Facebook Fails The Capitalism 101 Test

Filed by: The Author of tIoGT

Facebook sure is a great site. And at the price users pay, there can be no denying that it certainly represents great value for money. Given the enormous number of applications it now has relative to the ways we interact with those around us, it really is difficult to believe that it still doesn’t cost a penny to use.

But should it be free of charge? Normally, a party would be rewarded or compensated for supplying a service or product for which there is demand? That’s capitalism 101 isn’t it?

I was thinking about this the other day whilst browsing some of the pages set up to ensure Facebook remains free. Some of the pages had grand titles like “Keep Facebook Free!!” and “Ill leave Facebook If I Have to Pay!!” etc. etc. Curiously, most of the posters there seemed to be under the assumption they had an inalienable right to use the service, or most curiously of all, that Facebook belongs to everyone….

Given the enormous enjoyment and convenience so many people derive from using Facebook, I cant help but be very skeptical that any fair minded person would or indeed should refuse to pay a small annual membership fee of say perhaps $1-2, or even $5.

Obviously this also applies to sites like Wikipedia, Twitter, Flika, online newspapers, and of course even the Blogger template I am using to reach you right now.

Despite their unquestionable quality and utility though, sites such as these all share a common Achilles Heel largely preventing any significant monetization. The are but the finest proponents in a glut of supply by parties with a capability of supplying a comparable product. That’s also capitalism 101.

Basically, more supply than demand = lower price. Very low in fact.

I suppose there’s no point in worrying about all this too much though. Supply and demand will go on fluctuating and the market will sort it all out eventually. Like Mrs. Thatcher said, You cant buck the market.

In the mean time, please enjoy some more Facebook screenshots that I lifted off of another great free site.

They are completely free. But I would charge you if I could.