Book Recommendations

A good friend of mine recently retired from a part-time job at a subsidised book store run by the Students’ Union. A relatively banal event, marked by a celebratory dinner in a top Dublin restaurant at the expense of tax-payers and students.

The student-run book store in Trinity College is inefficient and unnecessary. Since it doesn’t help the targeted demographic of underprivileged students, it should be privatised.

For those unfamiliar with the Student Union (SU) book store, they deal in second-hand books and provide them to students at decent prices. The selection of books is not limited strictly to academic texts, and employees engage in an annual pilgrimage to London to purchase used books for the store – all paid for by the college, of course.

Let’s establish some background to the discussion. There is a high opportunity cost to locating the book store in the current on-campus location. If the college were to rent the space out to the highest bidder, no doubt that somebody would be more than willing to pay a significant sum for it.

Let’s imagine that the area was rented out by a private second-hand book store. This rent could supplant existing marginal revenue sources of the university – specifically, increases in the student registration fee. Would books be provided to students at lower costs? It depends.

The extra costs associated with private enterprise (to pay rent and profit) would be assuaged by increases in efficiency of service. The current student-run initiative is filled with croneyism and inefficiency – with hiring decisions made on vague ethos-based criteria, and the obvious difficulties arising when students manage their friends.

Meanwhile, the private firm would have the incentives and freedom necessary to impose efficient work-place practices and fire ineffective workers. Competition in the free market would ensure the most efficient book store secured the location. Even if prices were slightly higher (and they may not be), the new private enterprise would be selling more books to more people.

There may be an argument for taxing students through the registration fee in order to subsidise disadvantaged students who could not otherwise afford necessary books. Does this policy essentially achieve that? Not by a long shot.

Sure, the store supplies books – but there’s no guarantee that they’ll have the specific texts that poor students may be looking for. Ironically, the poorest students in the university are less likely to shop here and more likely to take books out of the library. It was a pointless policy to begin with.

What have we learned? The book store incurs costs on all students, as the opportunity cost would reduce the burden on students imposed by the registration fee. The book store imparts benefits on some students – those lucky enough to obtain a job through the incessant croneyism, and those who fancy purchasing whatever random selection of books are present.

If the college really wanted to support the disadvantaged members of our community, skip the middle man – who in this case is a cabal of rackateering students that exploit their privileged position by celebrating significant events in Trocadero. Book vouchers for the underprivileged could be administered far more effectively by the college.

Of course, if the university was forced to actually analyse the necessity of such a policy, they would soon realise that it was completely unnecessary. Is a student-run book store likely to supply titles that the college library doesn’t stock? Nope. Given that any student has access to the library, the college should stop wasting our money on the SU book store.

Republished as “Students’ Union Book Store: Inefficient, unnecessary, and doesn’t help the target underprivileged demographic” in the University Times (20th of January, 2010). See the official response “In defence of a student run bookshop” in the University Times (10th of February, 2010). See the letter in response “The student run bookshop” in the University Times (10th of March, 2010).

© The Free Marketeer 2010

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6 Responses to Book Recommendations

  1. Jack says:

    DCU did more or less exactly what you suggest, i.e. engaged a private chain to sell books on campus. As far as I remember, this resulted in students being gouged for even the most pedestrian of titles (which would presumably be available much more cheaply in second-hand in book shops far from the campus).

    In my experience, the solution you’re proposing was in effect just as unpalatable as the ‘cronyism and inefficiency’ you describe in Trinity.

  2. thefreemarketeers says:

    It sounds like they must have had a pretty poor competitive bidding process? I am surprised that profits like that are still to be had in the book industry given the huge amount of chains, durability of the product and the perfect substitutability (although I could be wrong).

    It also wouldn’t necessarily happen in Trinity. There are plenty of other places to buy books if they don’t stock them at a reasonable price! Surely there would have been fewer options near DCU?

  3. IheartMarx says:

    Hi, I’m just an average student in Trinity. I saw you’re article and was so outraged at your blithe narcissistic tone and Friedmanite corporatism that I decided to reply. On first inspection there are a number of problems with the claims you make above. Lets accept, arguendo, your theoretical claim that the free-market would produce the most efficient result. What causes such a theoretical framework to be inapt in this scenario?
    1. You assume that, in the event of tendering the bookshop’s current place in House Six, the (not-so) “free market” will cause a more efficient enterprise to supplant it . There are, however,a number of barriers to entry here. The competition with H&F and Waterstones makes such an enterprise unsustainable. When paying extortionate city-centre rents, running a bookstore in the city entre requires a critical mass to be reached in order to cover costs. I don’t think anyone would pay the rent because of the limited capacity and “out of the wayness”, nor do I think a business that foolishly did would survive very long (for several reasons to follow). You say, “no doubt that somebody would be more than willing to pay a significant sum for it”, but that just assumes the value there- you really have to point to a fact (or figure) in order for this to be true. Theoretical elegance does not equal truth.
    2.It’s suspect to say that the “increased costs will be assuaged by efficiency in service”. It’s tiny, and the increases in “efficiency” would be negligible. (because there is apparently very little involved in running the shop, and because it seems to be able to run at low-cost)- so, rather than using a term that imputes value, what is the actual value to be gained for students here?
    3. On your claim of inefficiency: First, there’s nothing to suggest that the bookshop is currently inefficient. Whilst this is arguable in a theoretical sense, it is hard to see in what sense this is actually true. What are you actually basing this on? Second, assuming that you could actually off-load the sinking-ship of a privately run bookshop in house 6, you’re assuming that efficiency in the form of selling more books would be better. But, for who? The private enterprise. Would students be likely to see any of that profit – probably not. If there was any hint that college would interfere they would scare off any business. Plus there’s no way the rent could be ratcheted up to coincide with the (unlikely) success of such a bookstore, because of the Rent Restriction Acts.
    4. What about all of the students who currently do buy cheap books in the bookshop, who would then no longer be able to buy them at this rate. Students who, through no fault of their own, cannot afford the high costs of text books. These are not your text-book case of “rational-maximisers”, although they probably wouldn’t know that because they wouldn’t be able to afford their economics text book. These students constitute part of the “common good” of Trinity, and you’re simply neglecting them in this theoretical framework and assuming that they can get all of their books in the library, which, evidently, is hardly ever possible. What’s more you neglect the distinction between the need to own a book and the need to borrow one. There is only a limited supply of books in the library for students, and often they are left empty-handed.
    5. “The current student-run initiative is filled with croneyism and inefficiency – with hiring decisions made on vague ethos-based criteria, and the obvious difficulties arising when students manage their friends.” First, you spelt “cronyism” wrong (sorry if that’s a low-blow). Second, do you know this or are you just asserting it? I have actually applied to the bookshop and have seen nothing untoward or biased in the hiring process – so your claims there are lies at best and defamatory lies at worst.
    6. You say that there’s no guarantee that the bookshop will have the books that poor students are looking for. Well, given that it’s purpose is to look out for these students, I think it’s safe to assume that they will deliberately procure these specific books as a priority. That’s the whole point of its existence. In any case it’s a high onus to set to ask for them to guarantee that they would have them, and you’re alternative is unlikely to meet it either – prices which wealthy students are likely to meet, will disable poorer students from buying books.

    Because your solution seems to be too abstract and unconcerned with the practicalities to be tenable, what reasons are there for supporting the bookshop.

    1. What you call “cronyism” is providing scores of students with jobs (unfortunately not me because I didn’t get hired although I know three people that did). This happiness must equally be counted in your utility calculus. What’s more, it’s arguable that this kind of happiness is far more valuable than the money which your alternative would purportedly generate.
    2. There’s a good atmosphere in the bookstore. An incommensurable and basic good not available in private stores.
    3. If you’re not a douche they provide you with free tea.
    4. You can get cheap books there – books that are expensive elsewhere and that you need for your course.

  4. thefreemarketeers says:

    Marx: thanks for your contribution! Interested to hear your thoughts, although I should start off by saying that I don’t know what Friedmanite corporatism is. Responding to your remarks in the order you presented:

    1. This point relies on a misunderstanding of how prices are set in the free market. If nobody in Ireland thinks they can make money from any enterprise in the location, you might be right. But I suspect that any number of small businesses could thrive here (say, a coffee shop?) that would be quite profitable. How much would you pay to own a coffee shop in the centre of Trinity College with thousands of students? If the current bookshop is able to compete with mainstream stores, why can’t a private one with the same resources?

    2. I disagree that the efficiency gains would be marginal. So much so that I gave you many reasons to back the remark up.

    3. I’m confused. You claim that the book-shop couldn’t be profitable. But now you claim that the profits will all be seized by murderous capitalists? I’m not sure why Trinity couldn’t charge whatever it wanted, but I am perhaps not as well versed in government rent control [concession]. Once again, a competitive free bidding process means that if there WERE profits to be made (assuming more than one person in Ireland was capable of recognising this), the price they were willing to pay college for this opportunity would be eroded. So college would be the real winner. EVERY student benefits, because they have more money to spend elsewhere, or more preferably could reduce the registration fee.

    4. What about students who buy books there? I genuinely disagree with you here. If you’re correct, then the SU book store must be selling enough text-books to reduce the burden on the library significantly (which is implausible). I also think it’s more than reasonable to expect students to work out of the library. If they really want to own the book, I’m sure that some enterprising individual or the SU could designate a day for an annual second-hand book sale and publicise it with some posters – all at considerably less cost than operating an entire shop all year round. More to the point – why should EVERY student be forced to subsidised books for SOME students? I don’t deny they have a pretty good deal at the moment. But we’re all paying for that good time, which isn’t fair. I imagine that most students who buy books there aren’t under-privileged either.

    5. Thanks for the spelling correction! The definition of cronyism and inefficiency is perhaps open to interpretation though. If you think the store is a paragon of efficiency and transparency, good for you.

    6. So they only exist to supply books students need, but that’s too high a burden to place on them? What a wonderful position they are in. Just because the store’s noble justification for existence demands that they satisfy student demands, doesn’t mean they will necessarily be capable of achieving as much. You may think it’s safe to assume they pursue every student’s individual needs as a priority? I don’t think it’s safe to assume anything of an organisation that is completely unaccountable to the students it serves. If you went in and asked for a book, and they didn’t have it, would they somehow obtain it for you? Or would they go back to drinking tea and surfing the internet. Also: let the poorer students eat cake and read books in the library. If the richer students want to be ripped off, that’s cool with me. Ultimately, that just means higher rent for the space and that money benefits ALL students.

    As for the benefits:

    1. I don’t care about the privileged few students that enjoy jobs at the book-store. Why should ALL students pay for privileges enjoyed by SOME students? Get a real job.

    2. If you want a nice atmosphere, pay for it yourself. Also, it’s not an incommensurable good. Look up the word ‘incommensurable’.

    3. The tea isn’t free. It’s just that you don’t pay for it. Good reason though to support tens of thousands of euro invested in a pointless shop! Free tea for friends of staff – Another great hallmark of efficient institutions.

    4. See every other remark that I’ve made about the topic.

  5. thefreemarketeers says:

    Also, you spent ‘inept’ wrong in your first paragraph. Good hustle.

  6. Barry says:

    People need to be told that the books are cheaper on amazon.

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