How the Web destroyed our economy

Crappy job postings: Ernest Shackleton's ad solicited some 5,000 responses anyway

You’re going to think I’m nuts. But I’m growing convinced: The Web has trashed the American economy.

Back in the ’20s, mass production transformed the way we made and bought things. Henry Ford and his magnate brethren learned how to make vast quantities of consumer items quickly, and to sell those consumer items, they had to advertise to the masses. A symbiotic relationship was born and, in tandem, production and advertising became the twin cylinders of our economic engine. By the 1950s, our consumer society reached its apogee. Today, the capitalist formula is so perfect that many Americans would rather live deep in debt than within their means. Gotta have the latest stuff, or at least die pretending you do!

And then the Web came in. Online shopping mushroomed and today, it’s taking over. Last Cyber Monday, online shopping hit a new high of $1 billion in sales on single day. While we were busy chattering about what a novelty digital commerce was, it was sticking daggers in Mom and Pop’s backs.

Observers like to claim that newspapers and magazines are dying because Web journalism and social media are making them irrelevant. But I think they’re wrong about the true nature of what’s happening. They’re distracted by the shiny new baubles of Twitter and Facebook, and mistaking demolition for revolution.

Yes, the Web has impacted print media. Of course it has. But I think it’s because the Web eliminated advertising as a crucial medium. Why would a wicket manufacturer want to spend tens of thousands for display advertising when it could spend nearly nothing and simply appear at the top of the heap in a Google search? The great ad man, once an archetype of American business, is now something of a hobbyist. Advertising positions are skewing more toward marketing ones in which companies learn not how to master the art of the ad, but how to manipulate free social media gossip to work in their favor.

The end result: Far less money is now changing hands in everyday commerce.

Without advertising, one of the legs has been kicked out from under our economic dinner table.  Without advertising, too, millions of Americans will suffer from lost work: journalists, writers, actors, producers. Without big-ticket advertising, the few surviving media outlets that remain must hack budgets so far to the bone that previously professional positions will be filled by people getting bony wages. More businesses expect to be able to do things for free, and that includes staffing.

cart keyboard button online shopping

All the advertising a business needs these days

If you think that’s a scary prophesy, I hate to tell you it’s already true: An editor of one of the nation’s biggest travel magazines got up in front of the Society of American Travel writers conference last spring and said he’s getting away with paying writers 50¢ a word when a few years ago they got $2 a word. They’re lucky. One of the biggest “news” sites in the world doesn’t pay most of its contributors a cent. In a masterstroke of mining low self-esteem for profit, it tells writers that their payment is the opportunity to see their name on their website for free. All this is now reality because advertising is becoming a memory.

About six months ago, a friend of mine, who has worked in TV, newspapers, and in digital media, said something ominous to me: “I think the dirty little secret of Internet journalism is that no one really knows how to make money from it.”

Six months later, she was laid off by the troubled media corporation that employed her to save it. She was replaced by a kid right out of school whose chief skill is the mastery of SEO. In a downshift analogous to American commerce as a whole, another high-level position became a cottage-industry job, and standards descended with it.

First we were hit by outsourcing. Now we’re being slammed by downsourcing.

Even when I go to brick-and-mortar stores, I find the retail clerks have capitulated to the Web. So often these days, when I look for something that’s not in stock, I’m answered with a passive shrug. “You can find it online,” they tell me, absolving themselves of making a sale despite the fact I have cash in hand.

I would like to know if anyone has ever done a study to see how much money American businesses lose each year because customers refuse to return home, order the item online, pay the shipping, and wait.

The reason no one knows how to make much money off Internet journalism so far is that there are few advertising dollars behind it. Readers and businesses alike are finally used to getting everything for free. In a world where consumers can find what they’re looking for without outside assistance, they’re just not as necessary as they used to be.

Half the engine of our economy was removed even as we’re rocketing down the highway at 95 miles per hour.

It’s mad, man.

One Response to “How the Web destroyed our economy”

  1. Shannon

    I think I am following you on twitter, I have followed so many travel writers, etc.

    I have heard from businesses that used to use the internet for advertising before evberybody started wanting everything for free only to hear from them again and hear that they can no longer get effective sales from typical advertising we’re used to and now need “marketing” (SEO).

    Advertising & print media isn’t the only thing causing the web to ruin the economy either. I can remember when mail order catalogs were still fairly prominent although I never used any of them really because it made more sense to buy locally or not too far from home because the prices were either just as good or better but now with web presence and online ordering who has to buy from the locals?

    I wanted to buy a converter for my RV and all the local shops wanted $300-$350 for a similar one that I ordered for $148 plus shipping. Shoot, I’d be happy if my local shop would have ordered it and charged me $250 but when I have to consider $350 vs $148 even with the express shipping I needed it still came far cheaper I think the locals need to stop outpricing themselves against the internet markets I don’t wholeheartedly agree that the web is doing all the killing.