Last weekend, readers flocked into Charlotte Square to attend the Edinburgh International Book Festival.

This is supposed to be a philistine age, and yet the concertina crush for the biggest events, the reverence that greets writers' every utterance on stage, and the footsore queues waiting with Zen-like patience to have their books signed, show how highly novelists, poets and writers are still regarded - in some quarters at least.

Only a handful of the authors at the festival this year - or any - are best-sellers in the old-fashioned sense. In fact, it is a fair bet that even those at the pinnacle of their profession earn less than most in the audience. The adage that "all that glisters is not gold" was never more true than in the world of books.

In my experience, whenever two or more authors get together, the talk will soon turn to money. This is not a reflection of greed, but of the difficulty of making a living from books. The writer who does not feel aggrieved at being pitifully paid for their efforts is an amateur or hobbyist. In books as in every other trade, the price put on a piece of work is a direct reflection of its value, and a measure of respect for its creator.

In Evelyn Waugh's or Muriel Spark's day it was possible to earn a healthy income from novels and literary journalism. Today, only the most fortunate or independently wealthy writers can afford to devote themselves to writing books. Estimates of the average annual income for an author in the UK lie somewhere between £7,000 and £11,000, which is well below the minimum wage.

This is the backdrop to an ugly spat that has begun to attract international attention. For several months, the online bookseller Amazon has been in dispute with the publisher Hachette over the price of its e-books, which Amazon reckons is too high. Hachette, meanwhile, believes its prices reflect all the work that goes into each title.

Turning up the heat from a simmer to a boil, yesterday The New York Times ran a full-page letter, signed by more than 900 authors, protesting Amazon's "selective retaliation" against Hachette writers. This process, they say, includes delaying the delivery of their books and directing customers towards writers from other publishing houses.

Whatever Amazon's beef, the petitioners say that commercial conflicts should never lead to authors being penalised by a bookseller. Signed by the likes of Donna Tartt, Stephen King, Rose Tremain, Philip Pullman, and several who are appearing at Edinburgh, this petition is a howl of rage at the damage such an influential company can inflict on the income of writers "on whom it has built its business".

Publishing disputes are nothing new, and this one, like all the rest, will eventually be resolved. Yet whatever the outcome, it holds a sobering message for readers. As Charlotte Square continues to fizz with life over the next fortnight, and people go home happily clutching their autographed copies, nobody questions the idea that books ought to be dirt cheap, costing less today than they did 20 years ago. If it weren't for special offers and massive discounts, or so the wisdom goes, people would ignore them, and writers and publishers would soon go out of business.

Yet how can one put a fair price on a collection of poetry, say, or a magnificent biography? Quite apart from the sweat that goes into it, and the validation proper remuneration bestows on a writer, literature's influence or impact can be priceless. Compared with other forms of entertainment it is also inexpensive, and can be read and treasured for generations.

George Orwell famously wrote that "it is a great mistake to imagine that cheap books are good for the book trade... The cheaper books become, the less money is spent on books." So is it not possible that if books cost more, they might be better valued and become even more desirable? Publishers could then spend more on promoting titles, thus reaching a wider public, while authors would earn a better living, and be able to devote themselves to their craft.

Will it ever happen? Not if Amazon gets its way. But even if by some miracle writers' income suddenly soars, one thing is sure: they will continue to whinge about money. After all, what serious artist doesn't?