Mish has a price on his head in France so he can be excused for going over the top regarding that country. I agree with him 94% of the time, so on the rare disagreements, I like to highlight the differences.
Mish is a devotee of Austrian economics, and he has made a tremendous contribution to the field. While Schiff, North et al were all predicting hyperinflation based on Austrian analysis, Mish pointed out there the unprecedented introduction of lending credit off balance sheet suppressed inflation, and hyperinflation was not going to happen. And if I recall, Mish suggests what we will see before hyperinflation is deflation due to credit destruction.
Now, people are coming around to this notion, and it can all be traced back to the 1971 Nixon cutting loose from the Bretton Woods “gold standard lite.”
That the destructive bank practice of off-balance-sheet lending of credit is now well known and recognized is largely due to Mish, I believe. Recognising the implications is above my pay grade, but my claim to fame in all of this is to have discovered the time, place and means that the practice was disseminated. It was promoted in the banking industry back in 1982. On this I have blogged, and it will be the heart of a book I am writing.
So Mish is exercised on the French treatment of Amazon:
Under "unfair competition" laws France has decided it is far better for consumers to pay full price for goods than to receive a discount. Striking out at Amazon, France passed a law dubbed the "Anti-Amazon Law", that banned free shipping. Amazon's response was to charge a penny, but sadly it can no longer offer discounts on books.
The Wall Street Journal reports Amazon Shelves French Book Discounts. Amazon.com Inc. ended all book discounts in France on Thursday, and began charging a token penny for shipping books, bowing to a new French law aimed at protecting local bookstores from what they had described as “unfair competition” from the U.S. online retailer.
The new law, which went into effect Thursday morning, essentially forbids online booksellers from applying government-regulated discounts to the cover prices of books. They can mark down shipping under the new law--often called the “Anti-Amazon” law--but they cannot offer it free.
The new law is the latest step by European governments--particularly France’s--to rein in what they see as the growing power of a group of largely American tech companies. The French government said last month that it aims to propose new regulations at a European level to ensure a “level playing field” for European companies against U.S. firms.
"Publishers and bookstores are organizing against the unacceptable commercial pressure exercised by Amazon," France's main bookstore association, which had lobbied for the new law, said in a statement. "We have repeatedly denounced the 'dumping' and unfair competition by online retailers, particularly Amazon."
Yes, it is defensive. USA tech companies have the advantage of limitless credit with which to come in and cut prices to the point of destroying what they want. And Amazon does not have to make money, because it's credit is essentially zero cost. Yes, it is unfair, and destructive, and advances false economies. Now, privately the answer is not protectionist laws, but entrepreneurship. Amazon cannot compete with brick and mortar stores. So now Amazon is establishing brick and mortar.
You can order online, and pick up your order from a physical location, as in these lockers in Seattle:
Amazon is losing money on online sales. Therefore, help them lose as much as possible. Shopping online and shopping in a bookstore are two separate and distinct human activities. Aside from a book being involved, neither has the slightest connection with the other. 75% of book sales are classic, like The Iliad and anything Shakespeare.... the other 25% is bestsellers and special order. So cut off Amazon's move into brick and mortar by setting up an order desk in your bookstore that orders from Amazon and delivers to your store. Instead of letting amazon win the foothold in brick and mortar as above, clear an easy 8% affiliate fee giving the customer what they want. And be have access to every book in publication, so Amazon has nothing over you since you front Amazon as a small bookstore. In fact, we still have countless thriving bookstores in USA, they are not complaining about Amazon, because they are busy thriving with Amazon. And every bookstore in USA should have a coffee shop and a fireplace.
Mish goes on:
No One Looks Out For the Consumer
Who is watching out for the consumer? Answer: no one. When you reward inefficiency, ineptitude, and rudeness, the result is more inefficiency, more ineptitude, and more rudeness.
People who have to pay more for books, have less money to spend on something else. And if they feel books are not a bargain, they don't buy them.
France supposedly wants more tourist dollars. Good luck with that, when everything is overpriced and the government tells store owners what hours they can or cannot be open.
Petition of the Candle Makers
Ironically, French economist Frederic Bastiat lampooned protectionism back in 1845 when he penned 'Petition of the Candle Makers', mocking the sun's "unfair trade advantage" over candle-makers.
We are suffering from the ruinous competition of a rival who apparently works under conditions so far superior to our own for the production of light that he is flooding the domestic market with it at an incredibly low price; for the moment he appears, our sales cease, all the consumers turn to him, and a branch of French industry whose ramifications are innumerable is all at once reduced to complete stagnation. This rival, which is none other than the sun, is waging war on us so mercilessly we suspect he is being stirred up against us by perfidious Albion (excellent diplomacy nowadays!), particularly because he has for that haughty island a respect that he does not show for us.”
"No Competition" Laws
"Unfair competition" laws should be called what they really are: "No competition" laws, complete with higher prices, poor service, and higher unemployment.
What's next? Outlawing Kindle? Taxing eBooks as "unfair competition" against "real" books? What about taxing those who use free solar energy instead of candles?
Well... it is unfair competition, it is USA imperialism inflicted on France, but it can be beat. That is the beauty of a free market, it needs nothing to win in a fight with imperialism. As you see, Amazon gets around the government of France's best efforts. What I advise Amazon cannot get around, for the more if exerts, the more it loses.
I love amazon, I make amazon, and as a micropublisher myself, I compete with and beat Amazon. But if you ask the government to help you fight amazon, you lose.
France invented the term Laissez Faire, having learned it from the Spanish scholastics who picked it up from Moslem universities... Scottish Catholics past it on to Scottish protestants who took it worldwide with the British empire. And as Sowell notes, USA citizens of African ancestries from former slave colonies of the British are the wealthier sort in USA, whereas those of formerly French colonies are generally of the impoverished sort. Free trade matters, and the French ought rediscover what they put a name too.
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