Quebec consumers need to pay more for books if they want to continue to have a local book industry. So argues a coalition of organizations claiming to represent the province’s booksellers, publishers, writers and libraries, which has launched a publicity campaign under the slogan “Nos livres à juste prix (Our books at a fair price).” At issue are the deep discounts typically offered by online and big-box retailers like Amazon and Walmart, whose competition is supposedly putting intolerable pressure on Quebec’s booksellers.

The coalition modestly proposes the following compromise: discounts on all newly-released books should be capped at 10% for the nine months following their release. A committee of the Quebec legislature began deliberating on the proposal in August and Culture Minister Maka Kotto indicated that he wants to decide the matter quickly. It may be safe to say that the proposal is a good fit for the Parti Québécois’s nationalist agenda.

So consumers used to getting roughly a third off new titles on Amazon will just have to be more patient. And surely nobody would buy fewer books just because they cost more, right? Is an extra 20% on new titles too much to ask to preserve Quebec culture?

The Montreal Economic Institute, taking the unorthodox position that guilt about Quebec culture does not cancel the law of demand with respect to books, undertook to calculate the Price Elasticity of Demand according to standard models and concluded that the price increases from implementing the proposal would result in a total drop of 14% for all book sales and drop of 17% for titles published in Quebec. The history of similar regulations in Europe bears this out.

A would-be cartel looking for protection from competition can hardly be expected to take the ravings of a free-market think tank like the MEI seriously! Nor will the coalition that identifies itself as “all of Quebec’s professional literary associations” be swayed by petty considerations like the popularity of its proposals. A Léger Marketing poll commissioned by the MEI found that 65% of Quebecers rejected the proposed regulations. But common people can hardly be expected to take the long view about such things.

It is easy to mock the naked rent-seeking of the parties to this proposal, yet another echo of Bastiat’s immortal “Candlemakers' Petition” against unfair competition from the sun. But perhaps the petitioners have a point that the competition from Amazon and big-box stores is unfair. Amazon deserves an article unto itself, but suffice it to say that its dominance of the bookselling market has not been achieved without the collusion of governments around the world, and enthusiasts of free(d) markets should not be over-eager to identify Amazon as a paragon of their ideals.
 

“Books are not anti-gravity commodities. Like almost all things, the cheaper they are, the more people buy them. Anyone who earnestly wants people to buy and read more books—and not just more of his books—understands this.”

But in keeping with Bastiat’s great theme of “What Is Seen and What Is Not Seen,” we should reflect on the simple fact that cheap books are a good thing.

Books are not anti-gravity commodities. Like almost all things, the cheaper they are, the more people buy them. Anyone who earnestly wants people to buy and read more books—and not just more of his books—understands this.

To return to the complaint that launched this initiative, Quebec booksellers, like brick-and-mortar retailers everywhere, find themselves hard-pressed to compete with Amazon. Fair enough: Amazon is as “disruptive” as it gets. But they also complain about the competition from Walmart and Costco. Here an interesting detail emerges.

A Globe and Mail article about the proposal quotes a coalition spokesperson, Sylvie Desrosiers, who notes that the big-box stores offer at most a variety of about 300 titles but, by law, registered bookstores have to provide at least 6,000 titles in seven categories. This piqued my interest. Sure enough, in Quebec, anyone who wants to be accredited as a bookseller has to adapt to a raft of regulations including this one: 

“keep, for the entire bookstore and irrespective of the date on which the person was accredited, an inventory of at least 6,000 différent [sic] book titles, including at least 2,000 different titles of books published in Québec and 4,000 different titles of books published elsewhere, divided into categories the names and minimum numbers of which are listed in Schedule B.”

The big-box stores, under no pressure to label themselves “booksellers,” can bypass these regulations. Desrosiers clearly takes this to be yet another argument in favour of price-fixing. One is reminded of the joke that “there are no atheists in foxholes” is an argument for atheism, not for hanging out in foxholes. Could it be, in other words, that a lot of regulations adopted in the past—in the hopes, no doubt, of limiting competition in the Quebec book trade by making it harder for upstarts with the temerity to offer fewer than 6,000 unique titles and yadda yadda to call themselves “booksellers”—could it be that those rules have themselves made it more difficult to operate as a bookseller in Quebec?

What is not seen? Well, the cost of regulation, for one thing. But if history has taught us anything, it’s that the damage caused by one regulation can always be fixed by adding a few more…

Larry Deck is a librarian who lives in Montreal.

From the same author

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(no 312 – June 15, 2013)

▪ Indecision 2012, Quebec Version: Is Cleaner Government Possible?
(no 302 – August 15, 2012)

▪ The Housing Hustle: A Review of Matthew Yglesias's The Rent Is Too Damn High
(no 301 – June 15, 2012)

▪ Is "Capitalism" Worth Saving? A Conversation
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▪ More...

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