FreeColorado.com, a journal of politics and culture.

Thursday, November 12, 2009

Outlawing Low-Priced Books Robs Your Wallet and Freedom

The following article was originally published online by the Denver Post under the title, "Why we should keep selling low-priced books."

Outlawing low-priced books robs your wallet and freedom

by Ari Armstrong

Some stores sell popular books to willing customers at low prices, and they must be stopped! At least that's what the American Booksellers Association (ABA) argued in an October 22 letter to the Antitrust Division of the Department of Justice.*

The letter, signed by the ABA Board of Directors, including Cathy Langer of Denver's Tattered Cover, complains that Amazon, Wal-Mart, and Target sell some "hardcover bestsellers," including books by John Grisham and Sarah Palin, for only around $9. Moreover -- horror of horrors -- Amazon sells digital books for only $9.99.

The letter argues that selling low-priced books to people who want to buy them constitutes "illegal predatory pricing that is damaging to the book industry and harmful to consumers."

You might think that "lower prices will encourage more reading and a greater sharing of ideas in the culture," but you would be wrong, the ABA claims. Low-priced books will drive out "many independent bookstores," put book buying "in very few hands," and eventually allow "mega booksellers to raise prices," the ABA asserts.

The ABA's position ultimately is self-destructive. Free speech, and freedom of conscience more broadly, depends on property rights and voluntary association, liberties the ABA undermines.

Writers, publishers, sellers, and buyers have the right to agree to terms they find mutually beneficial. A publisher that wishes to prevent a retailer from selling a book below a certain price may properly set that as a condition of the transaction.

Once a retailer purchases books from a willing publisher without pricing restrictions, the retailer properly has the right to sell the book for any amount it deems proper. If the retailer wants to sell books below cost as a loss leader, give them away, or pay people to take them, that's between them and their customers.

When politicians control the physical conveyance of ideas, they can control the ideas themselves. As a villain in Ayn Rand's Atlas Shrugged explains, "If you breathe the word 'censorship' now, they'll all scream bloody murder... But if you leave the spirit alone and make it a simple material issue -- not a matter of ideas, but just a matter of paper, ink and printing presses -- you accomplish your purpose much more smoothly."

The ABA helps establish the principle that people with guns -- for ultimately brute force is what imposes Department of Justice rulings -- can invalidate people's independent decisions. This same principle opens the door to outright censorship.

The ABA's position also rests on economic myths. Part of the cost savings of large retailers comes from publishers selling books in large orders. The ABA would force publishers and readers to eat the costs of more tiny orders.

Independent bookstores that cannot compete on price should find other ways to attract willing customers if they wish to stay in business. For example, Tattered Cover hosts many public events featuring authors and other speakers. (I spoke at a media panel hosted by the store on September 24.) Tattered Cover also carries a large selection of books that customers can physically look at and buy instantly.**

The ABA's suggestion that "mega booksellers" would eventually "raise prices" higher than what independent stores now charge is laughable. Not only will many competing booksellers remain in business despite low-priced books, but attempts to raise prices inevitably attract new competitors.

The ABA absurdly argues that low-priced books will cut off writers' ability to get published. As a book author, I can attest that writers today have unprecedented opportunities to publish their works. Amazon is particularly friendly to writers and publishers.

Tattered Cover does not carry my book, and if I had to rely on independent bookstores my book never would have been published. Yet I did not seek government action to force Tattered Cover's decisions. Tattered Cover has the right to stock the books it wants at the prices it wants, and it should respect the rights of others to do likewise.

We should expect better from the ABA and from Tattered Cover, often a champion of free speech in Colorado. Ultimately the business of ideas depends upon the integrity of the unforced mind.

Ari Armstrong is the author of Values of Harry Potter and publisher of FreeColorado.com. He lives in Westminster.

* See some of the resulting media coverage.

** November 13 update: As somebody noted in the comments, Tattered Cover now plans to sell used books as well. The Denver Post has the story. Offhand this strikes me as a good idea. The standard fee for shipping and handling for used books at Amazon is $3.99, sometimes more than the price of the book. Tattered Cover can't offer as wide a selection of used books, but the customer can physically examine the used book and get it right away with no additional transport costs.

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