I think just about everything in this article is accurate, but that it ultimately doesn't matter, because the particular class of goods that are subject to this is rounding error on an economic sector which, if you compared it to e.g. fixed income securities, would resemble a pimple on the nose of a particular emperor depicted on one coin of the vast horde that a dragon sleeps on.<p>Here's an interesting experiment for you: guess what portion of the US economy is video games, movies, music, and consumer Internet services put together. Now graph that against "Of the last 20 people you talked to, how many are white men between the ages of 12 and 24?" I think that graph shows a markedly upward slope. I also think that it does not asymptotically approach the right answer.<p>You could do a spiritually similar experiment with, e.g., cosmetics/beauty aids, wedding services, etc and young ladies. Or healthcare, if you're looking for a gigantic underestimation.
I believe Tyler Cohen's "The Great Stagnation" arrives at a similar conclusion, but I'd like to see hard numbers. In regard to entertainment, it'd be interesting to see a nomalized total $/hr comparison of various activities. For example, compare a standard movie in a theater to playing Dragon Age. That'd be roughly $15/hr (adding popcorn) vs. (120 hrs game play / ~60$ for the game) ~$.50/hr. That seems impressive, but .50/hr is still much higher than the 0$/hr that free broadcast television offers. I'd be curious to know how all these different types of media consumption shake out in the long run.
I agree with most of the article. However the author suggests that the net reduces the ability for sellers to price discriminate. I think it helps both sides, and the outcome is in doubt. On the one hand it enables faster and broader flow of price information, but on the other hand it reduces the anonymity of the buyer. I think what we will see is an arms race between buyers sharing information and sellers creating all sorts of ways to individually vary the discount they need to offer.
It seems that it sucks if your retirement portfolio consists of the industries being undercut and you need things like medical care. AirNurse, CrowdDoctor & 99medicines are unlikely to drive med prices down.
The interesting thing about this is that pretty much every point in the article can be read as: the internet changes consumer markets to be more like the idealized markets in economics textbooks.<p>Just a random observation, but it might be something for serious economists to look into.
It would be completely and totally awesome if <i>all</i> status were relegated to the Web. I would estimate the probability of that at at around 0.1%. People who were denied status on the Web would try to find some other means.