Duncan's Reflections

Few people would deny that the Internet has changed the media by which industries like the music industry distribute product. There are jokes about how young kids today haven’t ever used a CD (and what the heck is a record?). Until this week, however, at least I did not fully appreciate how completely the Internet has transformed not just the way we get our product, but the operation of the entire industry.

It’s not just the music industry. Newspapers, books, hotels, cars, and many more industries are being turned upside-down by the unprecedented efficiency granted by the Internet. I could spend all day delving into just one of these industries, but instead I want to focus on a couple of trends that I see spanning the affected industries.

The first is that Internet companies are not looking to hire a lot of people. One of the main advantages granted by the Internet is that more can be done by fewer people. When Blockbuster turned over to Red Box in Chicago, the 1323 employees of Blockbuster turned into 7 employees of Red Box, which was offering the same service. My question in class was “where are these workers going? Even if 7 of them get retrained to be Red Box employees, what happens to the other 1326?” The answer, it seems, is that the service industry is expanding. The opening markets sometimes create jobs. Think of Uber: someone has to drive the cars (at least until self-driving cars are developed further). Many workers, however, tend to get dropped into “Do you want fries with that?” positions. This creates a hollowing-out of the middle class, with a select few able to take advantage of the new technology and many of the working class getting the short end of the stick.

The second is that Internet companies know a lot about us, and because advertising is almost exclusively how websites make money, they will use our information to show us targeted ads. Originally, I had no idea why anyone would dislike this. Google or Facebook or whoever is going to show me ads no matter what, so they might as well be things that I might actually find useful. What’s the big deal? It’s helping me and the person trying to sell to me. The question someone posed, though, is “what if they offer you a higher price because they know you have more money or want the item more?” This doesn’t sit as well with me, perhaps because of society’s ingrained ideas of economic fairness and transparency. There’s certainly an argument that in a perfectly efficient market, companies will charge you more if they can based on your situation, and you’ll negotiate a better rate if you can based on the seller’s situation. The problem is as a consumer you don’t know the seller’s situation, so the idea of negotiation and perfect efficiency seems to go out the window. It looks more like a scam, when market vendors in foreign countries charge Americans more because we don’t know what their goods are worth.

I’m not certain about much with regards to what is right and wrong here. But these definitely seem like questions we should be asking about the Internet, rather than fighting over the privatization of domain name registrations.