The internet has crowned the consumer king. Unrestricted by time or space, the wily shopper can search globally for goods and services, thereby eroding the pricing power of producers. The result? A brave new world of low inflation and unlimited consumer choice. Or so the techno-prophets would it.
The reality may be somewhat different. For while the internet is undoubtedly exerting downward pressure on prices in the short term, it may ultimately stunt consumer choice and confer immense monopoly power on a handful of global corporations.
In other words, far from being a liberating force for consumers, it may become a tool of economic oppression.
The case for the internet being the consumer's friend has been persuasively put by DeAnne Julius, who sits on the Bank of England's monetary policy committee.
She says that, not only does it allow shoppers to compare the prices of standard goods and services online and bypass the middleman to buy them directly or use that information to extract extra discounts from the local supplier, it has enormous potential to increase the efficiency with which capital and labour are combined in production.
"For many products ICT (information and communications technology) has reduced design times, increased quality control and shrunk the need for precautionary stocks in the production chain," she says.
"Improved information flows enable firms to respond more efficiently to shifts in consumer preferences, and to customise their products and services to their needs. The speed and low cost of information transfer has led to greater outsourcing by producers to the cheapest global supplier, spurring and speeding the globalisation process."
The upshot of all this is a dramatic shift in market power from sellers of goods and services to their customers.
With the hi-tech American economy growing rapidly without - so far - creating strong inflationary pressures, there is certainly plenty of evidence to support Ms Julius' thesis about the positive impact of new technology.
The UK economy is not immune to these influences. Why else would Ford, which once told its customers they could have any colour Model T they wanted as long as it was black, now be grovelling to them by offering to refund the difference if competitive pressures force it to reduce the prices of its new V-registration cars?
However, it may be that consumer power is no more than a passing phase and that producers will eventually regain the upper hand.
In a new research paper, City economist Peter Warburton, of Robert Fleming & Co, argues that in a truly global market place, swarming with products and services, the only ones that will survive will be those which stand out among crowd.
Producers have always known the value of branding, but in the wired world of the 21st century it will become even more important.
Hence the vast expenditure on electronic advertising. "The logic behind the promotion of power brands is that of universal recognition," says Mr Warburton. "If there is only room for a tiny number of global brands, then the race to establish them is one of strategic importance. The potential rewards are so vast to justify colossal advertising expenditure for the brief interval during which the pecking order is decided."
Amid all the turmoil which will accompany the introduction of e-commerce, the likelihood is that many old businesses will be replaced by dynamic new ones.
But once the dust settles the businesses that triumph could be in a powerful position to reassert themselves against the consumer, who may well face higher prices and less choice.
Mr Warburton says that corporations such as Unilever are anticipating these developments. He points out that in September the company announced a strategic cull of its 1,600 brands in order to concentrate on 400 power brands.
Mr Warburton says: "The shortening of the list of brands is a profoundly important development. Whenever a new means of product or service delivery is developed (eg telephone banking and telephone car insurance), the pioneers of the new medium target the most attractive segments of the consumer market and screen out the bad risk and low margin segments.
"A successful online retailer will concentrate on the product lines that are most popular. It has no incentive to offer 40 choices of marmalade."
Surveys suggest the traditional high street had a good Christmas, with sales volumes the strongest for years. But retailers were not able to take advantage of strong demand by widening profit margins.
This shows that consumers remain in the ascendant, but the question is for how long. Unless they refuse to give in to the likely attempts to nudge retail margins upwards once the initial phase of the e-revolution is over, the new economy could end up looking like the old one, with producers dictating the rules of the game.
