To get to the bottom of this story, Go To Hellman has dispatched its Senior Piracy Analyst (me) to Boston, where a mass meeting of alleged book traffickers is to take place. Over 10,000 are expected at the "ALA Midwinter" event. Even at the Amtrak station in New York City this morning, at the very the heart of the US publishing industry, book trafficking culture was evident, with many travelers brazenly displaying the totebags used to transport printed contraband.
As soon as I got off the train, I was surrounded by even more of this crowd. Calling themselves "Librarians", they talk about promoting literacy, education, culture and economic development, which are, of course, code words for the use and dispersal of intellectual property. They readily admit to their activities, and rationalize them because they're perfectly legal in the US, at least for now.
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For a more serious look at library economics, I suggest Hellman's post Why Libraries Exist where he cites a study comparing circulating libraries and video rental stores The study included the effects of transaction costs, production costs and the different values of owning and sharing, and found that library-like sharing benefits both publishers and consumers when the transaction cost of sharing is less than the marginal production cost:
1) more books will be read;
2) consumers will pay a lower price per reading;
3) the sellers will make a higher profit; and,
4) consumers will be better off.
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