Nate Anderson muses on the changing business models implied by the Internet, and what he doesn’t recognize as the ability to share as an advertising and marketing method – the social objects described by Hugh MacLeod.
The content industry “has a Chicken Little problem,” he says. “It may, in fact, be the case that the sky is falling. But, if you claim that the sky is falling whenever a new technology threatens an existing business model, the rest of the world can be forgiven for not believeing(sic) you when you claim that this time around it’s going to be different than all of the other times. Now, let’s be clear, each one of these technologies changed the business model of the industry. They caused certain revenue streams to decline. But they also opened up new ones.”
Of course, Henry Hazlitt covered this 60 years ago in Economics In One Lesson:
Among the most viable of all economic delusions is the belief that machines on net balance create unemployment. Destroyed a thousand times, it has risen a thousand times out of its own ashes as hardy and vigorous as ever. Whenever there is a long-continued mass unemployment, machines get the blame anew. This fallacy is still the basis of many labor union practices. The public tolerates these practices because it either believes at bottom that the unions are right, or is too confused to see just why they are wrong.
The belief that machines cause unemployment, when held with any logical consistency, leads to preposterous conclusions. Not only must we be causing unemployment with every technological improvement we make today, but primitive man must have started causing it with the first efforts he made to save himself from needless toil and sweat.
The Internet is a New Machine, which is allowing adapting businesses to prosper, and is causing the inflexible to fail, kicking and screaming, into obsolescence.
(cross-posted at nerdherd.com)