Amazon recently announced that sales of their e-books were now greater than combined sales of both their hardcover and paperback books.
Bad news for the traditional book publishing industry.
“With Kindle, it [Amazon] has eliminated the industry middlemen who come between the writer and reader of a book — from agents to publishers to distributors to wholesalers to brick-and-mortar bookstores. Kindle has also eliminated the need for a physical inventory of books, with its high printing, warehousing, and shipping costs. These innovations have resulted in far less expensive books now available to consumers.” Genevieve LaGreca
Inevitably, jobs will be lost. The more jobs which are lost the more news it makes – this is understandable. However, what doesn’t make the news is what happens afterwards. This is the slow trickle of those who have been displaced – back into the workforce – satisfying new or newer needs. These needs are paid for with the extra money which purchasers of Kindle-like products now have available.
This is how an economy grows. This is where prosperity comes from.Joseph Schumpeter described the process as “creative destruction”.
It was this process which paved the way for the onset of the Industrial Revolution – about two hundred years ago.
Prior to this the lives of the masses was indeed grim.
“In precapitalist ages, the average member of the economic 99%, if lucky enough to survive infancy, was consigned to a life of back-breaking work and poverty, constantly on the verge of famine, disease, and death.” Daniel Sanchez
This was simply the way things had always been.
So how was it that such a world, one which had existed for millenia, gave way in a mere two hundred years, to one in which the poorest people in our society can now enjoy a standard of living which the precapitalist 1% could only have dreamt of?
And more importantly, why did the damned thing take so long to happen?
History provides the answers to both questions.
Without the invention of the printing press – some six hundred years ago – we’d still be living in a precapitalist age.
The printing press, like Kindle, was an example of creative destruction.
The production of hand copied books ceased and the whole industry disappeared.
But just think about what replaced it?
The impact of Gutenberg’s invention is, and always has been, incalculable.
Wiki puts it as follows:
“His invention of mechanical movable type printing started the Printing Revolution and is widely regarded as the most important event of the modern period. It played a key role in the development of the Renaissance, Reformation, the Age of Enlightenment and the Scientific Revolution and laid the material basis for the modern knowledge-based economy and the spread of learning to the masses.”
Nobody would dispute this.
But, inspite of the incredible growth in the development, disemmination and diffusion of knowledge and ideas, nothing much changed for the masses. Life for most was still a subsistence existence.
“Then in the 18th and 19th centuries, something revolutionary happened. A group of philosophers started thinking very carefully about property, trade, prices, and production.”
The field of study of these new wave philosophers was termed “political economy”, and they in turn became known as, “economists”.
“From considering the economic laws they discovered, the economists concluded that society is much more productive if private property is more consistently respected … Let people control as much of their property as completely as possible, and everybody will be more prosperous.” Daniel Sanchez.
Thanks to the printing press, the ideas of these new wave “punk rockers” – people like David Hume and Adam Smith – quickly spread and took root.
As things turned out, their most fertile ground proved to be America.
This was no “happy” accident.
Many of the Founding Fathers were steeped in the works of these philosophers. When they broke free from England they also broke away from the, “Old Order”.
The Constitution was specifically designed in order to try and ensure, amongst other things, small government, enforceable private property rights and an unfettered free market system.
Given the opportunity, the American people went for it.
As time passed, the result for most working people was an almost continual process of betterment.
Milton Friedman went straight to the heart of the thing:
“So that the record of history is absolutely crystal clear. That there is no alternative way, so far discovered, of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”
It is this system which the liberals have almost destroyed.
They kicked things off with LBJ’s Great Society back in the 1960s – this is when the actual decline began– this is when the rot set in.
Its legacy has been a social disaster – a massive and unsustainable culture of dependency – bread and circuses.
Liberals simply cannot, or will not, accept that their ideas are fundamentally flawed. Under the Obama administration they have been woefully exposed. The system has stagnated – no-one knows what’s coming next – least of all them.
Result – “Regime Uncertainty”.
Any more of it and the system could well collapse.
“History teaches everything, even the future”. Alphonse de Lamartine.
Private property rights would be the first thing to go. Without them it wouldn’t take us too long to start back on the road to where we’d come from.
The journey would be terrible and the destination eve worse.
Self-Educated American Guest Columnist, Chris Clancy, lived in China for seven years. Most of this time was spent as associate professor of financial accounting at Zhongnan University of Economics and Law in Wuhan City, Hubei Province. He now lives in Thailand where he spends his time reading, writing, lecturing and, whenever he gets the chance, doing his level best to spread Austrian economics. Copyright © 2012 Chris Clancy. Used with Permission.
Self-Educated American recommends Milton Friedman’s, Free to Choose: A Personal Statement