As the George Mason University economist Tyler Cowen wrote in his 2011 e-book, The Great Stagnation, the Internet is a wonder when it comes to generating ''cheap fun.'' But because ''so many of its products are free,'' and because so much of a typical Web company's work is ''performed more or less automatically by the software and the servers,'' the online world is rather less impressive when it comes to generating job growth.
It's telling, in this regard, that the companies most often cited as digital-era successes, Apple and Amazon, both have business models that are firmly rooted in the production and delivery of nonvirtual goods. Apple's core competency is building better and more beautiful appliances; Amazon's is delivering everything from appliances to DVDs to diapers more swiftly and cheaply to your door.
By contrast, the more purely digital a company's product, the fewer jobs it tends to create and the fewer dollars it can earn per user -- a reality that journalists have become all too familiar with these last 10 years, and that Facebook's investors collided with last week. There are exceptions to this rule, but not all that many: even pornography, long one of the Internet's biggest moneymakers, has become steadily less profitable as amateur sites and videos have proliferated and the ''professionals'' have lost their monopoly on smut.
The German philosopher Josef Pieper wrote a book in 1952 entitled Leisure: The Basis of Culture. Pieper would no doubt be underwhelmed by the kind of culture that flourishes online, but leisure is clearly the basis of the Internet. From the lowbrow to the highbrow, LOLcats to Wikipedia, vast amounts of Internet content are created by people with no expectation of remuneration. The ''new economy,'' in this sense, isn't always even a commercial economy at all. Instead, as Slate's Matthew Yglesias has suggested, it's a kind of hobbyist's paradise, one that's subsidized by surpluses from the old economy it was supposed to gradually replace.
You can read the whole thing here.
Yglesias has a good illustration concurring with Douthat's piece:
To the best of my knowledge, nobody's ever gotten rich by inventing a card game. And even though casinos do make money hosting poker tournaments and there are such things as professional bridge players, quantitatively speaking those are marginal activities and the vast majority of games are friendly or low-stakes pursuits undertaken with no expectation of meaningful financial reward.