iCreative Destruction

by Don Boudreaux on April 16, 2011

in Books, Competition, Creative destruction, Seen and Unseen, Video

Not long ago people complained that Borders and Barnes & Noble were causing independent book retailers to shut their doors.  Now Rep. Jesse Jackson, Jr. is warning that the iPad and other e-book readers are hurting Borders and Barnes & Noble.‘  (HT Charlie Frey and Nick Mueller)

The jobs they are a-changin’.  Competition and progress are like that.

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Daniel Kuehn April 16, 2011 at 10:20 am

And Borders no longer has any doors to close.

Sam Grove April 16, 2011 at 11:35 am

I think they aren’t all closed yet.

Jack of Spades April 16, 2011 at 11:39 am

I went to a Borders just last week anticipating the opportunity to snatch up books an a steep discount. As it turns out, I was one day too late for this particular one – it was just rows of empty bookshelves.

Justin P April 16, 2011 at 1:45 pm

The only boarders in Syracuse closed a few weeks ago. I got a few Sowells, Rollback by Woods, This Times its Different, and my wife got a few cook books all for less than $100. And now that I have a Xoom, I can get ebooks from both Barbes and Amazon.
Creative destruction is great for consumers.

Daniel Kuehn April 16, 2011 at 3:17 pm

I went to one Friday morning… did it two weeks ago or so and there was still OK selection, but it was eerie yesterday. It wasn’t completely empty, but about five books per shelf, all faced out, and lots of furniture for sale.

E.G. April 16, 2011 at 4:03 pm

Think of all the workers that were laid off. I hope they were Union members.

J.B. April 17, 2011 at 4:48 pm

They are keeping some open. We had one in our area close, but they kept the other open with business as usual, no discounts.

Ad Libertad April 16, 2011 at 11:46 am

This is only a month after Jackson proclaimed that all students in the US should get an iPad: http://thehill.com/blogs/floor-action/house/148879-jackson-an-ipad-for-every-schoolchild

Krishnan April 16, 2011 at 12:17 pm

He (and his like) will say anything, at anytime, for any reason – as long as he (and his like – i.e. politicians) can raise money and keep their power to raise even more money and grab even more power

John V April 17, 2011 at 10:24 am


vikingvista April 16, 2011 at 11:58 am

Innovation and competition are so hurtful. There ought to be a law against them.

Krishnan April 16, 2011 at 12:16 pm

“A Moratorium on Brains”

The vote in Congress will be overwhelming – For such a legislation.
Donald Trump is the latest id&^t yelling and screaming about starting a Trade War with China and imposing tariffs and so on … He may be the ideal candidate to sign a legislation that states that “Companies are not allowed to innovate if it results in lower prices for goods that may be made in the US or elsewhere”

SheetWise April 17, 2011 at 4:40 am

“Donald Trump is the latest …”

It is a sad state … how could such an idiot be the pick of the litter?

Don? Ron? Do you hear your country calling?

vikingvista April 17, 2011 at 10:09 pm

How could he be the pick of a litter of idiots?

Dan April 16, 2011 at 3:23 pm

Legislation imposing new costs on e-books should be imposed, protests organized on the impact to the ‘poor’ (which has a disparate impact on minorities), tariffs, a piece of legislation called dem-a-pad (mandating purchase of tablet readers to subsidize purchasing of units for the poor)(women, children, elderly will be dying in the streets), immediate unionization of book store workers to collaborate for workers rites…….. Do u not see how this will effect millions in the printing and resale and destroy the middle class?

Ken April 16, 2011 at 12:29 pm

I know this isn’t news around here, but the ultimate impact will likely be the creation of more jobs, particularly for authors. I have started teaching eBooks as a case for value chain analysis and management (long way to go before I get it the way I want it). The implications are staggering, from a marketing strategy/strategic policy standpoint.

Interesting side note about the eBook revolution: A good editor can add considerable value to a manuscript: consider the originally published and “author’s cut” editions of The Stand (at least in my opinion). However, editing is time- and labor-intensive, and skills are heterogeneously distributed because we don’t teach English in the publik skools (nor much of anywhere else, seemingly) any more. Many of the authors empowered by the removal of the gatekeeper (the agent/publisher network) don’t have the resources to pay an editor a sizable hourly rate up front. Editors may have to shift to a price structure involving a smaller fee and a piece of the action (shared risk/reward). I’ve done some freelance editing, and I’m sure thinking about it.

Krishnan April 16, 2011 at 1:36 pm

I agree … As barriers to publish and distribute go down, there will be those that offer their expertise for a price that the author can afford and there will be a market for that product – A good product will survive, a bad one will not – The role of the teacher will also be important – perhaps critically so … Those that are learning some subject matter for the first time will need guidance on what is available out there – since “free” does not mean “good” or even “acceptable”

W.E. Heasley April 16, 2011 at 12:38 pm

“Ironically, it was only last month that Rep. Jackson was promoting the Apple iPad and Amazon on the House floor”.

Ironically from the root Irony: a manner of organizing a work so as to give full expression to contradictory or complementary impulses.

Ignorantly from the root Ignorant: lacking in knowledge or training; unlearned.

Ironically -or- Ignorantly? We report, you decide.

Cyril Morong April 16, 2011 at 12:49 pm

Now if only this creative destruction stuff would work on Blockbuster

Dan April 16, 2011 at 3:25 pm

Can u say Netflix or red box?

Cyril Morong April 16, 2011 at 9:26 pm

You mean even this evil empire, too, succombed to competiive forces? Surely we need to do something about the giant TimeWarnerAOL. Once they merged, they controlled everything. But seriously, I recall when they merged liberals issuing dire warnings about how this would be bad for the consumer

WhiskeyJim April 16, 2011 at 1:28 pm

From our first days as a nation, we have put our faith in free markets and free enterprise as the engine of America’s wealth and prosperity. More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.

But we also believe, in the words of our first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves. We recognize that no matter how responsibly we live our lives, hard times or bad luck, a crippling illness or a layoff, may strike any one of us. “There but for the grace of God go I,” we say to ourselves, and so we contribute to programs like Medicare and Social Security, which guarantee us health care and a measure of basic income after a lifetime of hard work; unemployment insurance, which protects us against unexpected job loss; and Medicaid, which provides care for millions of seniors in nursing homes, poor children, and those with disabilities. We are a better country because of these commitments. I’ll go further – we would not be a great country without those commitments.

And so to provide jobs for everyone and truly grow as a nation, we need to immediately do two things which will increase our security and productivity. First, we must institute a national ID program for the Internet. A centralized cache of names and identification administered by the federal government is the perfect method for ensuring the privacy and security of our citizens, and immunity from those hackers who would take advantage of Internet surfers everywhere. In addition, centralizing sensitive information is the perfect vehicle to both increase safety and adaptability to the ever changing technology that thieves and ne-er do wells utilize to track your movements and steal your identity.

Second, we must immediately make illegal all ipads, book readers and other forms of electronic substitutes for books. Doing so will instantly create thousands of jobs for Americans, including forestry (which is a renewable resource), paper processing, retailing and teaching. Simple legislation like this is a perfect example of how government has acted through the centuries to provide security for our citizens and make the commitments that make us a better country.

Dan April 16, 2011 at 3:28 pm

Also, too, we must immediately impose protective trade barriers, which will increase consumption of domestically produced products. Then we should build a choo-choo that goes all the way out to Kaleefornee……..

E.G. April 16, 2011 at 4:02 pm

You had me going there up to the second paragraph. I had to double check the name of the writer to make sure it wasn’t muirgeo or Daniel Kuehn. But then I got the joke.

“More than citizens of any other country, we are rugged individualists, a self-reliant people with a healthy skepticism of too much government.”

Unfortunately I get the feeling this is long long past the tipping point. Just as an example of where we have come to…look at the people who vote for Jesse Jackson Jr.

Ron H. April 16, 2011 at 10:00 pm

You are forgetting how valuable e-book readers are, in that e-books can be corrected on the fly as soon as the information changes at the Ministry of Truth.

WhiskeyJim April 17, 2011 at 2:50 am

LOL. I should have put that in.

BTW, The first two paragraphs are the opening remarks of Obama’s budget speech. The 3rd paragraph is his latest real proposal. The third represents his Keynesian thinking.

Whenever he speaks, I look for indications he means the opposite of what he is saying. As they say, he has a gift.

indianajim April 16, 2011 at 2:06 pm

You forget that Reverend Junior knows the Truth: This “Kneel before Zod” spoof jives with Rev. Junior’s perspectives:



vidyohs April 18, 2011 at 8:47 am


Honesty is appreciated at the house of vidyohs.

Martin Brock April 16, 2011 at 3:50 pm

Jackson clearly understands the creative destruction involved in the IPad’s displacement of jobs in the dead tree publishing business. He’s not suggesting any program of protecting these particular jobs. He is suggesting that the Congress “do something” to create new jobs, because he doesn’t understand the “creative” side of “creative destruction”.

The Congress didn’t create IPads or Galaxy Tabs or Kindles. These devices could result in a net loss of jobs, in the short run, but Congress didn’t busy the people creating these devices. Why suppose that Congress must busy people displaced from their business by these devices? People can (and routinely do) find new ways to serve one another without instruction from the Congress.

paulroscelli April 16, 2011 at 5:48 pm

Sadly, this guy’s as dense as his dad. Ipads didn’t kill jobs at bookstores–we did when we made the choice to get our information delivered in a different way. And where’s the conversation about all the jobs the ipad creates? Who does he think creates e-versions of all the traditional print info–elves?

Chucklehead April 17, 2011 at 2:26 am

Jobs are not the property of the worker or even the employer, they belong to the final customer.

Dan April 17, 2011 at 3:40 am

Quite e few people making money by creating apps for these devices. Consider how little the overhead is? Office space? Backyard patio table, sometimes the bed.
Materials? Computer and tablet device?

Dr. T April 16, 2011 at 6:23 pm

The biggest problem facing the book publishing industry is that they decided years ago that editors were not needed to weed out the crap. Novels now are mostly garbage: bloated, boring prose; illogical and inconsistent plots; combinations of poor character development and unlikeable protagonists. Nonfiction is in better shape, but the bulk is also garbage: worthless “how to” books, worthless “feel good about yourself” books, worthless “understand your spouse/boss/children” books, trashy biographies of people famous for being famous, harmful fad diet books, and heavily slanted political screeds that paint opponents as amalgams of Snidely Whiplash and Adolph Hitler.

The book industry has followed in the footsteps of the music industry. The barriers to entry are low (since real editors are scarce), and the mediocre now swamps the good. Profit margins in the music and book industries are declining due to electronic distribution. However, high prices for electronic versions generate increased piracy. Both industries will become like broadcast TV: profitable only when churning out crap that appeals to Joe and Jane Sixpack or Tom and Tina Teenfad.

tkwelge April 17, 2011 at 5:46 pm

Elitism, thy name is Dr. T.

Dr. T April 17, 2011 at 6:31 pm

If not liking mediocre entertainments makes one an elitist, then I gladly accept that label.

MIchael E. Marotta April 16, 2011 at 7:00 pm

Living in Ann Arbor, I would like to see the creative side of Schumpeter’s model. Rather than wait, my wife and I are voting with our feet and leaving this one-party socialist city. In the mean time, I am reading to review for a journal, The Invention of Enterprise Landes, Mokyr, and Baumol eds., Princeton 2010, which was recommended on “Organizations and Markets.” It provides much think about.

First, in deference to Hayek, generalizations are easy to make and hard to prove. Entrepreneurship is an individual expression. Nonetheless, the forms available depend on social contexts. Babylon, Rome, Bismark’s Germany or the Third Republic or the USA then and now, not just any “will to entrepreneurship” is a known path to success. While some are successful within their contexts, others vote with their feet to find places where a rich culture of enterprise rewards its members who find connections within their community.

Ann Arbor is not one of those. Borders’ problems follow on the exodus of Pfizer and the demise of the automotive industry.

Theoretically, the Internet lets anyone be anyplace. Borders did not need authors to live in Ann Arbor in order to sell their books. Now, iPad rewards the same works via other channels. True though that is, location still counts.

Ken April 16, 2011 at 7:53 pm

Is that Landes of The Wealth and Poverty of Nations fame? That, and Tolkien’s The Lay of Sigurd and Gudrun, were the second and third eBooks I bought, as opposed to getting free from Gutenberg, Mises, or the OLL. (The first was Barnett’s Restoring the Lost Constitution.)

Observer_Guy1 April 16, 2011 at 7:04 pm

This simply underscores the urgent need for pols to stop pretending to be economists.

The Albatross April 16, 2011 at 7:10 pm

Uhh, didn’t someone, like say, that 10 years ago, 25 years ago, 50 years ago, 100 years ago, 500 years ago, several thousand years ago? If I remember right Plato didn’t like writing because it threatened memorization; Chaucer and Shakespeare were condemned for catering to Joe and Jane sixpack. I do love how yesterday’s garbage turns out to be today’s culture. In other news, Garrison Keillor is not funny (just because you feel sorry for him because he is about to pass out and that if you don’t laugh everyone else who doesn’t get it will think you are a moron), and also Gilbert and Sullivan sucks too, which will forever eliminate the lighter side of PBS. Thankfully, as capitalism has provided me with multiple channels, I will never lack for culture, but as tax time is upon us, perhaps I can find Triumph of the Will and reflect on how bad things could be and remind myself how much better a person I am than the average statist.

Brad Hutchings April 16, 2011 at 9:02 pm

Looks like Tim Conway Jr. (son of legendary comedian Don Knotts, er, Tim Conway) has a new show concept for Wednesday nights: What the hell is Jesse Jackson Jr. talking about?

vidyohs April 16, 2011 at 10:27 pm

Benjamin Franklin said, “The best way to make a friend of a man is to ask to borrow one of his books.”

When we all have Kindles and IPADS will we still be able to make friends?

indianajim April 17, 2011 at 12:52 am

Sure; many will read more of the same books and then blog about them, making many more friends than Franklin would have believed possible!

Dan April 17, 2011 at 4:56 am

I still find more value in print than digital. Power goes out, and ebook is no more.

Seth April 17, 2011 at 10:12 pm

Plus, you can still read books at the beginning and ending of flights. That’s a good 20 – 30 minutes (total) of prime reading time lost with one of them new-fangled gadgets. It’ll be nice though when they fix that.

dan April 17, 2011 at 10:17 pm

print won’t go away, only be in more limited supplies, as digital will be in greater demand and print is more costly. There is the danger of lost material and had copies will be necessary.

tkwelge April 17, 2011 at 4:58 am

I already have friends urging me to buy a kindle so we can share ebooks.

vidyohs April 17, 2011 at 1:25 pm

Ahh, but that is not making friends, that is continuing friendship.

tkwelge April 17, 2011 at 5:47 pm

I’m also being introduced to friends of friends whom I’ve never met before. WHy is everything a debate with you people!

vidyohs April 17, 2011 at 8:50 pm

This “people” only has what you write to read, understand, and reply to, if you see a problem with that, then look first to what you write, not to the response.

But crap, I have to live in the real world of America, tkwelge, as it has been enculturated and inculcated.

It’s not your fault that you’re misunderstood because of poor expression, it is my fault. George Bush knew, and Reagan’s trickledown economics was bullshit, Obamacare is the saving grace of civilization, and I am just an asshole for even pointing out that your one was not the other of which I spoke.

Bless you my child, I owe you, and you’ll get my payment after it has been funneled through various greedy government agents.

ben April 17, 2011 at 2:15 am

What a hypocrite Mr Jackson is. Not only does he promote the product he then quite incorrectly laments for costing Americans jobs (redistribute is closer to correct), he no doubt enjoys the benefits of motorised transportation that displaces millions of horse owners, trainers, and manure sweepers. He wears a suit of cotton that displaces thousands of polyester manufacturers. When he eats cornflakes for breakfast, he joins many others in displacing thousands of rice bubbles makers. His very existence redistributes jobs in the US economy.

Thus, Mr Jackson is at once a hypocrite and trivial: every pattern of consumption denies thousands of jobs to people that would have existed were consumption different. We know the world is a better place with the iPad in it than without people people, acting individually, have selected its combination of benefits and costs over the many other ways books can be distributed. The financial distress of B&N and Borders, which will eventually lead to the redistribution of some or all of their assets to other more productive uses, is a benefit, not a cost – although a benefit not enjoyed without any cost.

Chucklehead April 17, 2011 at 2:38 am

Boarders closes, yet Banes and Knoble still lives on campuses across the country selling t-shirts and Under Armour. Is it the captive audience that has spared their destruction, or larger markup of text books?

Dennis April 17, 2011 at 9:31 am

With all of this new literary innovation, I believe that now is a good time to relieve the taxpayer of the public library tax burden.

Hunter B April 17, 2011 at 10:29 am

As a writer, photographer and grad student, I can say without much doubt that the iPad and other eReaders have put countless people I personally know either to work or back to work in ways that were never before possible. I’ve edited over 50 eBooks to date that would never have existed without digital media publishing. Only one of these books exists as a print edition and that was published as a direct result of the digital edition. Authors now more than ever have unprecedented access to publishing.

We are getting a lot of chaff with the wheat as it were but as the new paradigm takes hold we’ll have more voices than ever before available for public consumption.

I have open access to countless more written material than ever before through my handheld devices, including titles that I have never seen in any book store or public library and all without visiting either institution.

My photography is being published within a few months in a hardback book that will exist a luxury item achieving a far greater price point than it may have in the past as now, physical books are already assuming a greater position as a prestige item.

For years the health of our students has been debated with regard to heavy loads of printed material. Children as young as 5 and 6 years old have been commonly seen carrying ridiculously out of proportion backpacks and go to school looking like little herds of flight attendants.

Colleges in particular artificially inflate the cost of textbooks based on hegemonic publishing practices and the digital paradigm offers a radically lower overhead as well as instant access and an end to the hours spent waiting in lines at campus book stores and an end to shortages of textbooks due to stocking errors.

Just last month an acquaintance of mine purchased a small block of ISBN numbers and with less than a $1000 dollars in overhead costs and is poised to become an entrepreneur capable of working from home both own his own business and eliminating the costs of commuting and reducing his family need and cost for childcare while spending far more time at home helping raise two children.

The kind of short sighted display by our political leaders demonstrated by this buffoon can hardly be called leadership. You wold think even on simple environmental level the communities that suffer terrible pollution from paper mills that provide only a relative handful of jobs would be enough to wake up someone like this “representative” that hardly represents the best interest of anyone let alone the constituency he speaks for.

Digital media represents not only countless new jobs but greater access to information by anyone who even owns a simple smart phone than at any time in our past and all driven by good old fashioned market demand structures.

If there is one single industry that threatens progress, jobs and the public good more than any other, it is the industry of career politics. As has been said by many others, we need more statesmen and fewer politicians.

Jim April 17, 2011 at 2:07 pm

I believe you are describing the true face of emergence.

It is messy. It is much less controlled. We only imagine how much so few editors of major publishing houses decide what is good for us. We have only a vague idea of how traditional editing constrains various genres and topics.

As a related example, I notice the NYT recently re-categorized many conservative pundits’ non-fiction in a smaller category which takes them off their best seller list where they were dominating.

The largest issue with emerging publishing freedom other than the helping hand of editors is one of marketing to find their broader audience. There are two hurdles; effectively utilizing social media to find readers and overcoming initial reluctance to purchase outside traditional media channels which probably involves preconceptions of lack of quality.

These concerns represents opportunities for entrepreneurs to overcome. As they do so, a tipping point will invariably threaten the barely tenable current publishing model.

WhiskeyJim April 17, 2011 at 2:14 pm

The second half of your post illustrates a significant point regarding global warming.

IF global warming was threatening the planet’s existence, and IF politicians were serious, the answer is not more taxes. The first answer to our impending doom would be re-zoning to allow less commuting, and a change in building codes to allow more efficient housing which has been available for decades. Those two expenditures represent a significant portion of our energy use.

But of course they don’t cost anything to implement, and represent unwinding government, not making it larger.

Dan April 18, 2011 at 11:10 pm

This industry, as with others, in it’s tranfomational stages, is and should be with others, forbidden from govt interjection.

Chicagoan April 17, 2011 at 1:08 pm

What can you expect from the guy who admittedly tried to buy Obama’s Senate seat for $1 million?

SheetWise April 17, 2011 at 3:53 pm

Only a little over twenty years ago, producing a book required a professional typesetter working from the authors copy, a skilled camera operator to produce the negatives, a highly trained stripper to do the layout and imposition work, a platemaker to produce the printing plates, a press operator to print the signatures, and an army of bindery operators to fold, collate, stitch, score, glue, and trim the final product. The product then had to be shipped and inventoried at all locations it was offered for sale.

Today it can all be done on a computer console — and when we want a book we simply push a button. Printed, bound, and trimmed — never touched by human hands.

And this moron is concerned about iPads. Why not scribes?

Ken April 18, 2011 at 10:16 am

Yeah. What about the guy down the street who lost his job when Palimpsests”R”Us went out of business?

Dan April 18, 2011 at 11:07 pm


Ken April 19, 2011 at 10:53 am

Sorry. A palimpsest was a layer of clay laid over an existing clay tablet, sort of like adding ledger pages to a three-ring binder.

Ken April 19, 2011 at 10:54 am

Or a manuscript page from which the writing is scraped for reuse.

SheetWise April 19, 2011 at 8:38 pm

Primitive “paper” recycling.

John H April 17, 2011 at 7:34 pm

You know what’s interesting about the electronic revolution in literature might actually bring a resurgence in the more local and colorful book stores. the convenience that barnes and noble sells is outmatched by ebooks but people will still want to walk through bookstores every once in a while.

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