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It’s not just poor old Parky who is suffering from heavy discounting. Jeremy Clarkson (also published on 2 October at £20) is down to £7.35 new and £5.99 used. Remember the days — nearly 20 years ago — when newly published hardbacks cost a minimum of £15? The collapse of book prices is not only down to online booksellers: until 1996 book prices were controlled by the ‘net book agreement’, which fixed retail prices of new books. What the internet has introduced to the book trade, however, is a near-perfect market. Before Amazon, if you wanted a book, you had to pay the price that your local bookshop was asking. There were plenty of cheaper new and secondhand copies out there somewhere, but you didn’t know where. Now you do. The availability of market information has exposed a huge glut of books, and so prices have collapsed accordingly.
It isn’t just books. You want some designer clothes? You can try them on at your local store — and then buy them cheaper online. You want household goods? Even if you don’t want to buy them secondhand on eBay, you can be sure others will, and the existence of internet auction sites limits the prices which shops can charge. You want a computer game? Why go out and buy one when some nerd in Alabama has put some really good ones online for free? You want to go on holiday? Cut out the travel agent and book direct with the hotel and the airline. You want a film, or some music? There are plenty of discounted versions online, and if you don’t want to pay even those low prices, the chances are you can download a pirated version for free — illegal, of course, but then as millions have correctly figured, the chances of being caught are minuscule.
But you don’t even have to do anything illegal to get stuff for free online. The internet has created the expectation that information and entertainment — services which we used to expect to pay for — are free to the user. Who wants to buy an encyclopaedia, a street map or a guide book when the information is available so easily online? Or take newspapers. Numerous attempts by papers’ websites to introduce charging have ended in failure: as soon as they are asked for their credit card details, the viewers simply go elsewhere, where they know they can get the news, share prices or football results without paying. Collectively, it is a daft decision for newspapers to give their product away, and has much to do with declining circulations, but individually they have little choice if they still want to be read.
I don’t suggest that Gordon Brown attempts a Chinese-style block on the internet as part of his battle against deflation, but it is important to know why prices of so many things are going down: because the economy has not adjusted to the perfect market that has been created by the internet. Presumably in time it will. Fewer books will be published, especially those of the reference variety. Maybe someone will develop a much simpler way of charging a penny or two to view an online newspaper story — and without the user needing to pull out his credit card. Maybe the law will catch up with illegal downloaders, and music companies will regain control of their markets. We may eventually look back at the past decade as the internet’s great free introductory offer.
But in the meantime, however grim the recession, it’s nice to know that if we can’t afford to go to the shops or to the pub, at least there’s plenty to do for free.
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