Daily Speculations

The Web Site of Victor Niederhoffer & Laurel Kenner

Dedicated to the scientific method, free markets, deflating ballyhoo, creating value, and laughter;  a forum for us to use our meager abilities to make the world of specinvestments a better place.



Write to us at: (address is not clickable)

Adventures in Retailing Part III: Manhattan Bookstores, by Ross Miller

There was a time when going into a bookstore gave me a thrill. I would go out of my way to visit them. One by one, however, my favorite bookstores have either gone out of business or were co-opted by the mainstream. My earliest bookstore expeditions were as a high-school student in the 1960s. Although downtown Elizabeth, New Jersey still had something to offer the bibliophile--an independent bookstore, the book sections of the big department stores, and two substantial used bookstores (none of these have survived to the present, nor have replacements for them appeared)--Manhattan ( The City ) was where the real books were.

Yes, Virginia, there once were bookstores on the main shopping drag of Fifth Avenue. Lots of them. To me, the Doubleday bookstore was the focal point, but it was difficult to go more than a block or two in the heart of midtown without running into a bookstore. And downtown, where rents were lower and it was hip to be an intellectual back then, had an even higher density of bookstores. The largest of them was the flagship Barnes & Noble with its sales annex across the street.

Manhattan's bookstores served as valuable function aside from being a place to buy books and related items. At a single glance one could get a feel for what was hot (or, more correctly, what was hot a few years ago given the long publication lag) in a given field. Such insights were even more valuable when tracked over time. For example, my favorite bookstore for books in math, statistics, computers, economics, and finance was the McGraw-Hill Bookstore, located underneath the McGraw-Hill Building on the southwest corner of Rockefeller Center. I can remember a time when I could stuff every book from a major publisher on options and derivatives securities inside my briefcase and have room for lunch. Over time, I saw options and derivatives sprout their own section within the finance books that would grow longer every time I visited the store.

The McGraw-Hill Bookstore, like so many of Manhattan s great bookstores, is no more, having bit the dust in 2002. On my last few visits there, I wondered how it managed to stay in business so long. In a world of rabid discounting, virtually every book in the store sold at the publisher s list price. The service in the store, such as it was, crossed the border into rudeness (I have one particular employee in mind). Increasingly, I saw my fellow customers furtively scribbling down titles and ISBNs and the lines at the checkout counter vanished. By its own admission, the bookstore had fallen victim to the Internet.

Another of my favorite Manhattan bookstores, the Coliseum, also vanished in 2002, but it managed to resurrect itself in Eisnerland on 42nd street the following year. I have not visited the new store, but reviews on the web indicate that it has lost a bit of its charm and square footage in transit. The Coliseum was an excellent marker of the state of Manhattan culture. The front table was a ten-second guide to which books were currently hot with the media people. And if you were really lucky (or unlucky), you could end up on the Letterman Show. While many celebs frequented the store, Dave s theatre was a few block down and when he showed up, he brought cameras with him.

All told, it seems like Manhattan has at most a quarter of the bookstores that it had during the great literacy boom of the 1960s. The bookstores that remain tend to be larger and most of them were built during the great chain bookstore explosion of the 1990s. Sadly, the copies are not nearly as good as the originals. Take Barnes & Noble, for example. The original downtown store was notably for its comprehensive collection of textbooks. When I worked at GE, I would drag my interns down to the store and buy them the books that they needed to fill the holes in their technical backgrounds. (We stopped letting GE s top executives visit my office because when they saw all my books they would say Have you read all of those? and think to themselves Am I paying for those? ) I can now get several varieties of Tarot cards at my local Barnes & Noble, but almost no textbooks. The name of the store is the same, but the contents are vastly different.

Manhattan and other large cities are lucky that they still have physical bookstores. I noticed that several years ago, bookstores began to disappear completed from suburban malls. Two bookstores used to be standard issue for malls (one B. Dalton and one Waldenbooks). Now, many smaller malls (as well as some larger ones) have no bookstores at all. Of course, two things are happening. People are buying fewer books, especially books that are not linked to the world of entertainment, and what books are being bought are not being purchased in bookstores--the Internet and the discount retailers have taken big bites out of the book market. But something deeper is going on. Books are moving from the physical realm to the digital realm. Browsing through a bookstore is becoming like searching for radio stations by turning a dial. Before I take another whack at Google, I will bring my adventures in retailing series to an end with a visit about 50 miles north of Manhattan to Woodbury Common. This upscale outlet mall has thrived at a time when many traditional Upstate New York malls have been bulldozed and replaced with big-box retailers. What s more, Woodbury Common may just underline the illusory nature of America s merchandise trade deficit.

Kim Zussman responds:

At the risk of revealing one's autodidactilleteracy (don't look that up), internet has personally reduced need for bookstores. That's right, Al Gore's internet - so much available; all of it true, vetted, and factual just like at the bookstore. And for singles, the old ploy of meeting intelligent soul-mates at the corner bookstore has, to some degree, been supplanted by scanning for web-based green-card aspirants. It is such a better world with all human knowledge at one's fingertips. At the office, many consultations with 20-50 questions based on patient's educated consumer web-based research. Noticed chain-reaction type growth when one answer leads to three new questions. Now instead of charging by procedure fees are on a per-question basis.

Pamela Van Giessen offers:

Kim Zussman said "Needless to say the internet has changed morality."

Um, this is kind of like saying "guns kill." Obviously guns don't kill, people do. The internet has not changed morality, people have made an intentional decision to behave immorally, and without regard for others, and/or they are too lazy or ignorant to teach their children moral behavior that is key to the success of capitalism, without which they wouldn't have that cool Mac, ipod, or get quick and effective treatment for whatever ails them, etc.

The good news is that internet theft, unlike Xerox copy theft of old, is more easily discovered, and usually shut down (most countries will force service providers to shut down sites with stolen goods, even China) so in that sense it's enforceable in the same way that the police are more easily able to catch kiddie pornographers online than in their old offline world. While it's nearly impossible to prosecute online freeloaders and their customers, they can and are stopped (til they set up shop elsewhere and round we go).

I just find it depressing that specs, of all people, would not only engage in freeloading but admit to it! I am hopeful that other specs will avoid unilibrary and other bootlegging sites lest they become like the denizens of the town who filled the vat with water instead of wine. Coincidentally enough, one Rabbi Glickman used this reference in a sermon on the evils of Napster. To the point of speculation, every tear in the fabric of the social contract weakens the markets and limits opportunities for speculation. Specs, especially, have a very vested interest in maintaining healthy markets. Bring down enough enterprises due to theft or fraud or whatever, and you bring down the capital markets too. See every country that doesn't have strong capital markets, and thus limited opportunities for all.

Gibbons Burke says:

In order to clear a minor traffic violation from my driving record I enrolled in a driver's education class. The free market provided several alternative school choices, the most popular being "Comedy Driving School" where the class was taught by aspiring stand-up comics honing their craft before a captive audience. On the first night of class the instructor/comic asked us to complete a questionnaire about ourselves and one of the questions was "What would you do if you had the power to become invisible for 24 hours?" The questionnaire's were handed in and the teacher read the answers aloud to the class - fodder for his act.

I was somewhat taken aback to learn that, not only would the vast majority of my fellow students, granted the power of invisibility, commit acts of grand larceny, violent revenge upon their enemies, and voyeurism, but I was completely dumbstruck by how freely they would admit to otherwise suppressed urgings. I realized then how thin a veneer is civilization on top of the base, sinful nature of mankind. This occurred just as Mosaic was released by NCSA, giving birth to the popular use of the Internet through the World Wide Web. Here, then, was a place where people could operate in the world with the cloak of invisibility and anonymity, and so comes as no surprise for me that it has become a massive petri dish in which the malignant nature of mankind can be observed to thrive on a rich broth of possibilities and opportunities without the normal consequences attendant to the physical world.

But, then again, the Internet has also allowed us to see man operating at his very best - coming to the aide of unknown persons suffering on the other side of the globe in near real time. It has brought to bear efficiencies in the distribution of goods and vital information that will allow mankind to support itself with less labor expended and more profits earned, which should translate into the betterment of the condition of mankind at both the upper and lower reaches of the spectrum of wealth distribution.
So, no, I don't agree that the Internet has changed man's basic morality; however it has provided men a cloak of no-accountability and reduced the risks of getting caught, even as it increases the abilities of others to observe the act. It has raised a magnifying glass to our species' many warts. The difference between a moral man and an honorable man is that the latter always regrets a discreditable act, even when it has succeeded and he has not been caught.

Conscience - The inner voice which warns us that someone may be looking. [H.L. Mencken]

Kim Zussman rejoins:

The contention is that morality, like other manifestations of the intracranial conflicts between emotion and reason, is the result of a two-stage process: Intention and execution. First is an urge or impluse, which is approved or vetoed by cognitive filters such as societal norms and religious doctrine. Every Sunday millions are warned not to indulge their desires lest they burn in hell (or a molten iron-nickel core, whichever comes first). Should we doubt that boys might wish to be invisible in the girl's locker room, or that nuns and priests like celebacy?

The internet changes morality not because the nature of secret desires has evolved but because the filters have.