Has The Internet Changed Economics?

from the excellent-question dept

The Economist has a good article about the internet and economics. It's actually the first in a group of articles that all look very interesting on the topic. The basic argument (which I've supported for a very long time) is that the internet has not changed fundamental economics in any way. Many people seem to think it has, but they're in for a shock. While there is definitely evidence that the internet improves productivity and does other good things, that doesn't mean anything fundamental has changed. One other point on this (not from the article) is that on the question of "does the internet increase productivity" for years people pointed out there was no proof that it does in the aggregate. Yet, plenty of companies had success stories due to IT. The fact was there were also plenty of companies that had failure stories. I think internet technologies have the potential to improve productivity but for a very long time people weren't exactly sure how, (it's not quite as obvious as just adding a steam engine to the process) and thus there were many failures. Now, there's enough history that people are beginning to be more inclined to setting things up correctly - and less need for random experimenting.