I’m always amazed at the level of ignorance our elected officials show in their interpretations of even the most simple of economic developments. Today, just as in yesteryear when the economic boogyman might have been the stocking frame knitting machine, those in power recoil in horror at labor and resource saving devices, seeing the development of such devices as a threat to jobs. The latest battle in the saga of officeholder vs. economic literacy pits Representative Jesse Jackson Jr. (D-IL) against the Apple iPad. This from Real Clear Politics:
“A few short weeks ago I came to the House floor after having purchased an iPad and said that I happened to believe, Mr. Speaker, that at some point in time this new device, which is now probably responsible for eliminating thousands of American jobs. Now Borders is closing stores because, why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble? Buy an iPad and download your newspaper, download your book, download your magazine,”
Gasp! The electronic media is cutting into the demand for physical books! What ever will we do?
Well, if Representative Jackson would take a moment to actually think critically, he might realize just how unfounded and silly his concern is.
The cost of an eBook is considerably cheaper than that of a physical hardcover release. For example, Tina Fey’s new book Bossypants has a list price of $26.99 at Barnes and Noble (although retail prices vary). The very same book, purchased electronically for a Barnes and Noble Nook or iPad, retails for $12.99. That difference represents a savings to the consumer (remember those people?) of $14.00. With that extra $14, the consumer can purchase more goods and services. He has his book and now he can, in addition, afford a ticket to a movie. The movie theater becomes the beneficiary of the new innovation, and the jobs that may be lost with the book seller are recovered in this other sector of the economy. The consumer has also benefitted as his purchasing power has increased, as they can now read Tina Fey’s book AND watch the latest derivative piece of crap or remake out of Hollywood.
Of course, there are far too many effects that will unfold as a result of the switch from the physical book format to the eBook to completely catalogue them here. Some of those effects will be disruptive to the economy as money shifts from sector to sector to meet new demands and realities. But one thing it will not do is eliminate jobs.