Economics Politics and civics

Should Amazon replace public libraries?

LIU econ professor Panos Mourdoukoutas thinks Amazon should replace public libraries to save taxpayers money. He’s wrong, and his essay is poorly reasoned and an embarrassment to economists everywhere.

[Updated] LIU Post economics professor (and department chair) Panos Mourdoukoutas thinks the answer is yes, that “Amazon should open their own bookstores in all local communities” in order to “replace local libraries and save taxpayers lots of money” [1].

Yes, that’s in his lede paragraph.

My answer: not just no but hell no.

Mourdoukoutas teaches at a private institution [2] and focuses his Forbes-contributor writings on finance and the firm. The concept of public goods seems outside of his expertise; ditto the public sphere. That hasn’t stopped him from opining, however poorly reasoned.

Libraries as public goods

Public goods represent a unique form of market failure: non-excludability and non-rival consumption.

Rival versus non-rival goods


Non-excludability means non-payers can enjoy benefits. This means you do not have to be a taxpayer or have a library card to use public library facilities.

Non-rival consumption means that if something is offered to one person, it’s offered to all. No “tiered service” at libraries.

Some argue that libraries are quasi-public-goods because they have some rules: for example, residency required for library cards (which is muddied a bit by regional library collaborations). However that does not change the basic nature of their services.

Restrictions apply to checking out resources (far more than just books), not walking into a library and using the facility. If you go to a town that is not your home town, you can still walk in and use a public library. You just can’t check out a book or DVD (probably).

From private to public

Libraries used to be private (definitely excludable goods then). That changed when Andrew Carnegie established more than 1,600 libraries in the US.

In 1889, Carnegie outlined what he saw as the role of the “man of wealth” in serving the community. He believed that people with wealth should live modestly (“unostentatious living, shunning display or extravagance”) and care for family.

The monetary surplus left over should be administered (in the wealthy person’s lifetime) in a manner that is “best calculated to produce the most beneficial results for the community.”

For. The. Community.

The public library system that he put into place is situated in COMMUNITY NOT PROFIT.

Today’s libraries offer more than books, CDs and DVDs. In Woodbine, IA, the library loans cake pans, for example.




That’s because libraries serve community needs.

But this professor of economics sees no value in community or public goods, based on this lame excuse:

That’s $1.36 per day, which provides library services to everyone living at his address. You sure can’t buy a cup of coffee at Starbucks every day for this? Nor could you buy a book a day from Amazon. (Plus, do I really need to go into the issues of multiple people owning a book that they each only read once?)

Mourdoukoutas is also clueless about Amazon collecting state taxes (he thinks they don’t). Or maybe he’s a troll.


Twitter pushback

I have never seen comments outnumber likes or retweets like they do on his tweet: 5.5K comments but only 131 retweets.





Here’s a sampling of those responses, not all from librarians:









Breakdown of average taxpayer monthly rate for one library, compared to services:


Usually there’s a reason for the warning: don’t read the comments.

In this case, however, read the comments you must.

But don’t click on the link to his essay. Those clicks mean $ in his pocket.

[1] UPDATED Link to Forbes essay is now 404 (23 July 2018, 11 am Pacific)
Here’s a PDF from Google cache.

[2] The LIU econ department is part of the College of Arts and Sciences; the dean is Nathaniel Bowditch. His email should be

Featured image of UVillage, Seattle, Amazon store by SoundBruce

Cross-posted to The Moderate Voice

I drafted this post as a Twitter thread.

By Kathy E. Gill

Digital evangelist, speaker, writer, educator. Transplanted Southerner; teach newbies to ride motorcycles! @kegill

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