The New York Times - MARCH 15, 2014
WE
are beginning to witness a paradox at the heart of capitalism, one that
has propelled it to greatness but is now threatening its future: The
inherent dynamism of competitive markets is bringing costs so far down
that many goods and services are becoming nearly free, abundant, and no
longer subject to market forces. While economists have always welcomed a
reduction in marginal cost, they never anticipated the possibility of a
technological revolution that might bring those costs to near zero.
The
first inkling of the paradox came in 1999 when Napster, the music
service, developed a network enabling millions of people to share music
without paying the producers and artists, wreaking havoc on the music
industry. Similar phenomena went on to severely disrupt the newspaper
and book publishing industries. Consumers began sharing their own
information and entertainment, via videos, audio and text, nearly free,
bypassing the traditional markets altogether.
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