At a time when Israelis are struggling to pay for their food and housing, the
Knesset is about to adopt a new bill that would make reading a much more
expensive hobby. The bill aims to prevent bookstores from offering discounts on
new books for a certain number of years after their publication.
false logic behind this bill is to guarantee revenues to authors, so they can
create and preserve the national literature. In reality, price fixing will most
probably result in less books being sold and even less revenues for authors.
After all, the law can prevent books being sold at low prices but cannot force
individuals to buy books at any price. Banning discounts on books will also
disproportionally hurt the less well off, reinforcing social inequalities
Today, many families wait for special discounts (four
for NIS 100) to buy books for their children. Tomorrow those same families will
have to make do with fewer books. I found the refusal by high-profile Israeli
writers such as David Grossman and Amos Oz to have their books discounted during
book week to be simply shameful. It is a sad reality when successful authors
equate accessibility with humiliation. I guess they would rather be read only by
The idea of price control on books isn’t new. Israel flirted
with the idea a couple of years ago and similar laws have governed countries
like France and Germany for a very long time.
Other countries like the
United Kingdom and Finland had a policy of price fixing but decided to end it.
Book market policies center around two issues: the demand for books and the
supply. The most desirable outcomes are to increase the number of people that
read and buy books and at the same time to encourage writer creativity to
preserve national culture. Looking at international data, it is quite clear that
the countries that best achieved those goals are the ones that adopted free
FROM AROUND 1900 to 1997, the UK had a policy of price
fixing (very similar to the one proposed today in Israel), called Resale Price
Maintenance on books (RPV). Since 1997, when the UK got rid of the RPM, the sale
of books dramatically increased.
This increase was due to the entry of
new bookstores (online or supermarkets) driving the price of books down and
therefore increasing sales.
The price of books in the UK decreased by 17
percent for bestsellers and 3.3% for “deep range” titles. More people bought
more books regardless of their family income. I think we can all agree this is a
positive outcome. If we did choose to introduce a price fixing in the Israeli
market, the average price of books will go up and the average Israeli household
will buy fewer books and therefore will have less exposure to literature and
This is a very important point in a society where youngsters
fail in schools and are more prone to download a free movie from the Internet
then spend 100 NIS on literature.
Author creativity is also stimulated in
a free price environment. The number of new titles per capita a year, a common
measure for creativity, is much higher in countries without a price fixing
policy. Finland, which adopted a free price policy in 1970, has an average of
2.5 new titles per capita per year compared to countries with price fixing like
France (0.6), Germany (0.9) and Italy (0.6). Finland is a good example for
Israel; it has a comparable population size, has two official languages and few
people around the world read Finnish.
Increasing the price of books
through legislation is probably one the worst ideas of the year from our
politicians. The most likely outcomes are a decrease in book sales and a
reduction in creativity. Even if Israeli households were to keep their book
budget constant, they will own fewer books and will become more bestseller-
One may want to take a risk on a new author at a price X, but
not at price X plus 30 percent.
The higher prices may also discourage
book purchasing in general, with households substituting their book budget with
another, cheaper form of entertainment. New authors and the ones that don’t make
it to the bestseller list will be the first to be hurt by price fixing.
guess Grossman and Oz have done their homework.
Today, the book market in
Israel is booming and Israelis read more now than ever before. Thirty-five
million books are sold, and almost 7,500 new titles added annually, and the
creativity ratio is 1.14. Yes, reading and literature have become affordable to
all. It is a shame that Limor Livnat, and a few successful authors, find this
result distasteful and miss the old days when access to culture was restricted
to the very few that could afford it.
The writer is the director of the
Jerusalem Institute for Market Studies (JIMS).
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