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“While brick-and-mortar retailers employ 47 people for every $10 million in sales, Amazon employs only 14 people for the same revenue,” says Keen. The few jobs Amazon does create are low-wage, non-union warehouse spots, and even those are being replaced by robots.
Look at newspapers. Even the best are barely hanging on. Their online versions with paywalls don’t save them. Too much free content to compete against. Between 2003-2013 in the US, weekday newspaper circulation dropped by 47% and jobs for full-time journalists fell by 31%.
Keen, who kicked around the Valley for a few years, had an earnest music startup in the late 90s called AudioCafe which he abandoned when Napster came along. Not surprisingly, he has lots to say about the internet’s negative impact on the music scene. Piracy, of course, is the internet’s second name, but even nominally legit streamed music services funnel a mere pittance back to their musicians. In the late 90s, world-wide revenue from music CDs, records, and tapes was $38 billion. Today that figure has tumbled to just over $16 billion. Between 2002-2012, the number of professional musicians and songwriters in the US dropped by almost half.
Keen’s thesis boils down to a critique of the prevailing internet paradigm: Silicon Valley by and large pursues a Googlenomics-type strategy of giving away its product for free and relying on ad sales for revenue. Leaving aside the free searches, Google offers the world free maps, streetviews, translations, email, dictionaries, website analytics, and I don’t know what else. Free flu trends, for example. And all of that is merely in aid of its real mission: advertizing to the eyeballs. Google (2014 revenue $66 billion) is the mightiest ad firm in history.
A world for free was a big ideal in San Francisco, a little before my time, when a lot of people were on acid. In practice, Keen argues, free is a disaster: the internet is “a gift economy” that is about to destroy the livelihoods of a large segment of the population, not just retailers and journalists and cultural workers.
Now, I’m as brainwashed as the next guy so I’ve absorbed the line that capitalism’s famous process of “creative destruction” results in new and better jobs replacing the dumb old jobs. On the other hand, I’m as apprehensive as the next guy too. Even if in the West there have always been new jobs generated since the Industrial Revolution, there is no logical necessity for that pattern to persist in the wake of the Digital Revolution. It is conceivable that there will simply be no more jobs for humans, except there will be jobs for tekkies for a while. Sometimes I think despair is already setting in on us. That’s why a lot of people have lost interest in the future, because it looks bad.
To give us a good fright about the Digital Revolution, Keen takes us to Rochester, NY, where Eastman Kodak, legendary maker of cameras and film, used to employ 145,000 workers. But the confluence of digital photography, smartphones and internet photo-sharing meant that nobody needed Kodak anymore. The firm declared bankruptcy in 2013. “The Instagram moment has replaced the Kodak moment,” says Keen. Rochester has become “a landscape of boarded-up stores and homeless people wheeling their earthly possessions in rusty shopping carts along empty streets.”