Comments on: Long after the New Economy

By: Crooked Timber » » Digital Phoenix

Crooked Timber » » Digital Phoenix — Tue, 23 Aug 2005 14:22:16 +0000

[...] Bruce Abramson’s’ Digital Phoenix is a smart read – it combines an excellent overview of the recent developments of the digital economy, with some important insights into how it works. The writing style is pacey, the stories (the Microsoft-Netscape battles, the MP3 wars, the birth of open source) are well told, and the quite substantial intellectual content is delivered in a user-friendly format. It’s the best non-technical account I’ve read of how network economies do and do not work in the information age. I’ll be assigning it to my students – as far as I can see, it’s the best and most complete account available. This said, there are two problems. First is its slightly breathy enconium to the new economy. All we need to do, says Abramson, is to renew our faith in the “corporate innovators and entrepreneurs who make growth possible,” and we can achieve the original promise of the information technology revolution. It isn’t that simple; the New Economy was never everything it was cracked up to be, and the future, insofar as we can discern it, seems likely to be considerably weirder than Abramson gives it credit for being. Second is the concluding section which feels a bit tacked on, jumping into an argument over the fight for control of the information economy between terror movements and authoritarian governments on the one hand, and democratic liberals on the other. It reads like the conclusions of a very different book, and a substantially inferior one. [...]

By: Petr

Petr — Wed, 13 Oct 2004 18:58:57 +0000

Alan Green span made the pronouncement of “irrational exuberance” with regards to the dotcom mania and Shiller co-opted it.

By: Petr

Petr — Wed, 13 Oct 2004 18:56:27 +0000

Alan Green span made the pronouncement of “irrational exuberance” with regards to the dotcom mania and Shiller co-opted it.

By: jet

jet — Tue, 12 Oct 2004 20:54:01 +0000

I’ll certainly concede the point as it isn’t that substantial to your argument, but I do think there are significant counter-arguements including cost and accessability.

By: John Quiggin

John Quiggin — Sat, 09 Oct 2004 09:01:10 +0000

I agree that horse and buggy to motor car is a qualitative transformation in all sorts of ways. Now looking at financial markets, there’s clearly a qualitative transformation with the telegraph. Someone in London can decide to sell all their US stocks, or vice versa, and the order will be executed within minutes. This happened, pretty much, in various late c19 panics. With the Internet, the time might be reduced from minutes to seconds (though I imagine the need to check for errors puts a lower bound on things) and the complexity of the transaction can be greatly increased, but that doesn’t seem to me to be a qualitative transformation.

By: jet

jet — Sat, 09 Oct 2004 04:57:54 +0000

John, let me be more clear. This “Theorists of the new economy often treat this as a qualitative rather than a quantitative transformation” is what caused me pause when reading your argument. This seems like a fairly vague statement, but could certainly be applied to horse and buggies vs. automobiles. Yet would anyone think to argue that automobiles were merely a quantitative improvement over horse and buggies? Oh, and let me apologize for my flippant language earlier. I need to remind myself that while posting on sites that tend to differ from my views I need to remember that most people will not assume my benign intentions and might take affront. Given the way you write, I’m guessing you are from academia, a place not known for inserting jokes into their critiques.

By: John Quiggin

John Quiggin — Sat, 09 Oct 2004 03:06:30 +0000

jet, what part of “instantaneous” don’t you understand?

By: jet

jet — Fri, 08 Oct 2004 15:11:20 +0000

Holy crap, did someone just compare the 1866 trans-atlantic cable to the internet and say that instataneous communication between markets has existed for that long? And then did everyone else accept that at face value? My prescription for crazy pills has ran out, can someone share theirs?

By: Kevin Carson

Kevin Carson — Fri, 08 Oct 2004 02:23:58 +0000

Caveat: Since I haven’t yet read the book, this comment is in response to Henwood as he is portrayed in your review. Despite his facile dismissal of the antiglobalists, the only question is NOT what kind of globalization. The question is how much globalization. Given the fact that current levels of international trade reflect massive subsidies to the export of capital and to long-distance distribution costs, it makes sense to assume that eliminating such subsidies would result in a much more decentralized economy of smaller-scale production for local markets. After all, when you subsidize something, you get more of it. When the government externalizes the inefficiency costs of global corporations on the public, the TNCs have an artificial competitive advantage against more efficient local firms. It’s easy to talk about increased “productivity” when you use the state to shift the cost side of your ledger to someone else.

By: Cranky Observer

Cranky Observer — Thu, 07 Oct 2004 22:44:33 +0000

> There’s already evidence that > Australian workers are finding ways > to reverse the increase in work > intensity that took place in the > 1990s. In white collar jobs those “ways” are known as the Internet and blogs! Cranky

By: John Quiggin

John Quiggin — Thu, 07 Oct 2004 22:17:24 +0000

dan, I've written quite a bit on intensification of work in the context of the Australian productivity 'miracle', for example here and here An important point is that the productivity gains from Walmart-style speedup are (i) bounded (ii) hard to sustain There's already evidence that Australian workers are finding ways to reverse the increase in work intensity that took place in the 1990s. I'd be interested in working on a paper on telecommunications vs deregulation as sources of expansion in global capital flows. My view is that the big expansion in short-term flows owes a fair bit to telecoms, but that expansion in long-term flows is due to deregulation. But I don't have a good idea how to test this.

By: Giles

Giles — Thu, 07 Oct 2004 20:38:02 +0000

“a decline in the importance of capital markets will create room for a wider range of political choices than those admitted by the theorists of globalization” I’m not sure that capital markets alone restrict political developments – the old chestnut of the late 19th century I think debunks that idea in that it was an era of larger capital flows and I think (possibly) greater political diversity. The power of Globalization always derived from its historical invetiablity thesis – countries that ignored its rhetoric (provided over the internet?) were free to do with their capital markets what they will – as Malaysia proved. But the converse is just as untrue, and probably more dangerous, that the end of globalization means countires can forget capital markets. Capital flows are mainly determined by real factors – principally in the late 20th century demographic factors. Ignoring these factors is not likely to be optimal. On a separate note, perhaps the current fad on “outsourcing” is a reaction to the death of globalization – it seems to me an attempt (by principally American pundits) to justify capturing the “super normal gains of Globalization in the 1990’s. So maybe debuning globalization debunks the need for control over outsourcing?

By: Dan Hardie

Dan Hardie — Thu, 07 Oct 2004 19:21:57 +0000

An economy in which innovation is, to a significant extent, a by-product of activities associated with the creation of social capital will have very different properties from those traditionally considered by economists.’ Question: how much of the productivity gains in the US over the last 10 years can be (roughly) attributed to net-style ‘social capital-driven’ innovation, and how much can roughly be attributed to what might call ‘Walmart-style’ innovation? By Walmart style, I mean de-unionising workers, employing lots of women, keeping skill levels low and hence hourly wages and things like health benefits down. There has certainly been a lot of this happening, and the thrust of modern Republicanism is to make more of it happen. (See, eg, George Will’s op-ed in today’s WaPo, with its prediction that Bush, if elected, will crack down big time on the remaining pockets of unionised US labour.) If ‘Walmart-style’ productivity growth turns out to be as important as, or more important than, ‘social-capital driven’ innovation, then the economy and society of the coming decades will look rather different from Henwood’s prediction. Again, this might make a good basis for a paper, if one only had the time. And John, I will try to read the book, but…

By: Dan Hardie

Dan Hardie — Thu, 07 Oct 2004 19:03:12 +0000

slolernr- the Transatlantic cable was first laid in August 1858, but ceased to work after three weeks. The American Civil War delayed any further progress, and the cable was only relaid successfully in 1866. See this article: http://www.history-magazine.com/cable.html With regard to John’s point (or John’s summary of Doug Henwood’s point) that ‘The resurgence of global capital flows owes more to the deregulation of the 1970s than to technological change.’, it’s interesting to note that the article I’ve cited above notes that ‘it was not until the 1960s that the first communication satellites offered a serious alternative to the cable’. If one hasn’t been written already, there’s probably a good economic history paper to be based around assessing the relative impacts of deregulation and satcoms on global capital flows. Anyone up for co-authoring one?

By: slolernr

slolernr — Thu, 07 Oct 2004 15:02:02 +0000

Wasn’t the transatlantic cable 1858?