The Internet Effect

The big issue that faces Policy Makers around the globe in 2014 will be as follows; the cost of free, deflation in 2014 and beyond. 

Major companies look to form monopolies or near monopolies, this has been made easier by the Internet as they now have global reach for a lower cost base. 

The pivotal point is this, the business model of these businesses is to offer a particular service for free (the ultimate deflationary force), eg Google and Facebook, as companies they absolutely get it.  

These companies sell advertising and collect personal and private information that the consumer so eagerly hands over in exchange for FREE, nada, zippo, nothing, the companies then use this information to better target their audience and make additional money by selling this information to third parties who then use it themselves.

If you look at the top 500 websites by popularity you will notice that the majority offer services for free. 

How many people would pay for Facebook if it wasn’t free, you think they want to find out? 
This means that wealth is then concentrated at the top and what follows is a hollowing out of the middle class. 

And so it began. As more things become digitised the cost of distribution falls, and jobs are further eroded, e.g. iTunes and software distribution, e.g. Music and movie Industries. 

How does one keep their job when fewer people are required to perform a task, the company they work for is receiving less revenue and making less profits? 

This may end badly!  

I expect we will continue to see anger increase as more people are thrown on to the unemployment scrapheap. 

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