A great think piece from Daniel Knowles, the enfant sensible of the Daily Telegraph. His basic argument is that thanks to the internet “all sorts of things we used to pay large sums of money for are now nearly or completely free.”
New and exciting online businesses may be replacing old offline businesses, but the profits they can make per customer – and therefore the jobs they can generate – are being squeezed. For instance, this is his comparison of Facebook, the social networking giant, with Yell, the publisher of the Yellow Pages:
Another telling comparison is between two encyclopedia publishers – Wikipedia and Britannica:
Knowles is careful to point out that “the Luddites were wrong”. But why were they wrong? The answer is because the machines of the industrial revolution didn’t just allow existing needs to be provided more cheaply, they unlocked new sources of wealth – and, moreover, enabled human labour to be used more productively in the process. Therefore the industrial revolution increased both the value of labour and the means to pay for it. Consequently, the result was more jobs and higher wages for just about everyone.
Now, can the same be said for the internet revolution?