Paul Krugman and the Economics of Books

Depending on where you buy the columnist's new book, there's up to a $15 price variance -- one that hurts not just publishers and writers, but readers, too.


Paul Krugman is a Nobel laureate in economics, a professor of economics and international affairs at Princeton, and a provocative columnist at the New York Times since 1999 with over 850,000 Twitter followers. He is also a bestselling author, most recently of End This Depression Now. Writers like Krugman are prized in the world of publishing -- possessing gravitas, while remaining sound investments because of their substantial popularity. The future of their work serves as a bellwether for the industry.

Krugman's publisher is the highly respected W. W. Norton & Company, founded in the 1920s and notable because, among other reasons, it has been owned by its employees since the 1960s. Norton's other authors include Michael Lewis, Joseph Stiglitz, Stephen Greenblatt, and Fareed Zakaria, as impressive a group of writers and thinkers as any in the country. Fortunately for Norton, it was not one of the five major publishers targeted by the Department of Justice in its antitrust allegations over e-book pricing.

In early September, a federal judge approved a settlement between the DOJ and three of those publishers -- Hachette Book Group, Simon & Schuster Inc., and HarperCollins -- which obliges them to adhere to strict requirements that places the setting of prices back in the hands of the retailers, most importantly, the dominant online bookseller. Two other publishers -- Penguin and Macmillan -- along with Apple, intend to go to trial to show that there was no collusion in the agreements that enabled them to adopt pricing strategies that had the effect of limiting discounts. Within days, under the headline "Publishers' Worst Nightmare: Amazon Again on Discount Warpath," Charles Cooper wrote on, "It's back to the future. . ." as Amazon again was discounting HarperCollins e-books with Hachette and Simon & Schuster sure to follow. The outcome of this protracted battle over prices will have a profound impact on publishing in the digital age, because it will ultimately determine what consumers expect to pay for books.

To get a sense of where the pricing issue now stands beyond the legal battles, I embarked on this simple exercise: I went to every major on-line retailer and a selection of traditional booksellers to find out what they were charging for Krugman's End This Depression Now. The title was published last April and reached as high as number 17 on the New York Times bestseller list for printed books. A starred review in Publishers Weekly concluded,  "Krugman has consistently called for more liberal economic policies, but his wit and bipartisanship ensure that this book will appeal to a broad swath of readers from the Left to the Right, from the 99% to the 1%."  According to Norton, the book has sold 30,000 copies in print, with e-book sales of 25,000. The list price for the book is $24.95, and every bookstore I called is selling it at that price. You can also order it directly from the publisher's website, but that comes with a shipping charge and sales tax where required.

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Peter Osnos is a contributing writer for The Atlantic. He is the founder and editor at large of PublicAffairs books and a media fellow at the Century Foundation.

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