Tuesday, January 8, 2008

EU: European paternalism: no bargains allowed

The Jan. 5-11 2008 edition of The Economist featured a telling column on p 42, “Charlemagne: Shop-worn arguments: What strict national rules on shopping hours and sales reveal about European views of competition.” The URL is this: (may become archived and require subscription). Charlemagne, remember, was the ‘father or Europe.”

The story discussed the limitations on time when retail stores can have sales, and even limitations on hours. There seems to be particular concerns about clearance sales or sales at a loss. Sales must be “seasonal”; items may not be brought in for them, and sometimes 2-for-1’s etc, are prohibited. Most of the article focused on Belgium, which I visited just once, in May 2001, long enough to see an entertaining clown show in the train station. In 1999, however, in Germany I arrived on a Saturday (in Berlin) of a “long holiday weekend” and found almost no shops open, even Monday when I made a day train trip to Dresden. What was open was nightlife, and some bookshops near the Brandenburg Gate and Checkpoint Charlie.

I recall the early days of record collecting, when I took pride in finding $4.98 mono records (stereo hadn’t been around too long) at 2 for $3 or something. It seems as though Europeans do want to keep a lot of protectionism, maybe to prevent Wal-Mart or McDonalds racing through (although I’ve seen Golden Arches in French films).

There is something unsettling about trying to keep business owners from advancing their long term prospects by regulating their short term ability to charge less for certain things. (Actually, his happens in the United States with gasoline stations, possibly increasing prices for everyone more.) Imagine doing this with the Internet, where there is so much “free content,” because the establishment needs to pay its big salaries. When I see things like the WGA strike, with which I have some actual sympathy, or contemplate all the arcane provisions of the DMCA (Digital Millennium Copyright Act) I wonder if this could be the next issue.

The last section of the article was called “The power of vested interests.” Indeed. It is a curious story, given the power of European banks and companies (like ING) in a world of globalization.

Of course, I don't know how the individual countries within the EU (besides Belgium) compare on this. Maybe the Netherlands (the Dutch supposedly invented the modern stock market) is better about this.

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