In Which I Pretend I Know What I'm Talking About

Every blogger eventually becomes a crank to some degree or other -- you all know that, right? I've been at this for seven-plus years, so it's probably time for me to turn that handle another few turns and find something really nutty to obsess about.

Which is to say that I've had a thought lately that seems plausible inside my own head, though I'm sure it would be laughed at heartily by people who really know about economics. But, since I'm already typing, let me lay it out for you, and then you can explain why I'm wrong.

It's obvious that previous technological and organizational advances -- railroads, stirrups, the wheel, automobiles, the detailed division of labor, antibiotics, air conditioning, etc. -- allowed more business activity, and thus more jobs, more profits, and an expanding economy. That's the general mantra of progress, and it's a clear and obvious progression -- it may not have always seemed like a bigger economic pie to the Luddities who were thrown out of work at their looms, but there was definitely more products being produced, and a greater total value of products entering the marketplace (and there being exchanged for real money). Again, I'm no economist -- so I may be completely wrong about this -- but it looks to me like the transformation sparked by the Internet is very different: that its defining factor is that behavior that was previously part of a business process is being supplanted by similar behavior that does not generate revenue for anyone -- or, in some cases, generates substantially less revenue than the prior model did. Or, perhaps, some transformations are not as complete, so there's still some revenue attached, but not nearly as much as the pre-Internet version.

Some examples:
  • Classified ads, which generated tens of millions of dollars of ad revenue yearly for newspapers, are replaced with free-to-the-user websites like Craigslist.
  • Physical advertising -- primarily print, in newspapers and magazines, but some outdoor and other formats -- is replaced by a much smaller spend for online advertising.
  • CDs are replaced by downloads, and ad-supported radio is replaced by promotional streaming websites and, occasionally, by ad models that bring in, again, much less revenue.
  • Hardcover books are replaced with cheaper ebooks.
  • Local newspapers are replaced by mostly unpaid bloggers.
  • Software development companies are replaced by open source.
  • Journal publishing is under pressure by the concept of "open access" -- essentially that the public should get for free the research that their tax dollars helped fund.

(I'm not even touching piracy of digital materials, since that's completely separate -- what concerns me is the devaluing of the work and the goods, even when there's some chance of payment.)

In many of those areas, there's still some money -- actually, enough money that a few superstars can grab a lot of it. That, I think, has camouflaged the larger picture, or made it look like every other transition -- there are winners and losers now, just like the buggy-whip era! But there are only a few winners, and a whole lot of losers. And there are large areas where entire job categories have disappeared, and have only been replaced by unpaid hobbyists. Sure, there are a million food bloggers out there now -- but how many restaurant critic jobs have been lost to get there?

I don't see how this is a sustainable trend for any economy: that more and more activities are done for free by people who hope they're good, lucky, and popular enough to be among the few to actually get paid for it. And I don't have any answer to the problem -- we clearly can't go backward, and those old models are pretty well smashed now, and are being smashed in more and more areas each year. But I don't like the way things are going, and I don't see how we can get from here back to any kind of economy where well-paying jobs are increasing and I can hope that my sons will do something neat and interesting twenty years from now.