I tend to disagree. I don’t disagree that the above is correct in basis, or that things went south, because obviously they did — But there is a “New Economy” — the people running things just got a lot of its underpinnings wrong, in thinking that they did not have to pay attention to ANY of the old rules, when many still applied.

We are well along in the process of shifting from an Industrial Economy to an IP/Services Economy — all real substantial new value is going to be derived, in one form or another, not from making widgets but from improving and expanding on IP and/or Services. The number of men required to make all the widgets humans need is going to decline from wherever it is now to a much smaller per capita number just as the number of people required to grow this nation’s food has dropped precipitously in the last 100+ years. This will great a fair amount of economic dislocation as people who used to make widgets now find jobs providing services or making IP. One might even argue that a large part of the cause of the boom and collapse of the 20s and 30s was the shift from an Agrarian economy to an Industrial one, as workers shifted from farm labor to manufacturing.

This economy is going to be as different from its predecessor at least as much as an Industrial Economy (based on goods and factories, central organizing precept being the Corporation) differed from its predecessor, the Agrarian economy (based on food and land, central organizing precept being the Feudal Enclave).

I’d even argue that the difference between an IP/Services economy is going to be extremely different from its predecessor economies, for the simple reason that digital property, an important component of the IP/S economy is radically different from so-called “real” property, to the extent of representing a phase change in the notion of property. Clearly, they are related, much like water and ice — but their behaviors in response to things are radically different. This will necessitate a qualitative change in the way we deal with property and distribution thereof in return for labor output.

Hence the notion of a “new economy”. People could sense that things were different, they just weren’t sure HOW. After the boom, of course, everyone has gone to the other ridiculous extreme of thinking there is no difference at all. The truth lies, as it so often does, between the two extremes. Some of the old rules apply. Some don’t. Some will need to be applied in new ways and new configurations.

The New Economy of the 90s wasn’t wrong. It was just a First Draft.