How deflationary is the internet?

[william the wie]

Prices on just about everything have gone down as a result of the internet eliminating the need for middlemen. Ebay, Amazon and others connect consumers more directly to producers thus reducing prices and jobs. Since everyone uses the internet to access this board I figure that there are a lot of opinions intelligent or otherwise on this subject that I can tap so I set up this thread. Whither are we headed on this medium and since this is an economy thread how does it affect investments?

 

[B. Kidd]

Prices on everything have gone down as a result of the internet? Food, fuel, and electricity(utilities)?

 

[loosecannon]

It's a tough question WTW.

So far newsprint, the postal service location retail and myriad smaller industries have been destroyed by the inet. TV, radio, cinema and movie rental are soon to follow. Even the telephone companies are going bust. But mostly cuz of cell phones.

Marx said that technology would always be deflationary and would therefore create boom and bust cycles as the price of products was continually driven down and wages would have to be corrected.

Is it really the Inet, or just technology?

You say banking will go down. It could. The rest of location retail could go down as well. Along with a terrible lot of our service sector. But it will all be replaced with something new.

I think Marx was right. Automation is a bitch. It makes half of us disposable.

 

[Toro]

A fair amount.

 

[william the wie]

It's a tough question WTW.

So far newsprint, the postal service location retail and myriad smaller industries have been destroyed by the inet. TV, radio, cinema and movie rental are soon to follow. Even the telephone companies are going bust. But mostly cuz of cell phones.

Marx said that technology would always be deflationary and would therefore create boom and bust cycles as the price of products was continually driven down and wages would have to be corrected.

Is it really the Inet, or just technology?

You say banking will go down. It could. The rest of location retail could go down as well. Along with a terrible lot of our service sector. But it will all be replaced with something new.

I think Marx was right. Automation is a bitch. It makes half of us disposable.

I think Marx was halfright information and logistics technology is highly deflationary. Right now logistical technology is not very important with containerization in the late 60s/early 70s being the last major breakthrough. Automation can be deflationary as with US manufacturing employment however for the most part it is not. In fact the Iron Law of Wages notwithstanding the impoverished are getting steadily wealthier each decade and have been doing so since before Marx was a gleam in his daddy's eye.

 

[loosecannon]

It's a tough question WTW.

So far newsprint, the postal service location retail and myriad smaller industries have been destroyed by the inet. TV, radio, cinema and movie rental are soon to follow. Even the telephone companies are going bust. But mostly cuz of cell phones.

Marx said that technology would always be deflationary and would therefore create boom and bust cycles as the price of products was continually driven down and wages would have to be corrected.

Is it really the Inet, or just technology?

You say banking will go down. It could. The rest of location retail could go down as well. Along with a terrible lot of our service sector. But it will all be replaced with something new.

I think Marx was right. Automation is a bitch. It makes half of us disposable.

I think Marx was halfright information and logistics technology is highly deflationary. Right now logistical technology is not very important with containerization in the late 60s/early 70s being the last major breakthrough. Automation can be deflationary as with US manufacturing employment however for the most part it is not. In fact the Iron Law of Wages notwithstanding the impoverished are getting steadily wealthier each decade and have been doing so since before Marx was a gleam in his daddy's eye.

But prices for finished goods keep falling, and boom and bust cycles follow, as Marx predicted.

And wages in (former) manufacturing capitols have been falling since the 1800's. Wages have only increased in whatever developing economy each era favors.

The internet is not really unique in this respect, it is just one more automated technology that deflates prices and depresses wages in a rise and fall pattern that we call recession and recovery.

 

[william the wie]

I do not believe that the stats you are using accurately reflect the changes that have happened in manufacturing. The famines (Potato famine most famously but also pre-corn law) in the industrial cities of England and the sanitary epidemics (Such as Cholera) that often followed have faded. Telephone, television and appliances have also spread. That does not accord with the Dialectic.

 

[loosecannon]

You really lost me that time, WTW.

 

[william the wie]

You really lost me that time, WTW.

Wealth in terms of real goods and services available at the bottom have been going up continuously for literally centuries so the decline in real wages predicted by Marx are a myth. Income and wealth inequalities may be going up but so has the real wealth and income of people at the bottom of the social pyramid.