Wednesday, 9 July 2014

The Book Report: Nationalize It?

The Amazon/Hachette feud is getting dirtier.

Amazon, as you may recall, has been playing silly games with books by mega-publisher Hachette, and I also wrote about how it's just one of the troubles affecting the book business in general. Amazon's shot across the bow is a trial balloon letter where Amazon offers Hachette authors 100% of all their e-book royalties. 

Now while it may sound like Amazon is being all generous with the poor downtrodden authors, folks should beware of internet geeks bearing gifts. The big thing is that accepting that deal would no doubt violate the authors' contracts with Hachette, trapping all sides in an expensive legal quagmire that only Amazon and Hachette could possibly emerge from sans bankruptcy.

Now the brain-trust at have offered a suggestion: Nationalize Amazon, Google, and any other internet company that displeases the author of this "think piece."

First thing I have to say is:



Back to the topic.

Yes, the internet was invented by departments of the US government. Specifically it was created by the dreaded US Military/Industrial Complex. It's original intent was for military and government facilities to exchange information even during a nuclear attack.

A form of the internet as we know it today was first envisioned by Richard Nixon in his little known "Wired Nation" plan.

Nixon's dream was to have a box attached to every television in the USA that allowed people to watch whatever they wanted, whenever they wanted to,  to communicated to others via TV, and to be able shop from home and deal with any retailer they wanted.

It was immediately shot down as technologically impossible, condemned as potentially "fascistic" and "Orwellian," and pretty promptly forgotten.

Now while the internet was exclusively government property it could do simple text only e-mails, and that's about it. When it expanded to connect universities it developed some more capabilities, but otherwise remained a scintilla of a shadow of what it is today.

But the computer nerds at the universities saw potential, not only for sharing data, but for making profits.

It's thanks to the profit motive that the internet went from a handful of e-mail services and buggy bulletin boards to the fever swamp of porn, self-righteous outrage, and cat videos that we all know and love today.

So while the government started the ball rolling, Nixon's dream couldn't be realized until private businesses figured out how to make that rolling ball useful to anyone outside of military bases and universities.

Now let's look at the practical aspects of nationalizing businesses.


Need more explanation?

All right.

I'm Canadian. I grew up and live in what has been classified as a "have-not" province since the 1930s. I've seen businesses get nationalized, and I have yet to see them work.

A good example was the Sydney Steel Corporation (SYSCO) in Cape Breton, Nova Scotia. For decades, and under various names and owners, it mined local coal, processed it into coke, and then used that coke to smelt Newfie iron ore into steel, then forge that steel into rails for export.

By the mid-1960s the rail market was shrinking, the costs of mining coal was going up, and it just wasn't feasible to keep the plant going. 

But the plant was the centre of hundreds of jobs all over the region. Those people voted, and the ruling party wanted those voters voting for them, so they nationalized it. 

The steel plant and the mines stayed open. They pumped out rails they couldn't sell, and every year lost a fortune.

SYSCO then became a political football, draining millions every year from the province, and creating products they couldn't sell and lots of highly toxic pollution. 

Eventually the province ran out of other people's money and the mines and the plant closed, leaving behind the toxic Sydney Tar ponds that took over 20 years to clean up.

That's not an outlier or an anomaly in the annals of nationalization, it's pretty illustrative of the entire thing. Similar stories can be found from the USSR, to the UK, to the USA and all points in between.

Now let's look at the political aspect of nationalization. Does really want that sort of precedent in place with the possibility of a Republican presidency coupled with a Republican majority in both houses of congress in 2016?

Would they be so keen for nationalization of internet based businesses then?

Probably not.

Now this is the point where you say: "But D, the article wanted them to be heavily regulated like a public utility rather than be taken over and run completely by the government."

Then they shouldn't have used the word "Nationalize" so much when they claim to be advocating regulation.

Let's look at how the government can regulate Amazon and Google into becoming good corporate citizens.

They can't.

Guess who writes government regulations.


The President?


They all take credit for writing regulations, at least the ones that don't end up a public political embarrassment, but they don't really write them.

Who writes them, then?


Lobbyists for the people the government is trying to regulate to be specific.

That means that any attempt to regulate internet commerce will be written by people like Amazon and Google, and they will be structured to protect Amazon and Google while putting the screws to any and all potential competition.

Amazon and Google are not monopolies, yet, but they they very well could be in the near future. To become monopolies they need the backing of the government, because only the government has the ability to legally arrest, fine, or confiscate material.

So what's the best way to handle Amazon if the heavy hand of the state will inevitably be turned to the service of Amazon?

Amazon needs viable competition.

Amazon almost had competition in the form of Borders Books. Borders was an early pioneer of the "big box" style bookstore, and had the most efficient inventory system in the industry. They knew what was on each shelf in each store in the country, and could move merchandise to the best locations quickly and with a minimum of fuss.

So why did Borders go out of business?

It committed suicide.

When e-commerce of books was a new thing, Borders signed its death warrant by turning its online sales wing into basically a link to the Amazon web-site. They could have set up a system where orders could come in online, and the nearest store with the item in stock could ship it, cutting down on delivery time and costs.

But they didn't, they were short sighted, the rest of the book business didn't see it either, and now they're paying the price.

The big multi-billion dollar mega-publishers should band together with the independent presses, and figure out what systems can be set up to get books to people without Amazon.

I live in a small town, and we lost our independent bookstore to Amazon, and now we're stuck with the selection at Wal-Mart and the local grocery stores which consist mainly of books either written for teenage girls, or by James Patterson.

That's not good for anyone. Not for readers, not for publishers, and not even for retailers.

First, make deals and plans with Amazon rivals like Books-a-million, Barnes & Noble, and many other to make people think of their sites when they think of shopping online.

Then there's physical stores, which the business seems to forget is an old-fashioned but highly enjoyable way to shop for books.

Sure, online is convenient, especially when you already know what you want, but then you have to wait for delivery, and there isn't the joy of the magical accidental discovery you make while browsing the shelves of something you didn't know you wanted until after you've found it.

The technology exists so that no reader should have to go to Amazon to get a book. Publishers should make sure that the new book printing Espresso machines are in every possible location, especially the smaller bookstores. They should be under a big sign that says: "If it's not on our shelves, just ask at the counter, and you can have it in ten minutes."

Use high-speed on-demand on-site printing to lure the punters in, then let the browsing time to induce them to buy other stuff on top of that. I know book readers, I am one, and they will always buy more books when given an opportunity.

If my local store had one of those machines it probably would still be in business. Why wait a week to get what you ordered when you could walk down to the local shop, give your order to the clerk, or send it in online and have it all ready and waiting for you to pick up?

Then Amazon might be willing to act more like a business, and not like a power-drunk absolute monarch.

That's what I think, tell me what you think in the comments.

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