Poking Holes in the Hype Surrounding the Digital Technology Revolution
Krugman Column Questions the Idea that the Digital Age has Helped the Economy
Having written at length – and maybe ad nauseam – about the digital zealots’ overhyped prophecies for the news business, I was heartened to see this battle joined on a broader field by none other than Nobel Prize-winning economist and New York Times columnist Paul Krugman.
In a column headlined “The Big Meh,” Krugman questions the hyperbolic claims of the digital acolytes not as they relate to journalism, but to the economy as a whole.
In short order, Krugman pokes holes in the notion that the age of digital technology has dramatically rejuvenated the country’s bottom line.
True, the PC/Internet/digital revolution has produced its share of Silicon Valley billionaires and millionaires, and plenty of gee-whiz gadgets. But Krugman says it hasn’t resulted in the kind of broad-based economic stimulus that leads to robust hiring by corporations or fatter paychecks for middle-class workers.
Krugman writes that “the whole digital era, spanning more than four decades, is looking like a disappointment. New technologies have yielded great headlines, but modest economic results.”
Krugman admits he doesn’t know why this is the case, but adds: “What I’m pretty sure about, however, is that we ought to scale back the hype.”
Hype, indeed. It’s what we in the news business have been hearing for at least a decade from the digital media nerds who told the us that online news should be free, that newspapers should immediately abandon print, and that digital advertising would make up for the loss of revenue from printed display ads.
Well, we saw how that worked out. After years of giving away their content online, newspapers finally realized what a mistake that was and began erecting paywalls. And while a few papers here and there have cut the frequency of their print product, the vast majority still run their presses day in, day out.
Why? Because the digital advertising that the pundits thought would be the pot of gold at the end of the proverbial rainbow has turned out to be a mirage. And by now, everyone in the news business knows that publishers are trading analog dollars for digital dimes and mobile pennies.
In other words, digital advertising just doesn’t pay, at least not enough to singlehandedly support news outlets of any size.
I don’t have my head in the sand. I understand that these are tough times for newspapers. How many of them will still be around in a decade, much less two, is anyone’s guess.
But imagine where we’d be now if newspaper publishers across the country had listened to the digital zealots. What if they had shut down their printing presses years ago and tried to survive on online advertising alone? How many of those publications do you think would still be around?
Or look at what happened when publishers did listen to the digital pundits and gave away their online content. The result was an unmitigated disaster. Only now, through the use of paywalls, are publications starting to reap some much-needed revenue from their websites.
And yet the digital zealots persist. Even now, they scold both professional and college newspapers for not shelving their print product. Even now, they still believe that digital technology alone will somehow save the news business. Even now, they still believe their own hype.
But Krugman, who knows not just economics but something about history as well, has heard it all before. He notes that in the 1930s, there was a similar wave of overheated utopianism from pundits praising the technological advances of that era. Then, as now, new technology alone wasn’t enough to usher in sustained prosperity.
As Krugman puts it, “Writing and talking breathlessly about how technology changes everything might seem harmless, but, in practice, it acts as a distraction from more mundane issues — and an excuse for handling those issues badly.”