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The Internet, the Market, and Communication: Don't Ignore the Shoe While Admiring the Shine
By Dwight R. Lee
Introduction
The Internet is clearly a marvelous technological advance. It is establishing an interactive network through which hundreds of millions of people from all over the globe can exchange information almost instantly, creating the potential for what is widely seen as a revolutionary improvement in global communication and cooperation. Many believe that the Internet is changing the economy in fundamental ways, creating a new economy and rendering obsolete many rules that applied to the old economy. For example, Kevin Kelly, the executive editor of Wired Magazine, titled his recent book New Rules for the New Economy, in which he states, "The new economy is about communication, deep and wide. All the transformations suggested in this book stem from the fundamental way we are revolutionizing communications" (Kelly 1998: 4).
The importance of the Internet notwithstanding, there is an element of hype in the claims that it is creating a new economy based on information and communication. Long before the Internet we were benefiting from a truly amazing network of global communication and information, one based on the rules of private property, voluntary exchange, and market prices that are the foundation of the old freemarket economy. There is a lot of talk recently about moving into an "information economy." In fact, market economies have always been information economies. One of the most important contributions of the Internet is improving the information flow through the existing network of free and open markets, but those information flows have always been the source of the amazing success of market economies through the ages. Much of the current hype about the Internet is the equivalent of admiring the shine while ignoring the shoe.
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