Sunday, May 27, 2012

The Facebook Illusion

Ross Douhat says he takes dyspeptic pleasure from Facebook's disastrous IPO. It shows, he argues, that there is a more general illusion: that Web 2.0 is a durable new economy.

From the lowbrow to the highbrow, LOLcats to Wikipedia, vast amounts of Internet content are created by people with no expectation of remuneration. The “new economy,” in this sense, isn’t always even a commercial economy at all. Instead, as Slate’s Matthew Yglesias has suggested, it’s a kind of hobbyist’s paradise, one that’s subsidized by surpluses from the old economy it was supposed to gradually replace.

A glance at the Bureau of Labor Statistics’ most recent unemployment numbers bears this reality out. Despite nearly two decades of dot-com enthusiasm, the information sector is still quite small relative to other sectors of the economy; it currently has one of the nation’s higher unemployment rates; and it’s one of the few sectors where unemployment has actually risen over the last year

Of course, I'd argue it's a more general phenomenon than just social networking. Other sectors of the economy are going to face steadily more employment pressures too.

I can't help feeling some schadenfreude at Facebook myself, even if Maek Zuckerberg still walks away with $17 billion nonetheless. I have a Faceook account but hardly ever log in. I just don't trust the company. I don't want it to have personal information, and then change its privacy settings in some complicated way yet again.

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