Courtesy of Mish.
In response to my post France Vows to “Save the Bookstores”, Fixes Price of Books, Bans Free Shipping by Amazon, reader David writes …
Hello Mish,
I enjoy your columns, and agree with most of your economic analyses, but I do have a question about this morning’s entry regarding France and bookstores: namely, what are people supposed to do for their livelihoods if nearly everything is going to be done by computer and robotics?
This is the issue that Hollande, in his outdated, ham-fisted way–is getting at, and for the record, I don’t have the answer, either. The economy needs middle class consumers, but they in turn need money, which they can’t earn without quality jobs. In the past, technological development led to more businesses being created than destroyed. The same was true for quality jobs. I believe the experience of the last five years, however, has demonstrated that this linkage is impaired, if not completely broken.
Businesses and quality jobs – livelihoods – constitute the economic foundation upon which a community rests. Socialist remedies to the problem posed by hyper-automation will fail (as have socialist agendas to any problem), but raising the issue does not make one a Luddite.
David
Plight of Bookstore Owners
First let’s discuss the plight of bookstore owners. Is it really a bad thing if they go out of business?
For numerous reasons (unless you are a bookstore owner), it’s a good thing, just as is was when buggy-whip manufacturers went out of business as autos replaced horses.
For every job lost by small bookstores, additional jobs are created at Amazon and online bookstores. Is the ratio 1-1? Probably not, but it does not matter.
The easily seen (alleged problem) is bookstores go out of business. The unseen benefit is people have more money to spend on other things that they used to spend on books.
Perhaps people take in an extra movie, go out to lunch one more time, pay down debts, or simply save the money for a “rainy day”.
All things considered, there is a huge overall economic benefit of lower prices. Yet the Fed, the unions, Keynesian clowns, banks, and various bureaucrats want prices to go up.
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