Monday, 7 October 2013

You just have to love the French

From the Economics of information blog comes this wonderful insight to French economic thinking:
According to an article on today:
France’s parliament has passed a law preventing internet booksellers from offering free delivery to customers, in an attempt to protect the country’s struggling bookshops from the growing dominance of US online retailer Amazon.
Wouldn't you just love to be a consumer in France? Your parliament deliberately sets out to make you worse off. Yes, politicians are your friend ................ not!

Why do politicians think that protecting the inefficient and obsolete is a way to enhance welfare? Isn't the very fact that consumers are buying from stores like Amazon a message to politicians that these consumers want the services that these online store have to offer rather than the services offered by more conventional business? In which case what we seem to be seeing is creative destruction and to try to prevent it will only lower social welfare.

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