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Swiss Voters Reject Book Price Controls

New submitter hinterwaeldler writes "In 2007 Switzerland abandoned book price control (which requires publishers to fix prices for their books and forbids any dealer to sell at another price), reducing prices by 30% to 50% for online buyers. The brick & mortar book stores lobbied the parliament into creating a bill to reinstate the price fixing, against which a referendum was taken by liberals and the Pirate Party, forcing a popular vote. On March 11, after an intense debate, Swiss voters decided against book price control (German-language original) with a majority of 56%."

21 of 129 comments (clear)

  1. Protectionism by any other name... by ControlFreal · · Score: 4, Informative

    ... because that is exactly what this initiative ("Buchpreisbindung") was aiming for. Protectionism is wrong, no matter what you name it.

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    1. Re:Protectionism by any other name... by willpb · · Score: 5, Interesting

      It would be nice to have a functioning democracy. I just wish we could have a referendum on protectionism here in the U.S.

    2. Re:Protectionism by any other name... by MightyYar · · Score: 4, Interesting

      To be fair, there can be things that a society feels are more important than low prices. For instance, perhaps a subsidy is needed to provide incentive for the small Swiss market, which doesn't even have a common language. If the Swiss people thought that they needed more literature than the free market could support, then it is reasonable to subsidize it. As another example, I happen to support some kind of incentive for over-production of food, because I'd much rather over-pay than run out.

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    3. Re:Protectionism by any other name... by gstoddart · · Score: 4, Insightful

      It would be nice to have a functioning democracy. I just wish we could have a referendum on protectionism here in the U.S.

      What makes you think it would help? The US would vote overwhelmingly in favor of protectionism -- it's a hugely protectionist country despite claiming to want free trade.

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    4. Re:Protectionism by any other name... by alexborges · · Score: 2

      I disagree. There are instances when this kind of regulation may have a positive outcome on a market. The extremist way you put it just warrant that only popular ideas get sold (have more demands, thus get more or all of the rack space).

      Books are kind of an important thing. We are not talking about cheese here.

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    5. Re:Protectionism by any other name... by tlhIngan · · Score: 4, Insightful

      The US would vote overwhelmingly in favor of protectionism -- it's a hugely protectionist country despite claiming to want free trade.

      The US does want free trade though. It wants free trade that benefits itself exclusively. The whole goal is to be as protectionist as possible, but allow token free trade that benefits it. For example, by allowing US companies to sell to other countries freely, but putting up roadblocks when other countries try to sell their goods in the US. The US benefits because its companies are selling more, while being protected from being undercut in other markets by what that country tries to sell the US.

    6. Re:Protectionism by any other name... by cayenne8 · · Score: 4, Insightful

      What makes you think it would help? The US would vote overwhelmingly in favor of protectionism -- it's a hugely protectionist country despite claiming to want free trade.

      Well, to some extent, yes.

      However, I'd argue that we in the US would be a little happier if we could at least compete on a more equal basis against the countries that don't worry about pollution and don't have to mess with the added cost of environmental issues.....those countries that pay $1/hour....and those that manipulate their currency unfairly.

      I wouldn't mind a tax/tarrif on imported goods, that only brought the cost of the final product closer to what it costs to manufacture in the US based on those type of metrics. That way, all things being even for cost, quality would prevail in the US consumer's decision making.

      No, this couldn't be absolute...but as long as it made it reasonably close to equal.

      On the US side...I wish we'd get rid of a lot of the subsidies we have on food, like corn products.....so that natural sugar could compete more closely with HFCS....

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    7. Re:Protectionism by any other name... by pr0nbot · · Score: 2

      Protectionism is not "wrong" in any moral sense, just "wrong" according to economic theory.

      Protectionism has the short-term effect of increasing prices for local consumers and funneling their money into the pockets of those who own the protected industries. (But if you consider that transfer "wrong", then your problem is with capitalism, not protectionism.) On the other hand, the protected industries provide jobs and livelihoods for their workers which would otherwise vanish, and need to be replaced. Comparative advantage would suggest that other industries would make up the shortfall, but in the real world it's not instantaneous, and workers cannot magically acquire new skills.

      In the longer term, protectionism coupled with a locally-competitive market can produce an industry that can then compete on the global market. This is to the benefit of everyone, at home and abroad.

    8. Re:Protectionism by any other name... by cayenne8 · · Score: 2

      Getting the US to lead by example and stop manipulating its currency would be a good start. It's by far the worst offender in that area.

      I don't see how we're bad at doing that...if we were manipulating out currency, I kinda doubt the dollar would be as weak as it is.

      Talk to me when you get China in line with currency manipulation.....

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    9. Re:Protectionism by any other name... by AliasMarlowe · · Score: 3, Insightful

      For example, by allowing US companies to sell to other countries freely, but putting up roadblocks when other countries try to sell their goods in the US. The US benefits because its companies are selling more, while being protected from being undercut in other markets by what that country tries to sell the US.

      How do you reconcile this opinion with the US trade deficit?

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    10. Re:Protectionism by any other name... by scamper_22 · · Score: 2

      Perhaps.

      But it should be noted that all almost all models of a 'free market' include all people working under the same rules.

      I consider it both morally and functionally problematic to have free trade with a country with vastly different environmental/labor laws.

      It's morally wrong because I don't think an American is *worth* more than a Mexican just because they happen be born in America. So why would we think the American worker too good to work for less than the American minimum wage, when we're perfectly fine buying the same good Mexico, where a Mexican manufactured it for less than the American Minimum wage? It's morally wrong because it is a very colonial mindset.

      It's functionally wrong... because well... look around you. Trade deficits. Countries not willing to adjust to the reality. It's politically problematic to see such huge changes in industry and worker wages... Governments have counted on growth for future obligations...

      What's particularly interesting is the US... as a federation of States was actually pretty wise in how it handles internal trade issues.

      For example, when the minimum wage first started coming about... it occurred at the state level. Now it doesn't take a Phd to see that if New York implemented a minimum wage of $10, but Alabama didn't... a lot of work would go to Alabama and New York would suffer. So what did the federal government do... they used the interstate commerce clause... and made a very wise ruling... any good crossing state lines has to obey the federal minimum wage. Makes a lot of sense... so all American play on the same field in the free market.

      Now the question is, what happened to this kind of very wise, rule oriented thinking? Today we sign trade deals with countries with vastly different minimum wages, environmental laws...

      I don't believe there is anything protectionist about a law like: Any country wishing to trade with the US must obey the US federal minimum wage.

      The practical impact of such a rule might be protectionist, but as a rule... it just makes sense.

      I'll go on a small but highly related tangent here. You know the whole Euro disaster. What did all these brilliant technocrats/progressives learn?

      You cannot have a monetary union without a political union.

      They tried and it failed miserably. You need common political policies (deficit limits...) to stay a part of the monetary union.

      I would say the say thing applies to free trade. A bunch of technocrats/progressives (used as a political philosophy.. not just leftists... there are right-wing progressives), thought we could have a trade union with political union... but they're wrong again.

      If you want a trade union, you need a political union (common labor laws...)

      Now it's possible these technocrats are just working towards a goal. In the Euro... using the fiscal union as a trap to make everyone into a political union. Or in the case of free trade... using a trade union to force common political union.

      But who knows... all I can say... is that I do think the American people as a democracy would do a far better job of 'rule' based thinking than the politicians. Your average person has a sense of fairness and law that technocrats, progressives, and bureaucrats don't/

    11. Re:Protectionism by any other name... by yuje · · Score: 2

      The one area where the US (and the other industrialized countries in Europe, as well as Japan and South Korea) do not practice free trade is in agriculture. All these countries want to practice free trade for industrialized goods, so that they can sell their manufactured products at competitive prices, and also purchase raw materials and industrial goods cheaply, but they heavily subsidize agriculture. Often this is done in the name of "protecting farmers", "food safety", "national food security".

      What this means in effect is that the poorer developing countries, where agriculture is the largest sector of the economy, and hoping to export their agricultural goods in order to get the money needed to build up their infrastructure and industrial base, are screwed. They have no way to compete on the international market with the cheap and heavily subsided farm goods of the industrialized countries, nor can they sell their products easily with all the trade barriers in place. The US has guaranteed prices for its farmers, and a lot of this is simply given away as food aid to countries. This helps feed them in times of famine of course, but it also means the poor farmers in those countries have a hard time making a living, as their crop prices have to compete against free.

  2. Our business model is dying! by skovnymfe · · Score: 2

    You must make laws to ensure its survival!

  3. Majority? by DarthVain · · Score: 5, Insightful

    "...a majority of 56%"

    Still sounds pretty divided to me.

    Although I agree with the outcome. It is simply common sense. Prices at a brick and mortar store will be higher, you are paying for the convenience of buying something immediately. Online prices will of course be lower, they don't have the overhead, however you have to wait days, weeks for your order, as well as pay for shipping.

    So no I don't feel bad for the dinosaurs of industry that think they can legislate profits. @%$#^! you. If the market says we want more online stores than brick and mortar, then so be it. Quit saying the market is king on one hand and with the other lobbying government to legislate monopoly powers to manipulate the market!

    1. Re:Majority? by Another,+completely · · Score: 3, Funny

      I really wish more AC posters could speak proper English.

      and Romansch and German and Swiss German and French. We've come to expect a lot from the Swiss, and someone seems to be letting us down dammit! If you can't get an idiomatic expression in your fifth language clear enough that everyone can understand, the PISA reports must be right. Let me help: caning refers to a corporal punishment popular in the earlier part of the 20th century, and salami slicing refers to the tactic of introducing something undesirable a bit at a time, as referenced in popular culture in a "Yes Minister!" episode in the 70s. Good luck with English, whatever your first language is. You'll be able to read all of these posts one day.

  4. Freedom vs. localism by elrous0 · · Score: 3, Insightful

    This is going to be one of those issues that ties many liberals in knots. On the one hand, they like the idea of fighting corporate greed and collusion price-fixing, on the other hand they're big on romanticizing local mom-and-pop stores (like many of the bookstores that will be hurt by online competition). But it seems to be the inevitable direction that things are going, not just for bookstores, but for a LOT of other types of retail store. If you're a retail bookstore these days and you can't answer the question "What do you offer that Amazon doesn't/can't?" then you're probably in trouble. And if price-fixing by government mandate is your only hope, you're in a LOT of trouble.

    I have to admit that I much prefer the online experience myself. But it's not just the price that attracts me, but the selection. I just bought a pair of great shoes in my weird size online that I could have never in a million years found locally. Similarly, I can find books through Amazon which would never be stocked in any of my local bookstores (which all seem to be 90% Harry-Potter-Twilight and 10% over-priced-coffee-shop these days). But your mileage may vary.

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    1. Re:Freedom vs. localism by Anonymous Coward · · Score: 5, Informative

      I'm Swiss, so I think I can give some insights in the vote.

      The law wasn't so much about online retailers, but more about big retail store (Walmart-like) that could sell bestseller at a much lower price than independent bookstore because of agreement they (apparently) have with importers.

      Now, in the French-speaking part of Switzerland, most books are imported from France. Basically, there is only one importer for each book and this situation allow the importers to fix outrageous prices (up to 80% more than the price in France for the same book). Now, an independent bookstore cannot put any pressure on the importer since the importer has the monopoly on a range of books. Big retail store can put more pressure on the importers because the importers somehow depend on them.

      So, this law was a way to protect the independent bookstores and allow a governement body to fix limit on the swiss price/french price ratio.

      The situation is kind of different in the German part of Switzerland, because they have some kind of regulation by the association of bookstore. Interestingly enough, all of the French-speaking county accepted the law, but all the German-speaking one refused it (so it got refused because we have more German-speaking).

      Now, there are some other way to fight against the book importers cartel and the "Swiss competition commision" said it will start an investigation about the prices and possibly illegal agreements between big retail store and monopolistic importers.

  5. More divided than that by DingerX · · Score: 4, Informative

    The German-speaking Cantons all had majorities against the ban. The French-speaking cantons all had majorities [i]in favor[/i] of the ban. Swiss-Germans outnumber everybody else by a wide margin, so they won.

    The argument for price-fixing is the same one behind the death of record stores. Remember record stores? Turns out there are a few hits out there that most people buy, and then those interested in music have wider interests, and therefore want a broader catalog to choose from. The record store business model is built on selling those hits and using some of that revenue to pay for the space to hold a broad selection and the expertise to guide customers. Even before the internet was making dents in music sales, the big labels were already running exclusive deals with Walmart and Target, sinking the record store business model. The same thing is going on with books: the competition to worry about isn't the internet; it's the big chains that can serve 80% of the market by distributing a handful of best-sellers, and screw the rest. And it's the publishers themselves, who cut deals with the big chains on their top sellers, and in so doing, contribute to killing off the market for their own books.

    And yes, it's protectionism in the same way mandating broadband to rural areas is protectionism.

  6. Re:Voting for Culture by Another,+completely · · Score: 2

    I agree with your summary of the issue. I'm against it on general free-market liberal grounds, but it was never an on-line vs. brick-and-mortar issue. (It looked like the on-line stores were going to be able to get around it anyhow.) It was about the grocery stores buying 50,000 copies of the most profitable books, taking the cream of the market. Because the grocery stores have more total turnover, they can get by on smaller margins, but they are only ever going to carry the most current best sellers.

    If we take the on-line sellers out of the equation, the cultural question is whether it's obviously better to have lots of cheap Danielle Steel books than to have more book stores with robust selections. I'm not sure of the answer to that, but I still think that allowing limited cartels is probably not the best approach to promoting culturally-valuable businesses.

    As for organizing a reading event for the cultural benefit that would otherwise come from better availability of books, don't forget that allowing the grocery stores to undercut the book sellers will probably mean the books that aren't best sellers will be more expensive, since the retailers who actually stock a decent selection will have lost volume on their most profitable items. A lot of the votes for the price fixing were from people who read books not available in grocery stores, and who didn't want to see the prices increase.

  7. Re:e-books that cost the same as hardcover books by Anonymous Coward · · Score: 2, Interesting

    Shakespeare wasn't exactly high society in his day, maybe you are the one who needs perspective. Meaningful literature is what society considers important over time - LotR's depictions of various creatures have become fairly standard in fantasy yet at the time of Tolkien's death the Silmarillion was somewhat rushed to get it out while there was still a market for it.

    A fair amount of Baen's stuff does make one think about the rights and duties one has to society, the Honor Harrington series for instance compares many different forms of government and discusses ways to ensure the society remains true to its founding beliefs. It examines polygamy in a modern society, the risks stemming from a perpetual underclass, etc. Tom Krautman pretty much beats you over the head with the ills of "transnational progressives." Eric Flint's Ring of Fire/1632 universe heavily examines the effects of grand politics on the average person.

    Most SciFi races are archetypes that allow us to examine social behavior. In Star Trek you have the Ferengi as the 80's "Greed is Good" view of capitalism, the Klingons the embodiment of an honor bound society, the Romulans as the paranoid closed society, the Borg as the end result of utilitarianism, Cardasians as racial supremacists, Dominion as a caste based society ruled by a formerly abused underclass.

  8. Re:Environmental rules are only one part of it by mcgrew · · Score: 2

    there are so many regulations that complying with them all is an undue burden on business.

    That's what the guy in the penthouse bringing down millions per year in salary and stock options says, but I, for one, don't believe a fucking word of it.

    Now go add in all the tax laws,

    How are you to fund government without taxes? Or are you an anarchist?

    all the environmental regulations you listed,

    Look here, boy, that's a sore spot with me. I grew up in Cahokia, IL a couple miles south of the Monsanto plant in Sauget. Before environmental regs, you had to roll the windows up driving past, even in 100 degree heat and no AC because the air BURNED YOUR LUNGS. Rivers caught fire back then. You ignorant kids have no fucking clue how bad the environment was before the regulations.

    I didn't see Monsanto going out of business, but drive past there now and you can actualy breathe. It doesn't even stink any more.

    the work laws

    You mean like the ones this comapny broke? Like OSHA, which if it were in place in 1959 my grandfather wouldn't have fallen down four stories? Son, I hate to break it to you, but you are a damned fool who listens to those who would do you harm in the guise of doing you good. Wake up and smell the sewage.