Fairness, monopsony, and other unhelpful concepts

Some people are taking great umbrage at Amazon for forcing publishers to provide them with books they can actually sell. What apparently is at issue is not the basic concept that Amazon need saleable inventory (although that is a concept that seems rather lost on the publishers themselves), but the fact that Amazon is going to punish these suppliers by not selling ANY of their goods, rather than simply not selling the goods that arrived damaged.

This, it seems, is not "fair" and is an example of Amazon using its "monopsony power."

Yeah, that's a bunch of crap. I'll start with the idea that Amazon has a "monopsony." Just like Amazon isn't a monopoly because it can't shut out competing online retailers, it is not a monopsony, because it (say it with me) can't shut out competing online retailers. You can sell your books other places.

On to "fair." "Fair" is one of those terms that kind of drives me crazy, because it doesn't really have any agreed-upon meaning when you start talking about specific situations. Is our current tax system fair? Is the percentage of tax paid by wealthy people fair? If it is unfair, is it unfair because wealthy people pay too much in taxes, or because they pay too little?

I don't (NO I REALLY DON'T) want you to actually answer those questions. Why not? Because there are people who are completely, 100% convinced that the current system is unfair because wealthy people pay too little in taxes--and they have many long, self-righteous justifications "proving" that they are right. And there are other people who are equally convinced, and have equally tedious "evidence," that the current system is unfair because wealthy people pay too much.

That's "fair" for you--it means whatever you want it to mean.

But what does "fair" get you? Not much. Say you decide (what with your long rationalizations and your many friends who agree with you) that the tax system is unfair, and that it is specifically unfair to you, because you shouldn't ever have to pay any taxes. So you don't.

You can protest the unfairness of the system until you're blue in the face (and people do), but you will still get fined and perhaps even imprisoned (and people do). That's because the government has a different idea of what's fair, and unlike you, they have cops and prisons. (I once heard a young man on the bus discussing his many drug arrests, the latest which was felony weight. He objected bitterly it being classified as a felony, because it was--you guessed it--"not fair." Oddly enough, these magic words did not have any noticeable impact on his situation.)

What is Amazon? Amazon is a major retail outlet. If you sell books on Amazon, you are a supplier to that company. To be a supplier to Amazon, you must agree to their terms: You price your book a certain way. You get a certain cut. You use certain file formats. You can't put up certain kinds of material.

If you don't agree to their terms, there are other suppliers out there. (And, since Amazon doesn't actually have a monopsony, there are also other retailers out there who might be more accommodating to you.)

Now in book publishing, suppliers actually have a relatively large amount of power--larger than in most other industries. Stephen King gets really nice contracts because he is the sole supplier of Stephen King books, and people really want those and don't want anything else. It's a stark contrast to, say, supplying Wal-Mart, whose customers are so price-conscious that they'll happily switch brands if something cheaper comes along, which really puts the suppliers in a position of weakness.

Even so, the power of book suppliers has it limits, as those art-book publishers are discovering. Amazon is having such a problem with their stock that it's willing to stop selling their books altogether, which suggests that Amazon thinks readers won't really miss those books and will be able to find suitable substitutes.

And guess what? Amazon has a perfect right to make that call. It's not the government censoring people--you have no First Amendment right to force a retailer to carry your product.

People seem to constantly want to have some kind of reciprocal emotional relationship with Amazon, which makes them lose sight of the fact that it is simply a business and a retailer. If a business partnership is unprofitable, Amazon will drop that partner. This is how business works--it's about making money, and if pairing with someone doesn't make a company money, the company will terminate that relationship.

Is that "fair"? Hell if I know. I just know that's the way the retail business works, has always worked, and will most likely work in the future.

Is that scary to you? Well, maybe it should be, because if you've put all your eggs in the Amazon basket, then you are taking a risk. Amazon's not your mom, it's not your friend, it doesn't love you, and it's under no obligation to take care of you. It's a major retailer, you are a supplier, and that's all. If they don't like what you do, they'll terminate the relationship--and if you don't like what they do, you are free to do the same.