"The New Economy"

"The New New Economy: More Startups, Fewer Giants, Infinite Opportunity," is the title of the 22 May article in Wired. It's the latest re-visit of socio-economic theory based on "the new paradigm." In other words, "Gee whiz, it's a new world and we told you so first." A bit like "The End of History."

You can read the article faster and easier than I can summarize it, so let's move on to analysis. Frankly, it reminds me of many prior attempts at insight that failed even the simplest reality tests. They usually had more in common with wishful thinking than insight. A few from my own experience:

In about 1964, I had a college professor who was, more than likely, a closet socialist. He was a scientist, but not involved with computers, so I was a little surprised to hear him say that computers would be the salvation of Communism. Computers would make it possible to effectively manage state-controlled enterprises. In other words, the obvious failures of Communism would be overcome by electronic brute force. I didn't argue the point, or even comment, as I recall. It said more about the man than the idea.

About 1989, I was a consultant to a company in Europe that was in the data business. They collected it and sold it. For a fee, they would also analyze it. Their problem was that their half-million-dollar computer was no longer big enough or fast enough to handle the volumes involved. Their computer guru had recommended that these new gadgets called personal computers were so cheap that the problem could be solved using several dozen PCs instead of stepping up to a million-dollar mainframe. Management was skeptical and I basically agreed with management; it was too early to make that leap.

These two examples, and the Wired article, have a lot in common. Brilliant insight is a long way from analytical proof. And time has an amazing way of defeating even the most exhaustive analyses.

Which is not to say that there will not be More Startups, Fewer, or at least Different Giants, and Infinite Opportunity. But that's the way it has always been in our society.