I reviewed Michael Sandel’s new book, [amazon_link id=”184614471X” target=”_blank” ]What Money Can’t Buy: The Moral Limits of Markets[/amazon_link], for The Independent.

[amazon_image id=”184614471X” link=”true” target=”_blank” size=”medium” ]What Money Can’t Buy: The Moral Limits of Markets[/amazon_image]

His recent BBC Radio 4 lectures, The Public Philosopher, are available as podcasts. The great man is back in the UK in a couple of weeks so no doubt there will be more events.

My conclusion?

“He ends the book with a question: “Are there certain moral and civic goods that markets do not honour and money cannot buy?” This is rhetorical. Of course the answer is, yes. But how do we know what they are?”

And I don’t think he actually answers that.

It will not have escaped the notice of British readers of this blog (about half the total) that it is still raining; and if you’ve looked at a long-range weather forecast with a sense of mild desperation, that it will continue raining for the rest of May. The only possible reaction is to curl up under a blanket or duvet with a book or several. Luckily, my ‘just read’ pile of books is outweighed by the ‘in pile’.

Just read vs still to read

There’s plenty in the weekend papers, too. The new British Library exhibition on landscape and British literature looks very enticing, and is featured in the Guardian Review. The illustration is from [amazon_link id=”0060119535″ target=”_blank” ]Remains of Elmet[/amazon_link] by Ted Hughes and photographer Faye Godwin. It’s one of my favourite landscape books, not least because I’m from more or less that part of the world, the Pennines in between Lancashire and Yorkshire, & find it so evocative of my childhood wandering around the moors. The feature also mentions a terrific book I reviewed here, [amazon_link id=”0224089021″ target=”_blank” ]Edgelands[/amazon_link], by Michael Symmons Roberts and Paul Farley.

Faye Godwin's Elmet

Meanwhile, over at the FT, there is an analysis of the e-books market and publishing, and some enticing reviews. I very much want to read E.O.Wilson’s [amazon_link id=”0871404133″ target=”_blank” ]The Social Conquest of Earth[/amazon_link], reviewed here. (It was the economist Alan Kirman who first got me very interested in ants thanks to his classic QJE article, Ants, Rationality and Recruitment.)

Ferdinand Mount’s [amazon_link id=”1847378005″ target=”_blank” ]The New Few: Or A Very British Oligarchy [/amazon_link]also looks like an excellent, angry-making book about the way a business elite has creamed off for itself so much of the productivity growth of the past couple of decades via their bonus scam. Thank goodness it seems to be the beginning of the end for that. The Telegraph has an article on the woman behind the institutional investors’ revolt, Michelle Edkins  of Black Rock.

As some English cities vote for whether or not they want to have elected mayors, and London votes in its mayoral contest, I pulled Ed Glaeser’s [amazon_link id=”0330458078″ target=”_blank” ]Triumph of the City[/amazon_link] off the shelf again. He writes:

“Much of the world suffers under awful governments, and that provides an edge for those cities that are administered well.” (p227)

His two examples of well-managed cities are Singapore and Gaborone. Can London or other English cities live up to the standard set by Botswana’s capital or the minuscule island state of Singapore? The UK as a whole has been a highly centralised economy – one of the most centralised if you look at William Nordhaus’s globe – and decentralisation would be healthy for major cities other than London and for the economy as a whole. It would for example make for an economy less dependent on financial services. Still, to have a mayor or not doesn’t seem to me to be the issue, so much as what decision-making powers are decentralised, and the quality of governance applied to decisions at the city region level.

[amazon_image id=”0230709389″ link=”true” target=”_blank” size=”medium” ]Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier[/amazon_image]

According to the Publishers Association, e-book sales in the UK have grew rapidly in 2011. Digital sales were up 54%, of which consumer e-book sales rose by 366% (I think these refer to revenues, not volume figures). On the other hand, the combined sales of digital and physical books decreased by 2% to £3.2bn, while average book prices fell by 1.3% (compared with a 2011 annual UK inflation rate of 4.47%). The release says: “All digital formats encompassing ebooks, audio book downloads and online subscriptions accounted for 8% of the total invoiced value of sales of books in 2011, up from 5% in 2010.”

It would be good to know how much of that average price decline is due to the change in the mix towards cheaper e-books – I suspect most, if not all. On the face of it, the decline in volume of sales is small, and not bad for a flat economy.

The e-book story becomes ever more interesting from a competition perspective. Who would have thought Microsoft would be welcomed as riding to the rescue to increase competition in the market for e-reading? That’s what its new deal with Barnes and Noble seems to offer. The DoJ has Apple’s ‘agency’ model in its sights, with the case it has brought against Apple and five publishers. These vigorously reject the accusation.This follows an EU probe launched in December.

The competition issues are fascinating; this is an industry with a small number of giant publishers and two retailers, not lacking in market power, with proprietary devices and control of the customer relationships. Even outside e-books, the publishers feel under pressure because of the market power of the supermarkets, one of the main outlets now for physical book sales.

When I sat on the Competition Commission panel that gave the go-ahead a few years ago for Waterstones to merge with Ottakars, publishers made the argument that they needed two high street, bricks and mortar chains to be able to bring new titles to the public. We felt then that Amazon would provide competition, as it did. But anyway, if the publishers were concerned about the decline of independent book stores, they could have opted to give bigger wholesale discounts to those stores, enabling them to compete with the supermarkets and online sellers. Or alternatively, they could have refused the deep discounts they were asked for by the supermarkets and Amazon; after all, readers would still want to get their hands on the next Harry Potter or Dan Brown. But instead, the publishers decided the current profit margin from sales through independents mattered more. It didn’t seem a sensible strategic decision, and the big publishers are reaping the whirlwind now they face a substantially concentrated retail market.

Actually, publishing seems to have responded much better than the music industry to the online challenge. They are innovating in terms of formats and enabling e-reading. If I were still a competition regulator, I’d be looking at e-reading standards and interoperability as well as the pricing model. And I’d have the Google Books Settlement questions, still on the FTC’s radar, at the back of my mind as well. The lesson of history is that when the titans of an industry, having been slugging things out among themselves, get mired in anti-trust cases, the coast is clear for a nippy start-up to enter the market in an unexpected way. It’s going to be fascinating to watch this one unfold.

There has been lots of interesting commentary on this case. This Ars Technica article has useful links. Here’s an analysis from The Verge. Here is Wired. This FT analysis has links to other stories on the issues. And a round-up from Indie Book Spot.