The "Old Economy" versus the "New Economy"

There are well-known labels for the various cultural ages of humanity: pre-stone age; early stone age (used stones as they were found); late stone age (worked the stones into having good cutting edges, etc.); the bronz age; the iron age; the steel age; the age of space exploration; and many others depending on what was being or shall be catalogued. One IBM official looked at it from his perspective: first came the age before language; then language was invented; and then the computer (the age of computational amplification). He suggested that the next great leap would be one of "ethical amplification" - a program we can only name as it is beyond our current grasp though it will probably encompass such attributes as religion, justice, environmentalism and politics.

In the past 10 years we have been experiencing the dawn of the age of information technology. Just as with the dawn of the automobile age, or with environmental awareness, there were many who scoffed that it was only a short-lived passing fling of human invention. The maturation of each age eventually sees the scoffers muffled. The new perspective of culture did not pass away as they thought, at worst it became the foundation upon which further ages were constructed. We still use sharpened sticks as garden stakes, or clothesline supports. We still use stones for many purposes - either as is, or reshaped, or even synthetic as in concrete. Bronze still is useful, as is iron and steel. But all those have become, step by step, parts of the "Old Economy" - a venerated, and necessary part of our overall continuing economy. Alas, those who walk backwards through time seeing only where they have been, cannot easily see the entrance to a new age. To some Australopithicine, grunts and shouts were quite good enough to get by, and they laughed at those who suddenly invented new sounds that conveyed love and wonder. An awful lot of time, they said, was wasted talking such non-sense and it didn't bring home the "bacon." The price to earnings ratio was astronomical! What was worse was that the product - a bunch of words - was just so much etherial atmospheric vibration.

In the late 1960's an age of sorts bloomed on Earth Day - environmental awareness. It was new type of ethical structure that our "civilization" seemed to need. It imposed many painful things upon the people of the previous age, and they groaned and complained a great deal. But it was not a flash in the pan; it is very much a growing part of our civilization now, and must be more so in the future. See the Tragedy on the Commons. New ways of doing activities and new ways of handling things are being done today in order to preserve our environment "for ourselves and our posterity." (Yes, the Preamble to the U.S. Constitution IS a part of the Constitution - it IS the Constitution, so ruled the U.S. Supreme Court. All the rest are for the implementation of the Spirit ideas laid down in that short Preamble. Paraphrasing: "We, the People, make this Constitution to ensure that these several fundamental ideas are supported.")

Starting in the mid-1990's a new age of information technology has been born, and it is threatening to many in the previous, or "old" economy. Imagine that you are the previously powerful CEO of "Big Steel" or "Big Motors." You have spent your life making a fortune in this expanding world economy. And suddenly a bunch of college dropouts making "software" become the invitees to the White House. "Software"? Hardware is the real thing! you say. When you see your stockholders in droves selling your stock to buy the stock of these new upstarts. Well, that forces the price of your stock and all your options and your own personal fortune to drop and drop and drop. That hurts! "Hey, look, Congressman, this is Big Steel calling. We need some laws curtailing this new fangled thing they call the new economy. How can we control pricing if the stocks are traded on the internet? Congressman, you've got to do something and FAST!"

If only those old economy people could look back a few years when GM and Ford were selling their first stock certificates so that they could build their first factories. What were their P/E's then? High price to NO earnings! The advent of any new economy must - according to the universal laws of the universe - see an input of resources and energy BEFORE useful product can be gotten. P/E must be astronomical in the beginning! But what really gets these old timers is that most of the expected product is an etherial bunch of electrons or photons either stored on hard-drives or coursing their ways through wires or optical fibers. Have these old-timers forgetten that knowledge (or information) is power?! Welcome to the wave of the future!

One final comment that will have a world wide effect in very short order. The English language will rapidly become the main language of the world. Currently oil is priced in U.S. Dollars; currently all international airline pilots are to communicate in English. Remember that King James I/VI of England and Scotland caused the Bible to be written beautifully in English, and shortly before that Shakespeare sought to add beauty to that little known language. That beauty suddenly saw an explosion in the number of speakers of English. Our international travel by affluent Americans and Canadians - and our soldiers in World War 2 - saw the next huge leap in English speakers. And now there is the internet! It has no boundaries unless the plug is pulled by certain governments. And, thanks to some of those super-wealthy college dropouts, they are giving computers away to the remote places in the world. Soon they will be English readers, and next year, maybe, English speakers and oral transmissions become more common as "broadband" and visuals come "on-line."

This IS a new age! Get used to it NYSE and DJIA! Already you are in survival talks to get gobbled up by the NASDAQ!

I want to go to the TOP OF PAGE or ESCAPE! or go back to "Go for the Bananas!"