A new form of Amazon Derangement Syndrome

The other day, Forbes published a post entitled “Amazon Should Replace Local Libraries to Save Taxpayers Money”. Yes, you read that right.  The article was written by Long Island University Post economics professor, Panos Mourdoukoutas. All I can say is if this is his idea of fiscal responsibility, I don’t want my kids or grandkids (when I have them) studying under him and I am really glad he isn’t on my city council. For it’s part, Forbes has realized just how ill-advised it was to publish the post. Why? Because after only a couple of days, the post is gone from the Forbes site. If you follow the link provided in a number of places, you get a 404 (or 4-0-Forbes) error.

Not that it has caused Mourdoukoutas to take down his tweet announcing the post.

Mourdoukoutas’ response to the first comment to his tweet shows how out of touch he is with what’s going on. The comment basically reminds him that to get a book from Amazon, you have to pay for it. His response? “But you don’t pay taxes for it”, or words to that effect. No, but you pay for the product and you own it. Or you pay for your Kindle Unlimited membership and you have to return the book at some point if you want to borrow another. And, yes, you do pay taxes on your purchase, at least you do in a number of states and with changes to the tax code more will soon be doing so.

But let’s look further because, thanks to the internet, a lot of folks grabbed quotes from his original post and — trust me — if Mourdoukoutas is indicative of who is teaching economics these days, we’re in trouble.

As Fast Company noted, the main point of Mourdoukoutas’ post is that Starbucks has replaced the library as a “friendly place” to go to read and Amazon Prime with its streaming service has replaced the library as a place to download videos. Amazon Go (which is currently a single store) combines coffee shop and bookstore. So why not let Amazon come in and replace our libraries? It would save taxes if it did.

“At the core, Amazon has provided something better than a local library without the tax fees. This is why Amazon should replace local libraries. The move would save taxpayers money and enhance the stockholder value of Amazon all in one fell swoop.”

Oh let me count the ways this is wrong. Let’s start with the tax argument. I live in one of the areas that is trying to get Amazon to come to town with the HQ2. I know what sort of competition is going on and what sort of tax incentives are being offered. If Mourdoukoutas believes for one minute that a city wouldn’t have to incentivize Amazon becoming the “library” in town, he’s lost his mind — assuming he had one to begin with.

There is something else he overlooks, something a great number of people don’t realize. Libraries are revenue sources for cities. If a third-party comes in and replaces the local library, that revenue source is gone.

Then there’s the fact that Amazon is a for-profit company. Why in the world would it want to become a lending library along the lines of the local library — where patrons don’t have to pay for the ability to borrow a book (print or digital)? Where is the profit in it for the ‘Zon?

He also seems to forget what libraries do. It is much more than just offer books and music for its patrons to borrow. A library is still a gathering place for local organizations to have their meetings. There are book clubs and writers groups, knitters and scrapbookers who hold regular meetings there. ESL classes and computer classes, robotics and Legos for kids and teens and so much more. A look at the July calendar for my local library — which is by far not a large library — shows over 100 activities scheduled. Our library is open 7 days a week and every day has something scheduled. The only exception for July was the 4th when the library was closed. There is no way an Amazon store could fulfill the meeting needs of my community, needs that are fulfilled by the library.

Gizmodo notes Mourdoukoutas wrote, “Amazon should open their own bookstores in all local communities. They can replace local libraries and save taxpayers lots of money, while enhancing the value of their stock.”

How would it save money? To borrow books from Amazon, you have to be either a Prime member (at the cost of more than $100/yr) or you have to subscribe to Kindle Unlimited. Both cost more than a free library card.

How would it enhance Amazon’s stock value? Funny that Mourdoukoutas never really explained that part of his argument. Why didn’t he? Because he couldn’t, at least not in solid economic terms. Instead, he fell back onto the feelz like so many seem to do today.

As a reader, I’d be very concerned about letting Amazon or any other corporation take over for a local library. Some years ago, a now former city councilman had the wonderful – yeah, right — idea of outsourcing our library to save money. At the time, there was only one company in the country performing that “service”. A representative came to a community meeting to tell us all about how wonderful it would be to let his company take over our library. It would save money because they would be the ones paying the salaries for the librarians. They would rehire those currently working at the library — maybe. (What we found out with a little research is they would have one degreed librarian on staff and then the rest of the employees would basically be part-time. So they saved money by not having to pay benefits.)

But it got better. It would save money on books and other material too because they were just like Walmart. In other words, every library in their system had the same books and other media. A library in Washington state carried the same books as that in Washington DC. No consideration of local interest. No consideration for local authors. Oh, and those events you’re used to your library hosting, don’t be expecting them. At least not nearly as many or as free events. After all, they were a for-profit company and needed to make money somehow.

So how would it be any different with Amazon? Are they supposed to step in and do all this out of the goodness of their corporate heart?

Some of the tweets in response to Mourdoukoutas’ are wonderful.


He couldn’t believe folks didn’t agree with him, tweeting:

The answer should have been obvious. They did read his article. They pointed out what was wrong with it and he didn’t like it — or at least didn’t understand it. So he tried to explain when Gizmodo reached out to him.

Times have changed. Whether we like it or not, hard cover books are turning into collectors’ items. That undermines one of the “core” functions of the local libraries. Starbucks and other “third places” undermine their “non-core” functions. And Amazon Books undermines both.

While Amazon charges for its books and subscription services, it isn’t financed by taxpayer money as is the case with local libraries.

That’s something that some people do not understand. And I want to repeat it: Local libraries aren’t free. In my community, they are financed by a fee. It is added to school taxes. I paid $495 last year

Is that fee too high? Does it have better uses in the community? Are local libraries duplicating school libraries? Should local libraries come up with a new business model to compete with Amazon Books or end up being replaced by them? I’m asking questions as an economist and taxpayer.

It is obvious Mourdoukoutas doesn’t have a clue about what the “core” functions of a library are. They go beyond just lending print books. They offer a service you don’t get from the other commercial venues he seems so enamored with. He also insults his readers by assuming we don’t understand that our tax dollars support the library. But, as I noted above, he also doesn’t understand that libraries also bring in money. More than that, they serve a different purpose for a city. A library is a flagship for a community, a reason people from other communities come to not only visit the library but spend money in that city.

He also fails to explain how his taxes for his schools and libraries are calculated. Here, they are based on property values. If you rent, you don’t necessarily pay those taxes, the owner of the rental property does. As for his “duplicating school libraries” comment, does he really believe only students go to the library?

My bet is he hasn’t stepped foot in a local library in years. He is certainly out of touch with what libraries offer and what role they play in a community. My question is why Forbes let such a post go live on its site. Obviously, the backlash was strong enough that it had second thoughts. However, instead of simply removing the post, it should have a counter-post up pointing out not only why it removed the post but what was wrong with it. It needs to smooth the ruffled feathers and admit it made a mistake.

As I said in the title, this is a new form of Amazon Derangement Syndrome, one of the strangest yet.


34 thoughts on “A new form of Amazon Derangement Syndrome

  1. Amanda, I suspect that he’s looking at libraries the same way childless couples tend to look at public schools: as places that provide something he never uses, yet is still charged money for.

    And it’s not Amazon Derangement Syndrome; it’s the more typical libertarian view that there are no “government services” that shouldn’t be privatized, with fees charged to those who use them and those who can’t afford fees subsidized by private charity to the extent that private charity is willing to do so, without compelling his support. Amazon is simply the private company he feels could best provide the service and is the example of what that company would look like.

    1. It’s more than that. He, supposedly an economist, doesn’t understand the basic finances of a library. Nor does he expect the average reader to figure out he clumped school taxes with “library taxes”. How much is he actually paying for his local library? He also, as I pointed out, totally ignored any tax concessions the city would have to give Amazon to come in and replace the library and, assuming they allowed for free borrows like the local library does, then you don’t even get sales tax. Where is the savings that is supposed to offset the reality that the community will have lost a valuable service?

      1. I’ll add that in some places – like the tiny new England library where I worked, and a couple of others in that same state – the majority of the funding didn’t come from taxes, the library had their own trust. In one library’s case, it had been set up ~150 years before, but was chugging along slow and steady providing enough funds to keep the library going (now, the clauses preventing that library from altering the building were admittedly short-sighted, but still). Donations, income from other things like book sales, all those feed into the fund, which is usually invested and managed conservatively, so the library is effectively independent of local government.

        1. Cedar, exactly! A lot of libraries are set up that way. Others supplement their city budget monies with donations from the community, monies raised by their foundation/Friends organization, etc. That is something most other tax entities are not able to do. But, again, it is something this guy completely ignored.

          1. The first library in Ohio was set up by pioneers donating furs from their trapping. The furs were taken to Boston, sold, and then books bought with the proceeds. (They got recommendations from the librarians at Boston’s Athenaeum, but mostly they went with the ideas from the donors.)

            Go home, Panos. You’re drunk.

  2. He seems very attached to his analysis. Its useful to ask the question, but you have to be willing to accept that the correct answer might be “no.”

    Myself, the local library was a large part of my youth. I haven’t borrowed a book since 1978 though, so if they all vanished I’d never know.

    The thing about libraries is they are an inventory of knowledge in a very resilient form. You can’t beat hard copy for enduring the ravages of time. When there’s a power failure, you can still go to the library. The same is not true of Amazon.

    I think a lot of these Ivory Tower guys get very spun-up with the possibilities of computing technology, and they forget that it depends on a huge infrastructure and labor base to keep the lights on. The whole Internet is like the paint on the wall of a house. The rest of our civilization forms the entire rest of the house.

    He’s like the idiots who rail against bottled water. “Who needs bottled water?!” they rage. “What, you can’t use a glass?!” But what do we see, in -every- natural disaster, fire, and minor unpleasantness? Cases of water bottles, moving by the truckload and rail car into the affected area.

    It would really suck if there was no existing inventory of water bottles in every store in the nation, right? Water is an iron-clad human need. You don’t have water, you die. Likewise, books are a storehouse of things you absolutely have to know if you want to maintain a civilization. It would be nice if there was a central storehouse of them, maintained against the day they might be needed, right?

    1. Yep. Add in all the other services a library offers — everything from children’s story hour to movies for teens on weekends to science projects to computer and literacy programs — and you quickly see it is more than just books. That’s something this idiot completely overlooked or ignored.

    1. I know — awesome PR for local libraries, especially when you follow all the discussion about it on Twitter.

      BTW, you are insulting dinks. VBG

  3. I disagree, this isn’t Amazon Derangement Syndrome. This guy is just deranged. Dude needs to step out of his ivory tower and take a few big gulps of fresh air. Maybe, I dunno, go to a library too while he’s at it.

    1. Possibly, but I classed it as ADS because he didn’t suggest B&N do it — or any other retailer. Let’s face it, in a lot of ways B&N would be better at what he suggests than Amazon. It already has storefronts. It has cafes. It has experience, albeit not a great track record, of running both. It already has the real estate. But no, it has to be Amazon, like that’s really going to happen.

  4. One of the things I noticed when I moved from MT to SoCal (don’t worry, I’ve since moved back) was the general lack of local libraries. CA has big centralized libraries, but local versions are relatively few (and interlibrary loan is limited to the local county system). Conversely every podunk wide spot in the road in MT has some sort of public library. It may be run as a one-man band, but it’s usually there (and interlibrary loan from Milwaukee to Seattle).

    Ditto usedbook stores.

    Not coincidentally, MT has a much higher functional literacy rate. (And if the donations at the local library booksale are any indication, an interest base about six grade levels higher.)

    1. In a lot of small towns across the west, one of the first community projects organized by women’s groups after the town was established was … tah-dah! a local library/reading room/book club!

      1. I think in Amarillo it was the third social group formed, outside of churches. One of the wealthy families allowed their basement to be used for the first lending library.

  5. This sparked a different idea. I wonder what the cost would be for a Kindle with KU would be versus the cost of shelving books. Would it be cheaper for the library to lend the Kindle out over the long term? Obviously only works for works in the KU, but there are a lot.

    1. Years ago when I was working at the library, and the Kindle and Nook were new things, we bought one of each and patrons could check them out. Books were bought and loaded onto them, or Overdrive was used to check out ebooks and load onto them. Mostly, what people were doing with them was learning how to use an ereader, and I taught classes and wrote a handout to facilitate that. It was pretty cool.

    2. The problem with that is the KU account would be linked to the library and not to the person borrowing the Kindle. So, if a book is borrowed more than once, the author might not get paid for the subsequent borrows (I’m not sure. It is something I haven’t really seen addressed before.)

      1. Good point. I was looking at it from the library’s POV, not the author. I guess Amazon would have to have a different pricing model for it.

  6. He’s also removing people who can’t or don’t use plastic. Admittedly a small number, but you must have either a debit or credit card in order to use an Amazon subscription. Amazon won’t let you use Amazon gift card for KU.

    So why is he prejudiced against the poor and those with enough common sense and self knowledge to avoid plastic?

    I suspect sufficient poking in his writings would turn up evidence that he’s one of those evil busybodies who want a cashless society so people can only buy approved products and services. But then, I’m a suspicious sort.

    1. LOL. Join me then. I wondered much the same thing.

      Reading the post, I very much got the “I don’t like paying taxes and this sounds like a good idea” vibe from it. And it is a good idea until you really start looking at all the implications of what he is proposing.

    2. It’s not a small number. At least ten percent of adult Americans are unbanked…They do not have a credit card, a debit card, a savings account, or a checking account.

  7. Can’t judge fairly without seeing the context, but duplicating school libraries may be less about students and more about the services a professor gets from the university library. I understand a professor budgets for what their university library doesn’t do for free, and does not go to the public library instead. The rest of us don’t read, and don’t do research, don’t you know?

    And Forbes is supposed to be a business magazine.

  8. Just here to say how incredibly jealous I am of a library that is open 7 days a week. Our local library, located across the street from the grocery store, and thus very convenient for weekly trips, is closed on weekends. And is only open after 5 one day a week. And when you point out that their hours are inconvenient for the majority of the people in town, they’ll point out that you can just drive 45 minutes (or more) to the next library in the county.

    So I am one of those people who would be happy to see the local library replaced with a decent bookstore. But I also understand how fortunate I am to be able to afford a Kindle (even if I read on my phone most of the time) and a Prime membership, a KU subscription, and Audible subscription, and enough disposable income to still buy ebooks for me and dead tree books for my daughter.

    So, maybe just close Hooters and turn that into an Amazon store instead?

    1. For years, libraries around here shared that attitude. Then, one by one, they started extending hours. What they discovered was that traffic through the library increased. Yes, it mean having to adjust staffing and, in some cases, add staff, but the library use, the benefits to the community and even monies collected via fines, donations, etc., proved it was something that should have been done sooner. Now they seem to be in a competition to see who can get the next big “it” service, be it robotics or auto shop or computer classes or sewing, before the next library over does. And all these programs bring in more people.

  9. The core business of Amazon is NOT selling books.

    The core business of Amazon is to generate a profit for their shareholders – some of which they might do selling books, some providing a service for 3rd-party sellers, some providing a place to stream video/sell micro-sized rentals of books (Kindle Unlimited).

    Amazon is NOT in the business of providing assistance for students, researchers, beginning authors, meeting places (for FREE). All of which libraries do.

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