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2000-2 |
LA
LIBERACIÓN DEL LIBRO. |
Pedro Schwartz |
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ABSTRACT
This essay attempts a practical application of microeconomics to the resale price maintenance by book publishers allowed by Spanish law. In Spain, compulsory education textbooks can be discounted by up to 12% by booksellers, and other books by up to 5%. Books are the only cultural goods where free discounting is not allowed. Publishers justify the price fixing system because it allows them to cater for minority tastes and protects small bookshops. This essay however suggests that the fixed price makes for a smaller number of copies and reduces sales, and implies a subsidy by authors to ineffcient booksellers. Many bookshops have forgotten what good service means and return unsold copies and pay for sold ones when they please. The fixed price system operates as a barrier against entry by new publishers and Internet booksops selling Spanish books. The Spanish Government, obsessed by the need to fight inflation, intends to exempt only textbooks from the fixed price rule, which amounts to saying that the poor do not and need not read other kinds of books. The essay concludes by criticising a policy that tries to protect culture by reducing runs, increasing prices, and forcing authors to cross-subsidise bookshops. Keywords: free competition, oligopoly, cartel, resale price maintenance (RPM), net price system., net book agreement, economies of scale and of scope, price and income elasticity, transaction costs, opportunity cost, perfect competition, entry barriers, capitalised political rent, tax shifting, commodities, brands, market share, best sellers, cross subsidies, universal service, computer aided design, electronic printing, digital books, internet, virtual bookshops, textbooks. JEL: D4, L1, L11, L5. |
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