What parallels can be drawn between contemporary transformations in the Internet and the corporate reconstruction of capitalism (to use Martin Sklar’s phrase) in the past?
Says Xavier Rizos
The internet took off there nearly 20 years ago with the wide dissemination of Netscape, the first web browser. Among the founding myths of this new economy was the belief that it would do away with intermediaries placing buyers and sellers face to face. Far from disappearing, new overpowerful intermediaries have actually emerged…far from having materialised the ideal of a pure market allowing perfect competition – as its pioneers believed – the internet has instead given birth to a juxtaposition of giant monopolies in separate market segments, which are often not in competition or only indirectly.. If the digital world tolerates so little of the competition, it is because of a specific law of its own: the network effect. The value of a good or service increases with the number of its users, even at the expense of short-term profitability: the product is adopted by a critical mass of users, allowing a company to acquire a dominant position on a given market. This delivers a “winner takes all” outcome Continue reading