Arnold Ahlert / Oct. 22, 2014

Paul Krugman Uncovers a Right-Wing Conspiracy at Amazon.com

The Times columnist suggests a government crackdown for selling conservative books too quickly.

Big-government aficionado Paul Krugman is calling for “public action to curb the power” of an entity he can’t quite bring himself to call a monopoly, even as he nonetheless compares its “abuses” to those of John D. Rockefeller’s Standard Oil company. The subject of his ire? “Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America,” Krugman whines.

“Does Amazon really have robber-baron-type market power? When it comes to books, definitely,” Krugman insists. “Amazon overwhelmingly dominates online book sales, with a market share comparable to Standard Oil’s share of the refined oil market when it was broken up in 1911. Even if you look at total book sales, Amazon is by far the largest player.”

It is the largest player that even Krugman is forced to admit “has not tried to exploit consumers.” Yet he posits the notion that keeping its prices “systematically low” is not a benefit for those consumers, as much as it allows Amazon to “reinforce its dominance.” That dominance is used to “squeeze” publishers to lower the price of book sales to Amazon, and despite the fact that Krugman has already admitted Amazon passes those savings on to its customers, he remains adamant that one of the most basic concepts of free-market competition is a bad thing. “In economics jargon, Amazon is not, at least so far, acting like a monopolist, a dominant seller with the power to raise prices,” he writes. “Instead, it is acting as a monopsonist, a dominant buyer with the power to push prices down.” Despite Krugman’s hand-wringing, one is inclined to think the public would look favorably on this effect on the marketplace.

He notes that people buy books because they’ve heard about them, other people are reading them, they’re a topic of conversation, they’ve made the best-seller list, and writers are promoting them. Yet Amazon’s “immense” power gives it the ability to “kill the buzz.” “It’s definitely possible, with some extra effort, to buy a book you’ve heard about even if Amazon doesn’t carry it,” Krugman concedes, “but if Amazon doesn’t carry that book, you’re much less likely to hear about it in the first place.”

Not exactly. There are innumerable ways for authors and publishers to promote books. One of those ways is known as “advertising,” a concept one hopes is self-explanatory. The other is promotion. Perhaps Krugman forgets that before Amazon, there was Oprah Winfrey, whose power was also so “immense” the book promotions she did on her daytime show virtually guaranteed best-seller status. In fact Krugman’s own newspaper described the former daytime talk show queen as “the publishing industry’s unrivaled tastemaker,” further noting that over the years “a book’s selection as an Oprah-sanctioned title translated into instantly skyrocketing sales of more than a million copies, extraordinary numbers for any title.”

In 2012, Winfrey revived her book club after a two-year break using her own 24-hr. cable network, the Oprah Winfrey Network (OWN), as the vehicle for doing so. One is hard-pressed to recall any column by Krugman advocating public action to curb the power of OWN.

Regardless, with regard to Amazon, Krugman sees a conspiracy at work. “So can we trust Amazon not to abuse that power?” he wonders. “The Hachette dispute has settled that question: no, we can’t.”

That dispute, the result of failed negotiations in which Amazon was seeking better terms, is described in another Times column by David Streitfeld. He characterizes it as a case of Amazon “bullying” Hachette. That bullying consists of Amazon charging more for Hachette-published books, suggesting readers might enjoy books from other authors, and in some cases, taking weeks to deliver a Hachette book if one was ordered.

Yet even Streitfeld was forced to admit Amazon’s dominance consists of controlling only a third of the book business, and that some Hachette writers remain “unscathed by the dispute.” Furthermore, he is forced to reveal the most likely reason for Amazon’s increasingly hard-line stance with publishers: Amazon’s “shares are down sharply this year and analysts are cutting earnings forecasts.”

Business realities apparently aside, Krugman describes the penalty imposed by Amazon on Hachette as being animated by a “curious selectivity.” “Last month the Times’s Bits blog documented the case of two Hachette books receiving very different treatment,” Krugman complains. “One is Daniel Schulman’s ‘Sons of Wichita,’ a profile of the Koch brothers; the other is ‘The Way Forward,’ by Paul Ryan, who was Mitt Romney’s running mate and is chairman of the House Budget Committee. Both are listed as eligible for Amazon Prime, and for Mr. Ryan’s book Amazon offers the usual free two-day delivery. What about ‘Sons of Wichita’? As of Sunday, it ‘usually ships in 2 to 3 weeks.’ Uh-huh.”

What a difference a couple of days apparently makes. Here is the Tuesday listing for “Sons of Wichita” at Amazon’s website. “Want it Thursday, 23 Oct.? Order it within 22 hrs 3 mins and choose One-Day Delivery at checkout,” the site states.

Uh-huh.

In a column for the NY Post, author and editor Ira Stoll takes Krugman to task, asking readers to imagine “if Krugman’s argument were applied to another ‘immense’ power in the book industry – The New York Times itself.” Stoll reveals that “Sons of Wichita” a book that attacks the Koch brothers, who are this year’s leftist bogeymen, “got a full-length Sunday review by Nicholas Lemann, was featured in the Times Book Review podcast, and was mentioned yet again in the Sunday Book Review as an ‘Editors’ Choice.‘”

Ryan’s book? “When it showed up at No. 5 on the Times bestseller list, the book review deigned to mention it in a two-paragraph item that denounced the book as being 'full of your basic agitprop’ and inaccurately described it as Ryan’s ‘first book,’ a distinction that in fact belongs to the 2010 book ‘Young Guns,’ which the Times itself handled back in 2010 with a four-sentence review that managed to be about 100 percent wrong,” Stoll explains.

Moreover, the “curious selectivity” of the NY Times best-seller list is hardly a new development. Conservative author David Limbaugh’s latest book, “Jesus on Trial,” was banished despite sales better than 17 other books on the list. The same treatment was afforded to Dinesh D'Souza’s “America: Imagine a World Without Her,” which had sales higher than 13 other books that made the Times best-seller list back in June.

Stoll whacks Krugman for his hypocrisy, noting that if his standard for demanding government intervention “is a powerful book-industry force treating two different books differently…the Times columnist ought to be calling for the Justice Department to rush into Midtown Manhattan and take dramatic action.” Stoll suspects Krugman’s self-righteousness concerns far more germane realities: the fact that Amazon CEO Jeff Bezos now owns the Washington Post, which competes with the Times, and the allegation that Bezos has a libertarian-oriented political view, which is at odds with Krugman’s statism.

That would be the statism that animates Krugman’s totalitarian impulses. He isn’t worried that Amazon is too “powerful.” The aforementioned example he uses to accuse Amazon of “curious selectively” is nothing more than a thinly-veiled example of a "right wing conspiracy.“ In reality he’s concerned that Amazon sells too many conservative books – and wants the government to crush them for doing so.


Originally published at FrontPage Magazine.

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