Noah Smith, Columnist

The Internet's Hidden Wealth

The Web's value may elude traditional measures.

June 10, 2015 at 12:00 PM UTC

Noah Smith is a former Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.

Unseen riches.
Source: SEYLLOU/AFP/Getty Images

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The question of whether economic growth is stagnating probably hinges on the answer to another question: How much hidden value is being created by the Internet.

The stagnationists, most prominently Robert Gordon of Northwestern University, claim to have the numbers on their side. People spend a relatively small fraction of their income on online services. Most of what we consume online is free. Facebook is free. Bloomberg View is free. If these goods are so valuable, why aren’t people being charged for them (or for the Internet access that lets you use them, which is typically a tiny share of one’s income)?