My Favourite Economist on the micro-economics of the miracle of the internet

In physics, we’re used to the idea that at different scales and at different stages of some process, very different things happen. We inhabit Newton’s world of medium-sized things and speeds – planets, trees, footballs and travel at walking, driving or flying speed – even space station speed. When things get very big or fast – intergalactic or close to the speed of light – very strange things happen that defy our own intuitions. And inside atoms when things get even weirder. Likewise during a ‘phase transition’ of some matter from one phase to another – from solid to liquid for instance – strange and counterintuitive things happen.

Something  similar has happened on the internet where transactions costs have fallen to near zero. And strange and fascinating things are happening. Anyway, I’ve been mulling over this for a while now, and verily, along comes this compelling OECD study of the internet. So I’ve written it up in this week’s column in the Age and SMH.

From: ClubTroppo, Nov 2012