Paradox of the Monopoly Hater


Some time back, I read this article in the Guardian on the pricing of eBooks v/s physical books. The argument was something like this: the value of the book, physical or electronic, is almost entirely because of the content ("text itself"). If you agree with that (and I can’t see who can disagree with it), then the article said that “the delivery method shouldn't matter much”. So, the article argues, the price of an eBook should be the same as the price of the physical book (after all, isn’t the content the same?).

The conclusion part, I don’t agree with at all. Because the article confuses 2 different things: value and price. Conventional, prehistoric thinking would suggest the two are the same. But, on the Internet, do you pay for Wikipedia or Google? And since you don’t, does that mean you don’t value those 2 sites?!

Then that article goes after Amazon, accusing them of using their monopolistic position to drive down the price of eBooks so that they can promote sales of their electronic reader, the Kindle. I am not sure what the Guardian is so pissed off about: sounds like just any other plan that companies come up to make money to me!

But it’s the closing line of that article:
“Was it wise to allow (italics mine) a situation in which a single company – Amazon – became market leader in terms of both a digital product (the ebook) and the hardware through which it's delivered?”
that just took my breath away.

“Allow”? Who exactly allowed Amazon to grow to what it is? That’s such a socialistic way of thinking: you know, the “Monopolies are always bad by definition, their actions are irrelevant to any such conclusion” mindset. This type of thinking ignores the fact that companies like Wal-Mart, Big Bazaar, Total etc actually drive down prices that the end consumer pays. So when the socialists rant against the Big Bazaar’s and Amazon’s of the world, it’s kind of a paradox: they are fighting against the low price the end consumer pays.

Me, I’m glad that Amazon opened shop in India recently under the brand junglee.com. There are so many movies and books that only Amazon seems to have. And usually it’s cheaper than the price I’d pay in any physical bookstore. So if the Market Gods “allowed” Amazon to dominate, I am not complaining.

Comments

  1. KumarFebruary 19, 2012 at 8:13 AM

    You are right. In what way can we establish methods of correlating content with pricing?

    We must understand only this implication in these kind of arguments. We live in a commercial, competitive, and - whether we admit to it or not - in a world with the attitude "edge-the-other-fellow-out-by-any-means". These expressions are the insignia of defense along the 'somehow survive' pattern.

    Many of us may not know that the whole of ancient education came free to the people. Why, till a decades back, drinking water was free - there was no price on it. So things change and price depends on society's ways and attitudes.

    As far back as 40 years, the USSR would sell their communist propaganda books dead cheap all over the world. Along with that lot, some interesting, science, art and such other books would also emerge - at very low price. Some had worthy content, some not. Price had nothing do with what was inside.

    Even today, the Bible or the Koran can be got at low price or even free, since there is vesting interest of spreading religion.

    What is economics but human mind's projection!

    ReplyDelete

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