 10PM and were even open on Sundays (whereas in France most bookstores close at 7PM and don't open on Sundays). She couldn't believe it!

Jean Pâte January 16, 2008 at 6:16 pm

A few weeks ago, a group of 500 French auctioneers sued Ebay for "unfair competition".

Martin Brock January 16, 2008 at 7:43 pm

Misbehaving state. I use amazon all the time, but I feel for the small bookstore proprietors. Yes, it's just a feeling, and I have no interest in halting progress, but we are losing something as small bookstores go the way of the wagon wheel. Frankly, a decade ago, I thought the book itself would be on its way out by now, but I missed the boat on that one. I still don't think I missed it by much, but I missed it. I'll keep expecting it within a decade until it happens.

Bill Conerly January 16, 2008 at 10:00 pm

proving once again that "laissez faire" cannot be translated into French.

Mesa Econoguy January 17, 2008 at 1:35 am

Au contraire: Lebensraum.

Mesa Econoguy January 17, 2008 at 1:37 am

Sorry, low hanging fruit.

How dumb are the French/leftists?

Mesa Econoguy January 17, 2008 at 1:48 am

Martin Brock:

"Frankly, a decade ago, I thought the book itself would be on its way out by now, but I missed the boat on that one. I still don't think I missed it by much, but I missed it."

Au contraire: You've missed most things on this blog, don't feel bad, Goebbels.

Sam Grove January 17, 2008 at 2:14 am

Taxation has made consumers price conscious, hence the demise of the small retailer.

Hans Luftner January 17, 2008 at 6:24 am

Bastiat is, again, for the umpteenth time, rolling over in his grave.

Hey, if France hooked his corpse up to a generator, his perpetual spinning could power the entire country! Oh wait. That would probably violate some dumb protectionist statute.

Mark January 17, 2008 at 8:30 am

Shawn said: "the French don't think like that because hard discount on books smacks of evil, Anglo-Saxon-like capitalism."

See this very apropos article about French and Germany early eduction in economics, "Europe's Philosophy of Failure," in the current issue of Foreign Policy. It's available for free at http://www.foreignpolicy.com/story/cms.php?story_id=4095

Slocum January 17, 2008 at 8:53 am

So what are the French laws for selling used books? And what does it take for a book to qualify as 'used'? What about remainders?

And what's to prevent Amazon from demanding that French publishers lower their cover prices to match the margins that Amazon expects to realize? Or is the relationship between the wholesale and cover price also fixed by French law?

Tom Howe January 17, 2008 at 9:53 am

I too, "hold that hiring the state … is no different morally than hiring a street gang." But be careful with that. If you think about it very long, you'll be an anarchist.

vidyohs January 17, 2008 at 9:56 am

When I was a young pup, like Martinduck, I felt for those who shot themselves in the foot.

But, then I grew up, became mentally mature, educated, developed an ability to reason, read and comprehend. This was about the time I entered kindergarten.

Then I understood that one who takes a gun and shoots one's self in the foot is causing his own suffering and has the option to cease at anytime. I also recognized that as a result of the self inflicted wounds the hurting and healing would go on for a period of time even after ceasing to self inflict wounds, and not every indidivual heals equally well or as fast.

My sympathy changed to contempt.

Now to France: Call the gun the state, it is coercive force at best, and deadly force at worst.

The french individual(s) could stop using the gun, but they won't as long as they think everyone else is also being shot in the foot so that they all suffer equally. Also, they won't because they fear the hurting and healing; that has become evident in the last two attempts by the wisest of them electing men who worked to put the gun away.

So the fools (french/fools = redundancy) go from gunshot to gunshot.

It is worse than useless to waste sympathy on a fool. One is simply wise to keep fools as far away from what is important as possible. Another reason for denying the vote to 75% of the American public.

Mr. T January 17, 2008 at 10:22 am

Vidyohs, I pity da foo! Got no time fo this jibbajabba, talkin bout wastin sympathy on da foo! I don't think so sucka!

Martin Brock January 17, 2008 at 10:41 am

The ebook is replacing the book, as mp3 players are replacing CD players, in case the contemptuous ones didn't get my point. Amazon's Kindle, the Sony Reader and Bookeen's Cybook are examples based on "electronic paper", a display that persists without power and is readable in direct sunlight. Earlier devices based on LCDs weren't effective. The Kindle has too many buttons occupying too much space, but it's much more appealing than earlier devices. If you want a new book or 'zine, you download it wirelessly, wherever you happen to be. There's no subscription fee, and book prices are lower than paper books once you own the device. If you read a lot, especially on the road, it's a very attractive alternative.

Austin January 17, 2008 at 10:43 am

Mr. T, go back to your night elf mohawk and leave us be.

But the irony here is that, with such statues, it is all of France that loses, as Don points out. Funny to consider France, a supposed bastion of culture, making it more difficult to acquire literature, but there you have it…

The real loser, as almost always, is the general population.

Flash Gordon January 17, 2008 at 10:59 am

The European and British mindset comes as a surprise to anyone used to American free enterprise. I studied in London for 6 months in 1971-72. I needed to buy a lamp so went to the local furniture store. The lamp came with a cord but no wall plug on the end of the cord. I ask the store clerk for a lamp I could plug into the wall socket and he informed that I had to take my new lamp to an electrical shop to have a plug attached to the cord.

When I suggested to him that I thought it was unusual to sell lamps without plugs he took it as an odd suggestion, then explained to me that it would be immoral for furniture stores to infringe on the business of the electrical shops.

I suspect the reason the EU has a law against book sellers offering too large a discount is because the average European thinks competition is immoral. Odd-thinking people get the government they want and deserve.

John Townsend January 17, 2008 at 11:58 am

Reminiscent of the Schecter Brothers vs. NRA case (1935) detailed recently by Amity Schlaes (who was interviewed by Russ Roberts !). Their principal crime was to sell kosher chickens at too low a price !

Martin Brock January 17, 2008 at 3:00 pm

I suspect the reason the EU has a law against book sellers offering too large a discount is because the average European thinks competition is immoral.

It's not the average European. It's the capitalists, particularly the owners of increasingly obsolete capital, like these booksellers. Part of their capital is the regulation on pricing, much as a Treasury note or a dubious patent (if any are not dubious) is "capital" in the U.S.

To be fair, many of these proprietors opened book shops understanding this regulation to exist. Shouldn't we leave them regulated in the name of stability? Or does this presumption only apply to banking regulation, when we don't want to change it?

vidyohs January 17, 2008 at 3:21 pm

"But the irony here is that, with such statues, it is all of France that loses, as Don points out.

The real loser, as almost always, is the general population.

Posted by: Austin | Jan 17, 2008 10:43:06 AM"

Yes sir, I agree. I thought that I had made that clear.

France, the collective individuals, is shooting itself in the foot. All it takes for the hurt to go away and the healing to begin is for the collective individuals to stop pulling the trigger in the voting booths and to suffer the pain of healing.

vidyohs January 17, 2008 at 3:22 pm

"But the irony here is that, with such statues, it is all of France that loses, as Don points out.

The real loser, as almost always, is the general population.

Posted by: Austin | Jan 17, 2008 10:43:06 AM"

Yes sir, I agree. I thought that I had made that clear.

France, the collective individuals, is shooting itself in the foot. All it takes for the hurt to go away and the healing to begin is for the collective individuals to stop pulling the trigger in the voting booths and to suffer the pain of healing.

Michael Fisk January 18, 2008 at 8:52 am

Apparently the argument the French government makes in defense of the law is that, by keeping many smaller, more obscure bookstores in business, you allow a wider variety of books to be sold, as opposed to the mass-market stuff that tends to be found in the book section of the typical American hypermarket or department store. In this case, it's protecting small sellers, with limited capacity for stock (and, therefore, variety) against an online seller with seemingly obscene amounts of warehouse space and a book selection that (apart from some rare books) is practically exhaustive, thereby inadvertently giving the French more of the so-called "lowest common denominator" in literature that they so badly want to avoid.

The irony would be just too delicious were it not for the fact that this keeps on happening in one way or another around the world all the time…

Mesa Econoguy January 18, 2008 at 11:06 pm

Prof. Roberts interviewed Amity Shlaes?

That’s it, I’m buying The Forgotten Man……right now, dammit. On Amazon.com, for Pete's sake…

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