A market dies when customers can no longer justify paying for the items produced by that industry. And customers are smart. They prioritize, they compare prices, they find substitutes. (Note that I have prioritized, and decided to use the free stock photo for this post instead of paying $19. Thanks Shutterstock!) They are not irrational creatures who decide to “stick it” to these industries. These industries are not one hand-out away from greener pastures in which everyone wakes up and decides to pay for that service again.
But death is not such a bad thing. You don’t see economists today saying “Boy, if it weren’t for the textile industry going bust, our unemployment would be at 5%.”
Instead, the death of every industry frees up labor and capital for new and greater industries. It may not be a law, but it certainly is a dominant trend that at the point an industry dies it is no longer efficient, and when its labor and capital is put to other uses, those uses are usually towards more efficient, growing industries. The death of the U.S. manufacturing industry giving rise to the more efficient, profitable service industry, for example.
Although it is antithetical to our current “maintain jobs at all costs” philosophy, I would argue that one of the most noble purposes in business is to seek to destroy industries. I would love to see destroyed (from their current form) print media, real estate broker services, higher education, the mail, oil & gas, cable television, and everything else I come in contact to that isn’t perfect. (I’ll keep the industry of Google-ing, I can think of no more perfect service.)