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"they valued free Internet services at ... less than 1 percent of G.D.P." So Pandora, Facebook, Hacker News, YouTube, Google, Wikipedia, gmail, google maps, Re

"they valued free Internet services at ... less than 1 percent of G.D.P." So Pandora, Facebook, Hacker News, YouTube, Google, Wikipedia, gmail, google maps, Reddit... all of these together are worth less than $50/month? Would any of you give up all the free parts of the internet for $50/month? And look back 30 years: everything has gotten so much better. Rotary dial landlines have been replaced with smartphones. Houses are better and bigger. Cars are better, more comfortable, safer. Children's toys, strollers, playgrounds are so much safer and more convenient. Music has changed from a few CDs to thousands of songs carried around in almost every pocket. The numbers don't seem to make any sense to me. Marc Andreessen is onto something. The economic numbers don't make any sense when you compare them to reality.

revelation 11y ago
How does all of that relate to how much better it could be? It's silly to take a fixed point in time and just declare "I think we are all pretty happy here", it's extraordinarily silly to do that as Marc Andreessen.
- thedevil 11y ago
  I definitely think we're nowhere near where we could be. I just meant to say that the article's claim that slow productivity growth is "real" doesn't make any sense. We definitely could be doing much better though.
  - toomuchtodo 11y ago
    >We definitely could be doing much better though. The question shouldn't be: "what more can we have?" then. It should be: "how can we work less?" http://groups.csail.mit.edu/mac/users/rauch/worktime/ http://groups.csail.mit.edu/mac/users/rauch/worktime/ "An average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950. (The data here is from the US, but productivity increases in Europe and Japan have been of the same magnitude.) The conclusion is inescapable: if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week." To do that, you must legislate a reduction in work hours as productivity increases. Otherwise, corporations and shareholders see all of the gains while workers continue to slave away.
    - toomuchtodo 11y ago
      I can't edit this comment, but hey YC! If you're looking for a basic income candidate who'll spend the money to survive while working as an activist for legislation to reduce working hours in the US, I'm your guy!
      - Joof 11y ago
        Sounds like adding bias to a study :p. Do a Kickstarter?
thedevil 11y ago
And here's an idea to explain the mismatch. Not sure if it's right, but it might explain why the numbers make no sense: newspaper -> hacker news, google news: GDP drops, but life is better. stereo + CDs -> mp3 player: GDP drops, but life is better GPS -> Google maps, GDP drops, but life is better. snail mail -> gmail, text, GDP drops, but life is better.
- superuser2 11y ago
  >newspaper -> hacker news, google news Um, what? Google News doesn't do reporting, it aggregates newspaper content. If the traditional media outlets die, there will be no content left for Google News to aggregate. Unless you are referring the part of the newspaper industry which actually puts ink on dead trees, which is pretty small compared to the newsrooms. People write posts that go on HN to promote themselves and their business interests. Nothing wrong with a little of that, but it isn't a substitute for journalism.
  - undersuit 11y ago
    Newspapers aggregate news as well. The point is you buy the newspaper for all or most of the content or you visit Google News or Hacker News. They are portals. >it isn't a substitute for journalism. No true journalist would ever impinge their profession by writing for such trash as a blog.
    - deleted 11y ago
      [deleted]
    - superuser2 11y ago
      I am using "newspaper" in the sense of "organization which pays reporters and editors to produce a textual representation of the news of the day." So perhaps this is semantics. But Google News does not do that. Google News is sort of similar to the business unit of a newspaper which takes finished copy in digital form from the newsroom and actually delivers dead trees to people's doors. Of course the internet should (and will) kill that entirely. Journalism is a professional craft. Writing about current events for free because you are passionate about some issue, or for a salary because your benefactor has a vested interest in some issue, etc. is not journalism. Your income has to flow from the fact that people want the news, and you/your bosses/your editors have to be properly incentivized to actually report the news.
jonathankoren 11y ago
> So Pandora, Facebook, Hacker News, YouTube, Google, Wikipedia, gmail, google maps, Reddit... all of these together are worth less than $50/month? Would any of you give up all the free parts of the internet for $50/month? With the exception of Wikipedia, and Hacker News -- which is more of loss leader for Y Combinator -- all of the services you listed are run by for profit companies. Clearly they're making more than $50 month.
- thedevil 11y ago
  Google and Facebook have combined annual revenue around 80B, or around $20/month/person in the US. And the $50 was rounding up. We're still underestimating value. Dramatically.
dcre 11y ago
We are, of course, paying for those services, just indirectly. We buy from the companies that advertise with them. The 1% of GDP ($106 billion) in the study refers only to the chunk of the value that we are not paying for in this way. You are confused because you are considering both numbers together.
- thedevil 11y ago
  I'm not confused, I was just disregarding advertising in my comment because I assumed it only captured a tiny portion of the value. According to my first Google result, total US internet ad spending was about $60B last year (~$15/month), so my assumption was pretty reasonable. The $106B is closer to $30 than $50 (I rounded up). So the combined ad spending and the 106B estimate together is about $50 per month per person. It's actually more complicated than that - companies like Comcast also capture a (disproportionate) share of the value created. But even when you add it all together, it's still a big underestimate of the value created.
williamcotton 11y ago
What you're talking about is called consumer surplus, and it's the same argument that Marc Andreessen has been making. Rents are a real issue with real consequences. It doesn't matter how much cheaper your phone, or your heroin, or your cigarettes cost unless they make your life more productive. You gotta be able to pay rent. If you buy a table saw and a tool belt and learn how to use them, you can make money, and then you can pay rent. If your table saw gets cheaper, you get to benefit from that consumer surplus. If your heroin or cigarettes get cheaper, you get no benefits from that consumer surplus, unless you want to argue that the temporary highs from drug use lead to long term productivity. A cheaper TV does not make you more productive. What we can actually see in these studies is that cheaper phones and more time spent on Facebook do not make people more productive. Sitting around watching cheaper and cheaper videos on your cell phone is about as productive as nodding off on heroin. --- In some circumstances, policymakers might choose to disregard consumer surplus because they do not respect the preferences that drive buyer behavior. For example, drug addicts are willing to pay a high price for heroin. Yet we would not say that addicts get a large benefit from being able to buy heroin at a low price (even though addicts might say they do). From the standpoint of society, willingness to pay in this instance is not a good measure of the buyer's benefit, and consumer surplus is not a good measure of economic well-being, because addicts are not looking after their own best interests. - Principles of Economics, N. Gregory Mankiw, p. 140 --- The numbers don't make any sense to you because you're not thinking like an economist. The reason why we care about actual trade value and money changing hands is because that's what economics is all about. It's about real people paying real rents and real people buying real food. You can't pay rent in Facebook "likes".

revelation 11y ago

How does all of that relate to how much better it could be? It's silly to take a fixed point in time and just declare "I think we are all pretty happy here", it's extraordinarily silly to do that as Marc Andreessen.

thedevil 11y ago
I definitely think we're nowhere near where we could be. I just meant to say that the article's claim that slow productivity growth is "real" doesn't make any sense. We definitely could be doing much better though.
- toomuchtodo 11y ago
  >We definitely could be doing much better though. The question shouldn't be: "what more can we have?" then. It should be: "how can we work less?" http://groups.csail.mit.edu/mac/users/rauch/worktime/ http://groups.csail.mit.edu/mac/users/rauch/worktime/ "An average worker needs to work a mere 11 hours per week to produce as much as one working 40 hours per week in 1950. (The data here is from the US, but productivity increases in Europe and Japan have been of the same magnitude.) The conclusion is inescapable: if productivity means anything at all, a worker should be able to earn the same standard of living as a 1950 worker in only 11 hours per week." To do that, you must legislate a reduction in work hours as productivity increases. Otherwise, corporations and shareholders see all of the gains while workers continue to slave away.
  - toomuchtodo 11y ago
    I can't edit this comment, but hey YC! If you're looking for a basic income candidate who'll spend the money to survive while working as an activist for legislation to reduce working hours in the US, I'm your guy!
    - Joof 11y ago
      Sounds like adding bias to a study :p. Do a Kickstarter?

thedevil 11y ago

And here's an idea to explain the mismatch. Not sure if it's right, but it might explain why the numbers make no sense: newspaper -> hacker news, google news: GDP drops, but life is better. stereo + CDs -> mp3 player: GDP drops, but life is better GPS -> Google maps, GDP drops, but life is better. snail mail -> gmail, text, GDP drops, but life is better.

superuser2 11y ago
>newspaper -> hacker news, google news Um, what? Google News doesn't do reporting, it aggregates newspaper content. If the traditional media outlets die, there will be no content left for Google News to aggregate. Unless you are referring the part of the newspaper industry which actually puts ink on dead trees, which is pretty small compared to the newsrooms. People write posts that go on HN to promote themselves and their business interests. Nothing wrong with a little of that, but it isn't a substitute for journalism.
- undersuit 11y ago
  Newspapers aggregate news as well. The point is you buy the newspaper for all or most of the content or you visit Google News or Hacker News. They are portals. >it isn't a substitute for journalism. No true journalist would ever impinge their profession by writing for such trash as a blog.
  - deleted 11y ago
    [deleted]
  - superuser2 11y ago
    I am using "newspaper" in the sense of "organization which pays reporters and editors to produce a textual representation of the news of the day." So perhaps this is semantics. But Google News does not do that. Google News is sort of similar to the business unit of a newspaper which takes finished copy in digital form from the newsroom and actually delivers dead trees to people's doors. Of course the internet should (and will) kill that entirely. Journalism is a professional craft. Writing about current events for free because you are passionate about some issue, or for a salary because your benefactor has a vested interest in some issue, etc. is not journalism. Your income has to flow from the fact that people want the news, and you/your bosses/your editors have to be properly incentivized to actually report the news.

jonathankoren 11y ago

> So Pandora, Facebook, Hacker News, YouTube, Google, Wikipedia, gmail, google maps, Reddit... all of these together are worth less than $50/month? Would any of you give up all the free parts of the internet for $50/month? With the exception of Wikipedia, and Hacker News -- which is more of loss leader for Y Combinator -- all of the services you listed are run by for profit companies. Clearly they're making more than $50 month.

thedevil 11y ago
Google and Facebook have combined annual revenue around 80B, or around $20/month/person in the US. And the $50 was rounding up. We're still underestimating value. Dramatically.

dcre 11y ago

We are, of course, paying for those services, just indirectly. We buy from the companies that advertise with them. The 1% of GDP ($106 billion) in the study refers only to the chunk of the value that we are not paying for in this way. You are confused because you are considering both numbers together.

thedevil 11y ago
I'm not confused, I was just disregarding advertising in my comment because I assumed it only captured a tiny portion of the value. According to my first Google result, total US internet ad spending was about $60B last year (~$15/month), so my assumption was pretty reasonable. The $106B is closer to $30 than $50 (I rounded up). So the combined ad spending and the 106B estimate together is about $50 per month per person. It's actually more complicated than that - companies like Comcast also capture a (disproportionate) share of the value created. But even when you add it all together, it's still a big underestimate of the value created.

williamcotton 11y ago

What you're talking about is called consumer surplus, and it's the same argument that Marc Andreessen has been making. Rents are a real issue with real consequences. It doesn't matter how much cheaper your phone, or your heroin, or your cigarettes cost unless they make your life more productive. You gotta be able to pay rent. If you buy a table saw and a tool belt and learn how to use them, you can make money, and then you can pay rent. If your table saw gets cheaper, you get to benefit from that consumer surplus. If your heroin or cigarettes get cheaper, you get no benefits from that consumer surplus, unless you want to argue that the temporary highs from drug use lead to long term productivity. A cheaper TV does not make you more productive. What we can actually see in these studies is that cheaper phones and more time spent on Facebook do not make people more productive. Sitting around watching cheaper and cheaper videos on your cell phone is about as productive as nodding off on heroin. --- In some circumstances, policymakers might choose to disregard consumer surplus because they do not respect the preferences that drive buyer behavior. For example, drug addicts are willing to pay a high price for heroin. Yet we would not say that addicts get a large benefit from being able to buy heroin at a low price (even though addicts might say they do). From the standpoint of society, willingness to pay in this instance is not a good measure of the buyer's benefit, and consumer surplus is not a good measure of economic well-being, because addicts are not looking after their own best interests. - Principles of Economics, N. Gregory Mankiw, p. 140 --- The numbers don't make any sense to you because you're not thinking like an economist. The reason why we care about actual trade value and money changing hands is because that's what economics is all about. It's about real people paying real rents and real people buying real food. You can't pay rent in Facebook "likes".