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.