This morning’s Observer column.

WE ARE all slaves of some defunct economist, said Keynes, who until the recent disturbances in the banking system was widely regarded as defunct himself. But it wasn't just bankers and politicians who denied their indebtedness to ancient economic principles. Newspaper and print publishers generally also ignored the axiom that, in a competitive market, prices tend to converge on the marginal cost – the cost of producing one more unit of the good(s) in question.

The internet provides a pretty good approximation of such a market…