Michael Goldhaber on 10 Oct 2000 03:53:03 -0000 |
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[Nettime-bold] Re: <nettime> What ever happened to the New Economy? |
Geert, your point is well taken, but the question remains whether the "new economy" that might emerge with the internet is really the dot-com economy, as pundits who think in what are basically old-economy terms would have it, or whether it is an economy that works on new principles entirely. If the latter, the possible Internet recession, while likely to be painful for many, may offer space for the truly new economy to grow even faster. Now that the net is in place, a serious old-new-economy downturn could lead to much greater use of the net for non financial transactions, sharing, and other, not necessarily good, but certainly different things. If so, the predominant features of this new economy may come into clearer sight soon. The question is whether it will be the so-called gift economy, which sounds very egalitarian, or what I have been terming the attention economy, which includes a kind of basic inequality between stars and fans, or perhaps something else. (I haven't seen Mandel's book, nor a digest of it, but was already ruminating as follows when I heard of it) While it is always difficult to make accurate economic predictions of any kind, there are some obvious reasons to think that we may be nearing a sharp slowdown in the old economy. Perhaps the following points are not too gnomic to make sense. (Disclaimer: like most other people, I would be hurt financially if these predictions are correct.) 1) The old-new economy is propelled by US growth, which in urn is in large measure the result of so-called "virtuous " circle, in which rises in stock prices induce business growth which then induces more spending and thus more growth. Much of this spending is categorized as business expenses, but also as more of the public anticipates owning or actually own stocks, there has been a rise in discretional spending. as the stockmarket rises, money also flows from other economies to the US, adding to apparent US purchasing power. But the percentage of the world who can invest much of anything in US stocks still has some limit. Once it is reached, growth must slow down or even reverse, a reverse that then can be accentuated by the withdrawal of money form the markets, perhaps partly to pay off debts incurred for previous purchases. as this happens, discretionary spending could begin a sharp decline. After all, there is little made in the US that anyone actually needs. ( Though the perception of what is needed might of course differ.) 2) Much of US economic strength has in my opinion resulted form the great strength of US pop culture in infusing the world. But old-new-economy corporations have tried to capture that creativity as revenue streams, subjecting it to the vacuity of marketing and focus groups, and basically what sells, thus strangling the golden goose. American culture is thus becoming less and less worth paying attention to, except on the fringes. 3) As recent college graduates, engineers, tech types and MBAs have joined the new dot-com gold rush, other industries necessarily get the "failures" and on the whole they will be poorly served by them. Thus older industries, already challenged in terms of products and services partly supplied by the new ones are further challenged by a lack , not so much of competence as confidence. 4) Someone on nettime( sorry for forgetting who) last week mentioned Kondratieff long waves, certainly a semi-mystical concept in themselves. If such long waves occur, the question is why. In my book "Reinventing Technology", 1986, I argued that could be a consequence of an older technological 'paradigm" of economic life coexisting for a while with a newer one, until the new one is sufficiently built up to replace the old completely. Then, jobs and fortunes connected with the old paradigm dry up, and there is a downturn. Whether the 70's was such a time (as was argued last week) is debatable. In any event, now or soon might be. 5) Ever higher productivity, if real, eventually leads to saturation, no matter how eager consumers are. You can't at all rationally spend your time consuming ever more, and as a small fraction of the world has the obligation to do exactly that to sustain the boom, a bust must come. Suppose a bust does come, and that, for the reasons mentioned above, it is severe. Keynesian policies which partially ended the last Depression are pretty much abandoned. even if they could be relearned, the essential trick for ending depressions has to be putting effort into making something basically not in competition with private enterprise. War and preparation for war was ideal from that respect, if no other. The destruction wrought by actual war also led to the necessity for rebuilding what would have sufficed nicely otherwise. But current war-making capacities would destroy the human race if used full out. Additional capacities beyond what now exist seem hard to justify. So what kind of Keynesian spending would work? Even art competes with the entertainment industry, if only for attention. If all this is so, and if something else doesn't save the day for capitalism, a new economic system based on different premises has to emerge, if the future be other than lasting despair. Or maybe the long boom will still just perc along, happy all the time. Cheers, Michael Michael H. Goldhaber mgoldh@well.com http://www.well.com/user/mgoldh/ My E-Letter: to subscribe send blank message to Goldhaber-subscribe@listbot.com _______________________________________________ Nettime-bold mailing list Nettime-bold@nettime.org http://www.nettime.org/cgi-bin/mailman/listinfo/nettime-bold