I agree with Becker that the Internet has been on the whole a valuable innovation. It is a less costly form of communication than either telephone or mail, and (a related point) a better substitute for personal communication than either telephone or mail; it economizes on time by reducing the transportation involved in meetings. I commute to work less frequently nowadays because I can work efficiently at home; and academics in different universities or even different countries can collaborate in writing books and articles at far lower cost than if they had to rely on the older modes of interaction. The Internet also, as Becker emphasizes, reduces the cost of access to information (though not always accurate information); it thus reduces information costs as well as communication costs.
As with most new technologies, however, there are downsides as well as upsides. The effect on substitute services as such should not be cause for concern except to the producers, for substitution effects are the inevitable consequence of innovation. The hotel and travel industries are hurt if business travel falls because of the substitution of online for in-person conferencing, though the hurt is offset to the extent that by lowering the costs of communication the Internet increases the amount of business activity and the geographical scope of firms.
But other harms caused by the Internet warrant social concern. The Internet lowers the cost of communication and there are bad as well as good communications: bad in the sense that they promote activities that reduce overall welfare. Examples are the use of the Internet by terrorists, by advocates of hate crimes, by purveyors of child pornography, by plagiarists, by defrauders, by violators of copyright law, and by identity thieves. The increase in these pathologies as a result of the Internet is a social cost and may be considerable. The contribution that the Internet has made to the recruitment and coordination of terrorists has created a considerable threat to our national security.
Of course, it is possible to monitor Internet communications, and our security and law enforcement agencies do that. But the volume is overwhelming; coded communications provide a challenge to monitors; and privacy advocates insist on limitations on monitoring.
The Internet is also highly vulnerable to penetration and disruption by enemies of the
The negative impact of the Internet on the newspaper industry is a possible source of concern. Newspapers are a bundled product: the publisher provides a large variety of news, opinion, and advertising in an effort to obtain a large enough readership to offset the heavy fixed costs of producing information. The Internet enables unbundling at low cost, which makes it difficult to cover those heavy fixed costs. As classified advertising migrates from newspapers to inexpensive Internet services, for example, the revenues of such advertisng no longer support costly newspaper newsrooms. But the effect on the extent to which the public is well informed may be offset by the rise of the blogs, which provide immense quantities of information and opinion on public issues at zero cost (other than time cost) to readers. At the same time, however, because the blogs are an unfiltered medium they are also a source of a great deal of misinformation. Yet Wikipedia illustrates how prompt correction, which the Internet also facilitates, can reduce inaccuracies in online dissemination of information.
The time costs imposed by the Internet are a source of some concern. People receive a great many more communications, because of their lower cost, in the form of email than they did in letters and phone calls, because email is cheaper. This can be a burden, and it is only partially offset by the “junk mail” filter programs that email services provide. The sender of a communication will usually not consider the cost to the recipient. Information overload can be a real cost.
Finally, we have become aware recently than the use of the Internet by drivers is a significant source of automobile accidents.
The net effect of the Internet on social welfare has probably been positive, but it is difficult to say how great it has been. Communication and information flows were rapid before the Internet, and the effect of increased rapidity on economic output and personal satisfaction may not be great when the full costs of the Internet are taken into account.