Want to make a libertarian thinker wince? Make them ask a member of the Australian public what caused Borders to collapse this year. The shibbolethic answer would cast a clear divide across political lines, exposing a serious error in conventional wisdom that helps propagate anti-capitalist sentiment in this country.
Goaded by Gerry Harvey’s foolish comments on the state of retail earlier this year, the media and the public have branded REDgroup, parent to publishing retailers Borders and Angus & Robertson, as ‘greedy capitalists’, whose dastardly profiteering has brought about their own demise.
Nothing could be further from the truth.
It is government intervention that doomed REDgroup to an eventual collapse, by enforcing restrictions on the parallel importation of books. The theory goes that by preventing the importation of books under licence by Australian publishers, jobs are protected and all aspects of the publishing industry—from authors through publishers to paper manufacture and retail—are ‘supported’. This viewpoint is chanted across much of mainstream Australian publishing without much regard for the economic consequences.
Restricting imports in this manner is nothing but an exercise in socialist isolationism. Publishing was already successful in Australia, and it will continue to be successful regardless of this embargo—this is no fledgling industry perched on the brink of disaster. The logistical success of this restriction is in itself proof of Australian publishing’s established strength: so much so that all books bar the most esoteric niche items plucked by career book-buyers are protected, with no notable exceptions to the rule.
The political left’s argument that these restrictions are the lynch pins preventing the total collapse of Australian publishing simply does not hold water. Their logic betrays a total lack of foresight. After all, the proponents of this trade barrier tend to be the people who fight to block the logging required to support it!
So how do these laws affect Australians and what has drawn every armchair Gerry and their dog to align against capitalist retail? Exorbitantly high prices. Australians are very familiar with the grossly inflated price of our books as compared to our English-speaking brethren across the seas, but on the whole it is retailers and ‘greedy capitalists’ upon which blame falls.
In 1991 when these restrictions were implemented, small purchases like books, CDs, and film were almost exclusively domestic purchases. Two decades later, the globalising power of the internet has obliterated all barriers between international markets for these products. Markets have expanded, consumer bases have grown beyond political borders, and international shipping times have become inconsequential. Consumers know this all too well.
Yet books remain in the ‘before time’, before the internet became the ubiquitous leveller allowing widespread free trade between individuals. Rather than equalised, we are provincialised.
There are few things more pitiful than the prices at Borders’ liquidation sales—60 to 80% off barely makes the dregs of their stock competitive with leading international book retailers like Amazon. Open secrets for many years, the tremendously competitive prices of online retailers have rightfully drawn people away from Australian brick and mortar stores in droves. Without necessarily asking ‘why’, the Australian public have freely drawn their own conclusions for this inconsistency, but sadly it appears they have missed the mark.
While correctly blaming high prices for the failure of these businesses, it seems the public incorrectly holds business wholly responsible rather than improper government policy. The cost of doing business in Australia is high enough without socialist edicts controlling what businesses can and can not import and from which wholesalers they can and can not source stock. REDgroup, like any book retailer, would love nothing more than to become the largest and most competitive retailers in the country, but the government simply won’t let them. Prices are inflated, product selection shrinks, and businesses shackled by the cost of operation are unable to grow or remain competitive. The result is a net loss to productivity in Australia and the end of otherwise successful businesses made deliberately unsustainable and inefficient by government intervention.
As pathetic as Australian book retailing is now, its underdog supporters seem pleased to let the Labor/Greens alliance reduce it to a woefully hopeless state.
A 2009 Rudd Government review of the restrictions concluded they were justified based on the blind and suicidal support of publishing’s vast left-leaning horde. Conventional wisdom, it seems, sealed REDgroup’s fate.
When prices rise due to the carbon tax (the left-leaning publishing industry will, as a matter of principle, hit their tree-lopping carbon-producing paper manufacturers as hard as possible) it will be the ‘greedy capitalists’ who are blamed. When the mandatory superannuation contribution rises to tighten the noose around the necks of so many struggling businesses—bookstores included—it will be the ‘greedy capitalists’ who are blamed for yet another price rise.
Without REDgroup’s buying power, those ‘greedy capitalist’ bookstores that remain can only charge higher prices and the vicious cycle of socialist intervention will continue to damage Australian publishing. Whatever short-term gains this legislation may have brought in the past, Australian authors, editors, copywriters, publishers, and above all Australian readers have all lost in the end.
They obviously know nothing of Amazon’s great deals on economics texts.
Nikolaus is a Brisbane-based arts worker and postgraduate economics student.
