new economy

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pages: 306 words: 78,893

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"Robert Solow", accounting loophole / creative accounting, affirmative action, Asian financial crisis, barriers to entry, borderless world, Branko Milanovic, Bretton Woods, business cycle, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, ending welfare as we know it, feminist movement, full employment, gender pay gap, George Gilder, glass ceiling, Gordon Gekko, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, liquidationism / Banker’s doctrine / the Treasury view, manufacturing employment, means of production, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, structural adjustment programs, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, women in the workforce, working poor, zero-sum game

."^^ The poverty rate among such workers is admittedly low—only around 3%—but these are the best-positioned workers in the labor force, and the poverty line is a pretty undemanding benchmark. As the report's subtide said, "America's Full-Time Working Poor Reap Limited Gains in the New Economy." Inclusion of "the New Economy" isn't just PR spin; as the report points out, "an increase in the relative share of low-skill employment is one characteristic of this 'New Economy...,'" though "low-pay" is more relevant to the analysis than "low-skill."That's not what most New Economy rhetoric emphasized, of course, but the bubble's sales force never deployed much of rigorous evidence. Apologists were quick to point out that the Conference Board's report didn't include the beneficial effects of the Earned Income Tax Credit (EITC), which has boosted the incomes of the working poor dramatically: in 1998, almost 20 miUion returns claimed the EITC, and $32 billion was paid to those who filed them (Herman 2000).That works out to an average of $1,600 per return, which is a lot better than nothing, but which amounts to just $4.38 a day.

As Jack Kemp once said in a very different context, if you're going to go for it, you should really go for it. Notes 1 Novelty 1. Though it's sobering to learn that, according to a Scudder Kemper Investments poll, over 80% of Americans have neither heard nor read of a New Economy (reported in Business 2.0, September 12,2000, p. 36). 2. For a classic statement, see Wired's "Encyclopedia of the New Economy" at <hotwired.lycos.com/special/ene/>. There's also former Wired editor Kevin Kelly's "New Rules of the New Economy," <www.wired.coni/5.09/networkeconomy/>, as well as his exuberant but thinly argued expansion of that article into a book. New Rules for the New Economy (Kelly 1999). Kelly—now deposed as editor of Wired, a magazine long past its prime—combines born-again Christianity, Social Darwinism, and classic American huck-sterish optimism into a single package. 3.

Baffler editor Tom Frank (personal communication) says that the earUest claim he could find for the existence of a "new economy" was a 1988 speech by Ronald Reagan at Moscow State University. In it, Reagan said: In the new economy, human invention increasingly makes physical resources obsolete. We're breaking through the material conditions of existence to a world where man creates his own destiny. Even as we explore the most advanced reaches of science, we're returning to the age-old wisdom of our culture, a wisdom contained in the book of Genesis in the Bible: In Novelty the beginning was the spirit, and it was from this spirit that the material abundance of creation issued forth. Reagan's invocation of scripture isn't standard in the New^ Economy literature, but there's no small amount of mysticism and true-beheverhood in the doctrine.


pages: 353 words: 355

The Long Boom: A Vision for the Coming Age of Prosperity by Peter Schwartz, Peter Leyden, Joel Hyatt

American ideology, Asian financial crisis, Berlin Wall, centre right, computer age, crony capitalism, cross-subsidies, Deng Xiaoping, Dissolution of the Soviet Union, European colonialism, Fall of the Berlin Wall, financial innovation, hydrogen economy, industrial cluster, informal economy, intangible asset, Just-in-time delivery, knowledge economy, knowledge worker, life extension, market bubble, mass immigration, megacity, Mikhail Gorbachev, Nelson Mandela, new economy, oil shock, open borders, Productivity paradox, QR code, Ronald Reagan, shareholder value, Silicon Valley, Steve Jobs, the scientific method, upwardly mobile, Washington Consensus, Y2K

However, by the late 1990s, although businesses had invested an estimated $4 trillion in information technologies, the standard government productivity measurements showed only a slight rise, and that had come only since about 1996. Critics of the New Economy charge that these networked computers are not all that productive—and they point to the government statistics. But New Economy advocates, like us, say the computers are highly productive and are getting more so as we figure out the best ways to work with them. The problem lies in the government measurements, which are rooted in old ways of counting the number of widgets—tangible things—coming off the assembly line, rather than the intangible products of the New Economy, like software and financial packages. On the one hand, we're waiting for new methods to be devised to properly measure productivity in an information economy.

Expand the network. It's in everyone's interest to do so. The logic of networks does not apply just to technological networks. The New Economy is not called a networked economy just because it is based on networked computer technologies. Networks have become the central metaphor of how we organize work— whether it's through technology or face-to-face. Networking is the key economic activity that we engage in, whether glad-handing at conferences, schmoozing at the office, working the phones, or sending e-mail. But even in this broader economic context, the new rules of network logic apply: Expand the network. And how do we expand the network of the New Economy? Through education. With a new economy driven by knowledge workers in an era called the Information Age, education has never been more important. You might say we've always expanded economic opportunity through education.

They will see the forty-year period from 1980 to 2020 as encompassing a critical shift from an Industrial Age economy to an Information Age economy, or a Knowledge Economy, or what we simply call the New Economy. Those people in 2050 will also see the world in a tense transition right around the turn of the century, just as the twentieth century rolled over into the twenty-first. They'll understand this millennial anxiety as more than just a reaction to the collapse of the economies of Asia and other developing regions. They'll see the turmoil as a struggle of the world trying to go global by taking those new technologies, taking the redesigned New Economy that had been seen most clearly in prototype in the United States, and trying to expand it to the world at large. They'll see the larger story as the attempt to create a truly global economy that for the first time in history integrated every region of the world, almost every single country, into one highly interconnected economic unit.


pages: 843 words: 223,858

The Rise of the Network Society by Manuel Castells

"Robert Solow", Apple II, Asian financial crisis, barriers to entry, Big bang: deregulation of the City of London, Bob Noyce, borderless world, British Empire, business cycle, capital controls, complexity theory, computer age, computerized trading, creative destruction, Credit Default Swap, declining real wages, deindustrialization, delayed gratification, dematerialisation, deskilling, disintermediation, double helix, Douglas Engelbart, Douglas Engelbart, edge city, experimental subject, financial deregulation, financial independence, floating exchange rates, future of work, global village, Gunnar Myrdal, Hacker Ethic, hiring and firing, Howard Rheingold, illegal immigration, income inequality, Induced demand, industrial robot, informal economy, information retrieval, intermodal, invention of the steam engine, invention of the telephone, inventory management, James Watt: steam engine, job automation, job-hopping, John Markoff, knowledge economy, knowledge worker, labor-force participation, laissez-faire capitalism, Leonard Kleinrock, longitudinal study, low skilled workers, manufacturing employment, Marc Andreessen, Marshall McLuhan, means of production, megacity, Menlo Park, moral panic, new economy, New Urbanism, offshore financial centre, oil shock, open economy, packet switching, Pearl River Delta, peer-to-peer, planetary scale, popular capitalism, popular electronics, post-industrial society, postindustrial economy, prediction markets, Productivity paradox, profit maximization, purchasing power parity, RAND corporation, Robert Gordon, Robert Metcalfe, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, social software, South China Sea, South of Market, San Francisco, special economic zone, spinning jenny, statistical model, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, the medium is the message, the new new thing, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, total factor productivity, trade liberalization, transaction costs, urban renewal, urban sprawl, zero-sum game

Thus, while the whirlwind of factors entering in the valuation process are ultimately expressed in financial value (always uncertain), throughout the process of reaching this critical judgment, managers and workers (that is, people) end up producing and consuming our material world – including the images that shape it and make it. The new economy brings information technology and the technology of information together in the creation of value out of our belief in the value we create. There is an additional, essential component of the new economy: networking. The organizational transformation of the economy, as well as of society at large, are, as in past periods of historical transition, a necessary condition for institutional restructuring and technological innovation to usher in a new world. I will examine this matter in some detail in the next chapter. But before undertaking a new stage of our analytical trip, I will recast the argument presented in this chapter. In sum, what is the new economy? The new economy is certainly, for the time being, a capitalist economy.

As the twenty-first century progresses, the biology revolution is likely to join the information technology industry in creating new business, in stimulating productivity (particularly in health care and in agriculture), and in revolutionizing labor, adding to the virtuous circle of innovation and value generation in the new economy. Under conditions of high productivity, technological innovation, networking, and globalization, the new economy seems to be able to induce a sustained period of high economic growth, low inflation, and low unemployment in those economies able to fully transform themselves into this new mode of development. However, the new economy is not without flaws nor without dangers. On the one hand, its expansion is highly uneven, throughout the planet, and within countries, as argued above in this chapter, and as it will be documented in this book (volume I, chapter 4; volume III, chapter 2). The new economy affects everywhere and everybody but is inclusive and exclusionary at the same time, the boundaries of inclusion varying for every society, depending on institutions, politics, and policies.

Thus, within the value system of productivism/consumerism, there is no individual alternative for countries, firms, or people. Barring a catastrophic meltdown of the financial market, or opting out by people following completely different values, the process of globalization is set, and it accelerates over time. Once the global economy has been constituted, it is a fundamental feature of the new economy. The New Economy The new economy emerged in a given time, the 1990s, a given space, the United States, and around/from specific industries, mainly information technology and finance, with biotechnology looming on the horizon.118 It was in the late 1990s that the seeds of the information technology revolution, planted in the 1970s, seemed to come to fruition in a wave of new processes and new products, spurring productivity growth and stimulating economic competition.


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From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism by Fred Turner

1960s counterculture, A Declaration of the Independence of Cyberspace, Apple's 1984 Super Bowl advert, back-to-the-land, bioinformatics, Buckminster Fuller, business cycle, Claude Shannon: information theory, complexity theory, computer age, conceptual framework, Danny Hillis, dematerialisation, distributed generation, Douglas Engelbart, Douglas Engelbart, Dynabook, Electric Kool-Aid Acid Test, From Mathematics to the Technologies of Life and Death, future of work, game design, George Gilder, global village, Golden Gate Park, Hacker Ethic, Haight Ashbury, hive mind, Howard Rheingold, informal economy, invisible hand, Jaron Lanier, John Markoff, John von Neumann, Kevin Kelly, knowledge economy, knowledge worker, market bubble, Marshall McLuhan, mass immigration, means of production, Menlo Park, Mitch Kapor, Mother of all demos, new economy, Norbert Wiener, peer-to-peer, post-industrial society, postindustrial economy, Productivity paradox, QWERTY keyboard, Ralph Waldo Emerson, RAND corporation, Richard Stallman, Robert Shiller, Robert Shiller, Ronald Reagan, Shoshana Zuboff, Silicon Valley, Silicon Valley ideology, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, technoutopianism, Ted Nelson, Telecommunications Act of 1996, The Hackers Conference, theory of mind, urban renewal, Vannevar Bush, Whole Earth Catalog, Whole Earth Review, Yom Kippur War

By the mid-1990s, the technocentric, networked social worlds of the Global Business Network and Out of Control had become widely looked-to examples of the flexibility and individual satisfaction promised by the New Economy. They would soon become emblems of the social possibilities of the Internet and the World Wide Web as well. As they did, they helped shape popular understandings of the New Economy in terms set not only by the New Communalist dream of social transformation, but also by the New Communalist practice of social segregation. Back to the Future at MIT By 1985, despite his founding interest in the WELL, Stewart Brand had begun to get restless. He had edited CoEvolution Quarterly for a decade; the Whole Earth Software Catalog was failing rapidly. “By the time I’d done a half a dozen versions of the book, ending with a Whole Earth Software Catalog in Networking the New Economy [ 177 ] 1985,” Brand later explained, “I had no idea whatever about futures and was operating strictly on reflex.”2 Since Kevin Kelly had taken over the editorship of the Whole Earth Review, and since the WELL seemed to be selfsustaining, Brand felt ready to leave Sausalito for a while.

T h e S h i ft i n g P o l i t i c s o f t h e C o m p u t at i o n a l M e t a p h o r [ 15 ] For Kevin Kelly, executive editor of Wired, this new way of living and the ways in which digital technologies served and modeled it marked a revolutionary transformation in human understanding. In one of the most widely read business manuals of the 1990s, New Rules for the New Economy, Kelly explained that “the principles governing the world of the soft—the world of intangibles, of media, of software, and of services—will soon command the world of the hard—the world of reality, of atoms, of objects, of steel and oil, and the hard work done by the sweat of brows.” The savvy worker would have to become a networker. “Those who obey the logic of the net, and who understand that we are entering into a realm with new rules,” he intoned, “will have a keen advantage in the new economy.”9 Along with this understanding of work, he argued, a singular, almost mystical understanding of the power of information and information systems had begun to arise: “the computational metaphor.”

For this community, the frontier of cyberspace, and especially the village of the WELL, would have to be home. CHAPTER 6 Networking the New Economy In the late 1980s and the early 1990s, the same economic and technological forces that had long shaped work lives in Silicon Valley swept across much of the industrialized world. Networked forms of production, contract employment, global outsourcing, and deregulated marketplaces all became common features of everyday economic life. So did the nearly universal use of computers and computer networks in business and, increasingly, in the home. Together, these developments suggested to many at the time, and particularly to politicians and pundits on the right, that a “new economy” had appeared, one in which digital technologies and networked forms of economic organization combined to liberate the individual entrepreneur.


pages: 598 words: 172,137

Who Stole the American Dream? by Hedrick Smith

Affordable Care Act / Obamacare, Airbus A320, airline deregulation, anti-communist, asset allocation, banking crisis, Bonfire of the Vanities, British Empire, business cycle, business process, clean water, cloud computing, collateralized debt obligation, collective bargaining, commoditize, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, David Brooks, Deng Xiaoping, desegregation, Double Irish / Dutch Sandwich, family office, full employment, global supply chain, Gordon Gekko, guest worker program, hiring and firing, housing crisis, Howard Zinn, income inequality, index fund, industrial cluster, informal economy, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kitchen Debate, knowledge economy, knowledge worker, laissez-faire capitalism, late fees, Long Term Capital Management, low cost airline, low cost carrier, manufacturing employment, market fundamentalism, Maui Hawaii, mega-rich, MITM: man-in-the-middle, mortgage debt, negative equity, new economy, Occupy movement, Own Your Own Home, Paul Samuelson, Peter Thiel, Plutonomy: Buying Luxury, Explaining Global Imbalances, Ponzi scheme, Powell Memorandum, Ralph Nader, RAND corporation, Renaissance Technologies, reshoring, rising living standards, Robert Bork, Robert Shiller, Robert Shiller, rolodex, Ronald Reagan, shareholder value, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Steve Jobs, The Chicago School, The Spirit Level, too big to fail, transaction costs, transcontinental railway, union organizing, Unsafe at Any Speed, Vanguard fund, We are the 99%, women in the workforce, working poor, Y2K

The financial cleavage created by wedge economics has provoked popular discontent. Today, two-thirds of Americans—far more than just a couple of years earlier—say they see “strong” conflicts between rich and poor, and they see economics as more divisive than race, age, or ethnic grouping. “The Virtuous Circle” of the 1950s–1970s vs. the New Economy of the 1980s–2000s The New Economy is not smart. It hurts our capacity to grow, as we have seen from America’s painfully slow recovery from the financial collapse of 2008. The job losses and stagnant pay of the New Economy have broken what economists call “the virtuous circle of growth”—long the engine of America’s economic growth and middle-class prosperity. In the heyday of the middle class, for thirty years after World War II, America’s great companies paid high wages and good benefits. Tens of millions of families had steady income, and they spent it, generating high consumer demand.

America Chose a Different Fork America chose a different path, driven by the pro-business power shift in politics and a new corporate mind-set, both of which lie at the root of the economic rift in America today. The New Economy laissez-faire philosophy of the past three decades promised that deregulation, lower taxes, and free trade would lift all boats. It argued that sharply reduced taxes for the rich would generate the capital for America’s economic growth. Its disciples asserted that the free market would spread the wealth. But that is not what has happened. The middle class was left behind—the 150 million people whose family incomes range from nearly $30,000 to $100,000 a year—as well as 90 million more low-income Americans living in poverty or just above. Even the 60 million upper-middle-class Americans and the nation’s wealthiest 5 percent have been falling steadily further behind America’s financial elite, the super-rich 1 percent. The New Economy mind-set marked a sharp break with the corporate philosophy of the postwar era.

CONTENTS Cover Title Page Copyright Epigraph PROLOGUE: THE CHALLENGE FROM WITHIN PART 1: POWER SHIFT CHAPTER 1. THE BUSINESS REBELLION: THE POWER SHIFT THAT CHANGED AMERICAN HISTORY CHAPTER 2. THE PIVOTAL CONGRESS: JIMMY CARTER AND 1977–78 DEMOCRATS CHAPTER 3. MIDDLE-CLASS POWER: HOW CITIZEN ACTION WORKED BEFORE THE POWER SHIFT CHAPTER 4. MIDDLE-CLASS PROSPERITY: HOW “THE VIRTUOUS CIRCLE” WORKED BEFORE THE NEW ECONOMY PART 2: DISMANTLING THE DREAM CHAPTER 5. THE NEW ECONOMY OF THE 1990S: THE WEDGE ECONOMICS THAT SPLIT AMERICA CHAPTER 6. THE STOLEN DREAM: FROM MIDDLE-CLASS TO THE NEW POOR CHAPTER 7. THE GREAT BURDEN SHIFT: FUNDING YOUR OWN SAFETY NET; CRIPPLED BY DEBT CHAPTER 8. THE WEALTH GAP: THE ECONOMICS “OF THE 1%, BY THE 1%, FOR THE 1%” PART 3: UNEQUAL DEMOCRACY CHAPTER 9. THE NEW 2000S POWER GAME: WHY CONGRESS OFTEN IGNORES PUBLIC OPINION CHAPTER 10.


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The New Ruthless Economy: Work & Power in the Digital Age by Simon Head

Asian financial crisis, business cycle, business process, call centre, conceptual framework, deskilling, Erik Brynjolfsson, Ford paid five dollars a day, Frederick Winslow Taylor, informal economy, information retrieval, medical malpractice, new economy, Panopticon Jeremy Bentham, shareholder value, Shoshana Zuboff, Silicon Valley, single-payer health, supply-chain management, telemarketer, Thomas Davenport, Toyota Production System, union organizing

xiii xiv PREFACE The economy's strong performance from 1995 onward pushed aside such doubts about the "new economy." But the exuberance of the late 1990s faded away during 2001 and 2002. By mid-2001 a collapse of business investment, led by the information technology industries, was already dragging the economy downward. The terrorist attacks of September 11,2001, further weakened the economy, pushing it toward recession in the third quarter of the year. Enron's multiple scandals and the ensuing corporate crime wave then brought to light some of the more insidious aspects of contemporary capitalism. A rapacious corporate leadership was able to accumulate great power and then use that power ruthlessly on its own behalf, and at the expense of its own employees and shareholders. There is now therefore a need to pose some neglected questions about the "new economy." It is not simply that issues which seemed important five or six years ago are now making a comeback.

In New York City: Roger Alcaly, Nelson Aldrich, Dee Aldrich, Steven Aronson, Elizabeth Baker, Annabel Bartlett, Helen Bodian, Bill Bradley, Ernestine Bradley, Susanna Duncan, Ed Epstein, Frances Fitzgerald, Andrea Gabor, Edward Garmey, Joann Haimson, Alexandra Howard, Philip Howard, Bokara Legendre, Valerie Lucznikowska, Sidney Morgenbesser, Constancia Romilly, Richard Sennett, Sigrun Svavardsdottir, and Lou Uchitelle. Simon Head New Tork City April 2003 I A NEW ECONOMY? A T THE TURK OF THE MILLENNIUM, the U.S. economy was widely celebrated as a "new economy," one sustained by strong investment and low inflation, by steady growth throughout virtually the entire previous decade, by the monetary fine-tuning of the Federal Reserve, and by the renewed global supremacy of U.S. technology. Investment in new information technologies was the great driving force of the expansion. Between 1994 and 2000, investment by business in computers, allowing for deflation, increased sixfold and at an annual average rate of 43 percent, a growth of investment unmatched in U.S. peacetime history.

But it was from the industry's trade journals, notably "Casket and Sunnyside," that she came across the singular mix of piety, manipulation, and greed that characterized the industry's in-house dialogue. These two kinds of evidence—the evidence of the trade literature and the evidence of one's own eyes—run strongly counter to one of the most common claims made on behalf of the new economy, that the II 12 THE NEW RUTHLESS ECONOMY "old economy" businesses that make use of IT are coming more and more to resemble the new economy businesses that create and supply that technology, so that the skill, proficiency, and flexibility of the Silicon Valley workforce is showing up all over the economy and at all levels of skill. In 1989 the MIT Commission on Industrial Productivity wrote of "new patterns of workplace organization" in U.S. manufacturing that required the "creation of a highly skilled workforce" and that was incompatible with "the ways of thinking and operating that grew out of the mass production model."20 In 1995 Louis Csoka, then research director for human resources/organizational effectiveness at the Conference Board, a leading corporate lobbyist, described how throughout the economy employees are "working in concert with others, [forming] work groups that become high performing teams through teambuilding, teamwork and interdependence."21 In 1999 human resource experts surveyed by economists Timothy Bresnahan, Erik Brynjolfsson, and Lorin Hitt also claimed that "IT use is complementary to a new workplace organization that includes broader job responsibilities for front line workers, decentralized decision making, and more self-managing teams."22 In 2000 economist Paul David of Stanford, now professor of economics at Oxford, wrote of the "process of transition to a new information-intensive techno-economic regime" with "new kinds of workforce skills" and "new organizational forms" that would "accomplish the abandonment or extensive transformation . . . of the technological regime identified with Fordism."23 Neither the plant and office-level evidence, nor the evidence of the trade literature, supports this vision of a newly skilled workforce empowered by information technology going about its business within autonomous, self-directed teams.


Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages by Carlota Pérez

agricultural Revolution, Big bang: deregulation of the City of London, Bob Noyce, Bretton Woods, business cycle, capital controls, commoditize, Corn Laws, creative destruction, David Ricardo: comparative advantage, deindustrialization, distributed generation, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, Hyman Minsky, informal economy, joint-stock company, Joseph Schumpeter, knowledge economy, late capitalism, market fundamentalism, new economy, nuclear winter, offshore financial centre, post-industrial society, profit motive, railway mania, Robert Shiller, Robert Shiller, Sand Hill Road, Silicon Valley, Simon Kuznets, South Sea Bubble, Thomas Kuhn: the structure of scientific revolutions, Thorstein Veblen, trade route, tulip mania, Upton Sinclair, Washington Consensus

New industries have grown, a new infrastructure is in place; new millionaires have appeared; the new way of doing things with the new technologies has become ‘common sense’. One crucial thing is still missing: a systematic articulation of the new regulatory framework and of the appropriate institutions, capable of steering and facilitating the functioning of the new economy in a socially and economically sustainable manner. Each time around, what can be considered a ‘new economy’ takes root where the old economy had been faltering. But it is all achieved in a violent, wasteful and painful manner. The new wealth that accumulates at one end is often more than counterbalanced by the poverty that spreads at the other end. This is in fact the period when capitalism shows its ugliest and most callous face. It is the time depicted by Charles Dickens and Upton Sinclair, by Friedrich Engels and Thorstein Veblen; the time when the rich get richer with arrogance and the poor get poorer through no fault of their own; when part of the population celebrates prosperity and the other portion (generally much larger) experiences The Turbulent Ending of the Twentieth Century 5 outright deterioration and decline.

This means that a painful and difficult process of learning and adaptation must take place, involving creative destruction across all spheres. It also explains why the fruits of that new growth potential cannot be fully reaped in the The Propagation of Paradigms: Times of Installation, Times of Deployment 43 first decades, when the accommodation and mutual shaping of society and the new economy occur, pushed by the profit motive in spite of institutional inertia and human resistance. Hence, increasing polarization and decoupling both inside the economy and between the new economy and the old social framework characterize the initial diffusion of a technological revolution. So, the installation period is one of tense coexistence of two paradigms, one declining and the other occupying more and more space on the ground, in the market and in the minds of people. These diverging processes are bound to shake, challenge and change the institutional environment.

This intense concentration of capital, local and international, furthering the infrastructure of the new economy can be seen as another of the dynamic roles played by financial capital in furthering technological advance. It is unwittingly an effective way to attract enough funds to make the significant investment necessary to install the basic infrastructure and put it in operation. It is wasteful and likely to overshoot; it can be painful for many, but it does the job of creating the fundamental externalities and facilitating intense social learning for the full unfolding of the revolution later on. 157. Nussbaum (2001) p. 35. 158. Hoover Report (1929) p. xii. The Report appeared a couple of months before the October collapse hailing this particular phenomenon as a feature of the dynamic new economy. 159. Kindleberger (1984) p. 60. 108 F. Technological Revolutions and Financial Capital Mergers and the Creation of Oligopolies Whether a single-purpose mania develops or not, other types of problem are likely to follow from excess investment flowing into the core industries.


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The Purpose Economy: How Your Desire for Impact, Personal Growth and Community Is Changing the World by Aaron Hurst

Airbnb, Atul Gawande, barriers to entry, big-box store, business process, call centre, carbon footprint, citizen journalism, commoditize, corporate social responsibility, crowdsourcing, disintermediation, Elon Musk, Firefox, glass ceiling, greed is good, housing crisis, informal economy, Jane Jacobs, jimmy wales, Khan Academy, Kickstarter, Lean Startup, longitudinal study, means of production, Mitch Kapor, new economy, pattern recognition, Peter Singer: altruism, Peter Thiel, QR code, Ray Oldenburg, remote working, Ronald Reagan, selection bias, sharing economy, Silicon Valley, Silicon Valley startup, Steve Jobs, TaskRabbit, Tony Hsieh, too big to fail, underbanked, women in the workforce, young professional, Zipcar

Causecast has built a platform that enables company employees to do everything from volunteering, to donations, to leading cause campaigns. Where information is the currency of the current economy, Ryan believes that “purpose is the currency of the new economy.” Ryan has successfully transitioned from a visionary in the Information Economy to one in the new economy. He sees that “capitalism, if applied creatively, holds the potential to transform the complex social, economic, and environmental challenges facing the world today.” In the next three chapters, I explore how an organization can thrive in the new economy. Chapter 9 scans key industries, how they are changing, and key opportunities to create value. The following chapter provides an overview of how the needs of employees are changing and the ways in which organizations need to adjust to address them.

In reading the summary of his dissertation, I found something surprisingly similar about what he had described and what I was witnessing both through my work at Taproot and in the economy at large. Specifically, the economy was going through another major restructuring, and that just as the Information Economy supplanted the Industrial Economy, and as the Industrial Economy supplanted the Agrarian Economy before it, a new economy had begun to emerge. Like most people, I had come to see technology as synonymous with innovation, jobs, growth, and our future. And while the Information Economy was clearly still the dominant driver of our economic engine, it had become clear to me that a new economy was emerging, one centered on the need for individuals to find purpose in their work and lives. It wasn’t a pollyannaish vision of the future, but rather a natural course in the evolution of the needs of people and the goods, services and jobs they desired. As I began to share this idea of an emerging Purpose Economy with my friends, partners, and colleagues, it resonated with much of what they had experienced and witnessed in their own work and lives.

In 50 years, would a company even resemble the typical business of today? The clues could be found in studying organizations like the Taproot Foundation and other pioneers working on the front lines of the new economy, and in trying to understand how Purpose Economy organizations like Etsy, Interface, and Airbnb differ from their predecessors of even a decade earlier. As I began to study the pioneers of the Purpose Economy, it became clear that marketing, human resources, and strategic planning were giving way to new methods of organizing and working, and that in order to thrive, organizations would need to rethink the ways they were operating in this new economy. And those are just the impacts of the Purpose Economy within organizations. We will likely also see radical changes to everything from government to parenting to health care.


pages: 289 words: 99,936

Digital Dead End: Fighting for Social Justice in the Information Age by Virginia Eubanks

affirmative action, Berlin Wall, call centre, cognitive dissonance, creative destruction, desegregation, Fall of the Berlin Wall, future of work, game design, global village, index card, informal economy, invisible hand, Kevin Kelly, knowledge economy, labor-force participation, low-wage service sector, microcredit, new economy, post-industrial society, race to the bottom, rent control, Shoshana Zuboff, Silicon Valley, South of Market, San Francisco, telemarketer, Thomas L Friedman, trickle-down economics, union organizing, urban planning, web application, white flight, women in the workforce, working poor

The attempt to fit the poor into the new economy also assumes that employment in the new economy will provide a better standard of living for workers. But available jobs in the information economy tend to increase poor and working-class women’s economic vulnerability: the jobs held by women in the YWCA community were often unsustainable, exploitative, and failed to pay a living wage. The distributive paradigm in IT policy, therefore, underestimates the ways in which the information economy heightens risk for the economy’s most vulnerable workers. High-Tech Development in an Unflat World The vulnerability of American workers, particularly those already marginalized by race, class, and gender, became increasingly clear as the global financial crisis touched more people’s lives and brought the risks of the new economy to the doorsteps of middle-class homes.

In the popular press, accounts of the information economy posit that increased instability and volatility can offer more horizontal forms of power, free workers to retool their skills and renegotiate their work arrangements, and sweep away old forms of inequity.12 The combination of new IT and leaner, neoliberal governance, optimists argue, results in rapidly increasing wealth and flatter hierarchies, although these claims have been somewhat muted in recent years.13 The most popular of these narratives, penned by business writers, futurists, and management gurus, often make it to the bestseller lists, suggesting that they tap into widely held hopes 56 Chapter 4 and beliefs about the power of IT and the new economy to dismantle outof-date institutions, decentralize power, and create broad-based equity.14 For example, Kevin Kelly, executive editor of Wired magazine, argues in his 1998 book, New Rules for the New Economy, that the network economy is based on the principles of flux. He writes, “Change, even in its shocking forms, is rapid difference. Flux, on the other hand, is more like the Hindu god Shiva, a creative force of destruction and genesis. Flux topples the incumbent and creates a platform for more innovation and birth” (10).

While the 17 percent poverty rate for white women in Troy is distressing, more troubling still is the fact that in 2006–2008, 29 percent of Black or African American women in Troy—and more than half of all Latinas—lived in poverty. Volatile continuity produces new configurations of inequality that extend and shift past legacies of oppression and discrimination. Inequities are generated or deepened even in those regions held up as models of new economy success, belying high-tech boosters’ promises of flatter hierarchies and more level playing fields. For example, in Work in the New Economy, Chris Benner’s 2002 case study of shifting labor markets in Silicon Valley, he argues that economic volatility is not primarily a leveling or flattening force; rather, flexibility has both positive and negative impacts on workers. Flexibility in Silicon Valley labor markets was a key part of the region’s economic success and led to good outcomes for some categories of workers, particularly those with educational advantages.


pages: 316 words: 87,486

Listen, Liberal: Or, What Ever Happened to the Party of the People? by Thomas Frank

Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, American ideology, barriers to entry, Berlin Wall, Bernie Sanders, blue-collar work, Burning Man, centre right, circulation of elites, Clayton Christensen, collective bargaining, Credit Default Swap, David Brooks, deindustrialization, disruptive innovation, Donald Trump, Edward Snowden, Fall of the Berlin Wall, financial innovation, Frank Gehry, full employment, George Gilder, gig economy, Gini coefficient, income inequality, Jaron Lanier, Jeff Bezos, knowledge economy, knowledge worker, Lean Startup, mandatory minimum, Marc Andreessen, Mark Zuckerberg, market bubble, mass immigration, mass incarceration, McMansion, microcredit, mobile money, moral panic, mortgage debt, Nelson Mandela, new economy, obamacare, payday loans, Peter Thiel, plutocrats, Plutocrats, Ponzi scheme, post-industrial society, postindustrial economy, pre–internet, profit maximization, profit motive, race to the bottom, Republic of Letters, Richard Florida, ride hailing / ride sharing, Ronald Reagan, sharing economy, Silicon Valley, Steve Jobs, Steven Levy, TaskRabbit, Thorstein Veblen, too big to fail, Travis Kalanick, Uber for X, union organizing, urban decay, women in the workforce, Works Progress Administration, young professional

The name Americans gave to this rising order was “the New Economy,” a regime of tech-based prosperity unfolding into the future as far as the eye could see. The phrase and the idea behind it had once been popular among conservatives—Ronald Reagan himself used it in a famous speech in 19881—but now Democrats rushed to claim it as their own. In 1999, the think tank run by the Democratic Leadership Council—the onetime champion of conservative Southern Democrats, remember—began issuing a “State New Economy Index,” ranking the states according to how dedicated they were to education, venture capital, and the retention of “managerial/professional jobs,” among other things. President Clinton himself hosted a White House Conference on the New Economy in April of 2000, claiming the marvelous new era to be the product of a balanced federal budget and the deregulatory program he had enacted during his time in office.2 The protagonists of this economic story were our familiar friends: the “learning class,” the “wired workers,” the “symbolic analysts.”

See Reagan’s 1988 speech at Moscow State University; it is reprinted, among other places, on the website of the Miller Center at the University of Virginia. The conservative author George Gilder, one of Reagan’s favorites, wrote one of the earliest and most forceful accounts of the New Economy ideology in his 1989 book Microcosm.   2. The DLC’s think tank was the Progressive Policy Institute; their 1999 report was called “The State New Economy Index.” Other installments were issued periodically throughout the decade to come. Later on, authorship of the index was taken over by the Ewing Kauffman Foundation and the Information Technology & Innovation Foundation, a Washington think tank. The coauthor of the 2007 State New Economy Index, Daniel Correa, later became President Obama’s Senior Adviser for Innovation Policy.   3. This passage can be found in Chapter 1 of Cluetrain; it is signed by Christopher Locke (the author of Gonzo Marketing) and available online at http://www.cluetrain.com/book/apocalypso.html.   4. 

The symbolic embodiment of all this innovative postindustrial economic activity was none other than Frederick Dutton’s countercultural hero, hymned now as the very embodiment of the New Economy. Youth radicalism became the language in which the winners assured us that they cared about our individuality and that all their fine new digital products were designed strictly to liberate the world. Remember? “Burn down business-as-usual,” screamed a typical management text of the year 2000 called The Cluetrain Manifesto. Set up barricades. Cripple the tanks. Topple the statues of heroes too long dead into the street.… Sound familiar? You bet it does. And the message has been the same all along, from Paris in ’68 to the Berlin Wall, from Warsaw to Tiananmen Square: Let the kids rock and roll!3 The connection between counterculture and corporate power was a typical assertion of the New Economy era, and what it implied was that rebellion was not about overturning elites, it was about encouraging business enterprise.


pages: 550 words: 124,073

Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, cleantech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, too big to fail, trade liberalization, union organizing, urban decay, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

Part of the populist reaction is a call to be included in the wealth stream of the new economy, and the key demand of reducing low-skill immigration is largely irrelevant to the knowledge economy. Other policies associated with populism—especially trade protection, state restrictions on product market competition, and serious interference with lifestyle choices—are clearly antithetical to the knowledge economy, but they are unlikely to garner sustained majorities. This is because there is a much more attractive path for the middle classes: namely, inclusion in the stream of wealth created by the new economy and associated support for policies that will produce more of the same. We count here not only those with higher education who are already benefiting from the new economy, but also aspirational voters who see their children benefiting from the expansion of higher education and new opportunities in the rising cities.

Many in the middle classes will see themselves as more closely aligned with the top because they either have good jobs and earnings, or if starting graduates they expect to move up the job ladder, or because they can still reasonably expect to see their children do well by acquiring the education needed in the new economy. We will refer to these groups as the new middle classes because they have made the leap into the new economy, at least from an intergenerational perspective. The old middle classes, by contrast, are those who have experienced stagnating wages because of skill-biased technological change, outsourcing, or import competition from the ECE countries or East Asia—the “hollowing out” of the middle—and who have low expectations that the educational system will allow their children to make the leap into the new economy. The old middle classes are stuck, and they will not simply split the difference between low and high redistribution and taxes by adopting middle positions.

This difference has been shrinking over time according to the latest adult literacy test from 2011/12 (OECD 2016), but that survey also highlights the across-the-board advances in the Nordic countries for skills that are used intensely in the new economy: what OECD calls “proficiency in problem solving in technology-rich environments.”13 The Nordic counties take four out of the six top spots on this measure (OECD 2016, figure 2.16), and we will argue in the next chapter that the broad acquisition of such skills in the new generation is an important element in limiting the spread of populist values. The high level of technology literacy is coupled in Denmark and other Scandinavian countries with high-speed internet access, itself a result of public infrastructure investments, to create a propitious environment for innovation and knowledge-intensive technology and helping to grow firms in biotech, ICT, and cleantech industries. A particularly vibrant metropolitan area for the new economy is the Øresund Region, which has a population of nearly four million (including Copenhagen and Malmö) and accounts for more than a quarter of the combined Danish and Swedish GDP (equivalent to about half of the Danish GDP).


pages: 217 words: 63,287

The Participation Revolution: How to Ride the Waves of Change in a Terrifyingly Turbulent World by Neil Gibb

Airbnb, Albert Einstein, blockchain, Buckminster Fuller, call centre, carbon footprint, Clayton Christensen, collapse of Lehman Brothers, corporate social responsibility, creative destruction, crowdsourcing, disruptive innovation, Donald Trump, gig economy, iterative process, job automation, Joseph Schumpeter, Khan Academy, Kibera, Kodak vs Instagram, Mark Zuckerberg, Menlo Park, Minecraft, Network effects, new economy, performance metric, ride hailing / ride sharing, shareholder value, side project, Silicon Valley, Silicon Valley startup, Skype, Snapchat, Steve Jobs, the scientific method, Thomas Kuhn: the structure of scientific revolutions, trade route, urban renewal

He has spent his whole career looking at how new thinking and technology can be applied to improve business and society. Today he works with companies and organisations, helping them transform to thrive in the new economy. He also works with social enterprises, start-ups and recovery communities. This book was a decade in the making, based on experience working in Europe, North America, Australia, Asia, and South America. It’s about transformation – about the emergence of a new social and economic paradigm. It is designed as a manifesto for those who are out to change the world. It provides a framework for transformation in the new economy. And for anyone who might be interested, it shows you how to be a billionaire…in three easy moves. The Participation Revolution How to ride the waves of change in a terrifyingly turbulent world Neil Gibb Published in 2018 by Eye Books 29A Barrow Street Much Wenlock Shropshire TF13 6EN www.eye-books.com ISBN: 978-1-78563-055-2 Copyright © Neil Gibb 2017 All rights reserved.

“We all know the deal. Enough places have closed. This place is ours, and we want to keep it that way.” Ben’s words shed light on what the emerging new economy is all about. Rough Trade is a beautifully compact and vivid example of how to pivot and build a successful participatory business in the rapidly emerging new economic order, particularly as it was born from an industry so heavily disrupted by digital tech. In a world where products will increasingly become commodities, where the power of the Internet and digital communications will continually flatten prices, and the monetary value of digital content will tend towards zero, a new economy is emerging that is focused on our higher human needs; our social needs, and what psychologist Abram Maslow rather mysteriously referred to as ‘self-actualisation’, but might more simply be called our ‘spiritual needs.’

But I believe we also have at our fingertips the means to create a new golden age for humanity – a world that really does work for everyone. And that is what I am interested in. The game is on. Which is why this book is really an invitation. How to use this book “We are called to be architects of the future, not its victims” R Buckminster Fuller 1. A manifesto for those who are out to change the world 2. A framework for transformation in the new economy 3. How to be a billionaire – in three easy moves Books are pretty old tech. The basic structure of the modern book goes back to the invention of bookbinding and the printing press. Back then, things were developed in a linear fashion, with a beginning, a middle, and an end. The book had to be a discrete package. There was no Internet to cross-reference, no background of always-on media.


pages: 337 words: 103,273

The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World by Paul Gilding

airport security, Albert Einstein, Bob Geldof, BRICs, carbon footprint, clean water, cleantech, Climategate, commoditize, corporate social responsibility, creative destruction, decarbonisation, energy security, Exxon Valdez, failed state, fear of failure, income inequality, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, market fundamentalism, mass immigration, Naomi Klein, Nelson Mandela, new economy, nuclear winter, oil shock, peak oil, Ponzi scheme, purchasing power parity, Ronald Reagan, shareholder value, The Spirit Level, The Wealth of Nations by Adam Smith, union organizing, University of East Anglia

First will be the old economy and system trying to fix itself with existing assumptions and mechanisms. This response will assume we can continue to have economic growth, but that it needs to be more efficient and with lower carbon intensity. Second will be the push to build a new economy with transformational thinking. This will include a shift from consumerism and a physically defined quality of life along with strong moves to more localized economies and stronger global cooperation. Both the old economy and new economy approaches are critical in different phases; it is not a battle between them. However, it is the new economy response that will ultimately become dominant for the reason outlined in earlier chapters—the physical impossibility of continued material economic growth. The old economy response will be about leveraging existing economic and political models, systems, and beliefs to mobilize society’s emergency response plan.

Many will rail against this, but to little effect. An existing system is powerful and doesn’t give up its power lightly. Besides, we need them to run the war, something they’re very good at! Indeed, if they don’t run a successful war, we will be building a new economy from the village up with just a few hundred million people and a whole lot less technology and knowledge, making that job far harder and slower. Not to mention the suffering of billions of people on the way to that new starting point. The efforts of those who seek to build a new economy should instead be focused on doing just that: working on building new economic models and ownership structures, developing successful purpose-driven businesses, and driving the transformation in culture and values we will need. The laws of physics dictate that the old economy approach will fail because continued material economic growth is impossible.

At first I thought this was just because I understood it better, with my background as an environmental campaigner and the amount of time I had spent examining the science of sustainability and climate change. It also had the drama of a crisis, making it an easier communications task. To correct this, I spent more time exploring the extraordinary range of exciting activities around the world being undertaken by people preparing for the transition to a new economy. There are so many amazing stories, some of which we’ll cover later, it is easy to get excited about what’s possible. Despite learning a great deal and being inspired by the stories and people I came across, I found that my approach didn’t fundamentally change. It was the Crash that got the attention and energy of both my audiences and me. Then, when I was presenting to a Cambridge BSP seminar in New York in 2007, to a largely business audience, I was going through the Crash and was suddenly overwhelmed by a great sense of sadness, and I actually started to cry—not a good look for a big Aussie bloke!


pages: 346 words: 89,180

Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel, Stian Westlake

"Robert Solow", 23andMe, activist fund / activist shareholder / activist investor, Airbnb, Albert Einstein, Andrei Shleifer, bank run, banking crisis, Bernie Sanders, business climate, business process, buy and hold, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, cognitive bias, computer age, corporate governance, corporate raider, correlation does not imply causation, creative destruction, dark matter, Diane Coyle, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Glaeser, Elon Musk, endogenous growth, Erik Brynjolfsson, everywhere but in the productivity statistics, Fellow of the Royal Society, financial innovation, full employment, fundamental attribution error, future of work, Gini coefficient, Hernando de Soto, hiring and firing, income inequality, index card, indoor plumbing, intangible asset, Internet of things, Jane Jacobs, Jaron Lanier, job automation, Kenneth Arrow, Kickstarter, knowledge economy, knowledge worker, laissez-faire capitalism, liquidity trap, low skilled workers, Marc Andreessen, Mother of all demos, Network effects, new economy, open economy, patent troll, paypal mafia, Peter Thiel, pets.com, place-making, post-industrial society, Productivity paradox, quantitative hedge fund, rent-seeking, revision control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Sand Hill Road, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, six sigma, Skype, software patent, sovereign wealth fund, spinning jenny, Steve Jobs, survivorship bias, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Tim Cook: Apple, total factor productivity, Tyler Cowen: Great Stagnation, urban planning, Vanguard fund, walkable city, X Prize, zero-sum game

Authors like Charles Leadbeater suggested we might soon be “living on thin air.” The bursting of the dot-com bubble in 2000 dampened some of the wilder claims about a new economy, but research continued among economists to understand what exactly was changing. It was in this context that a group of economists assembled in Washington in 2002 at a meeting of the Conference on Research in Income and Wealth to think about how exactly to measure the types of investment that people were making in what they were calling “the new economy.” At this conference and afterwards, Carol Corrado and Dan Sichel of the US Federal Reserve Board and Charles Hulten of the University of Maryland developed a framework for thinking about different types of investment in the new economy. To get an idea of what these sorts of investment are, consider the most valuable company in the world at the time of the conference: Microsoft.

Perhaps that is best done by research institutes rather than conventional universities and, perhaps paradoxically, the research that should be supported should explicitly not be immediately commercializable, since that can be left in private hands. 9 Competing, Managing, and Investing in the Intangible Economy What will successful companies look like in an intangible-rich economy, and how can managers and investors create and invest in them? In this chapter we’ll look at what people thought the new economy might mean for companies and managers, and how it hasn’t quite worked out that way, due, we think, to the characteristics of intangibles. We’ll then look at whether the rules for sustaining competitive advantage have changed (they haven’t), if management is becoming more important (it is), and how suited current accounting measures are for investors to identify such advantage (they aren’t). Back in the heady days of the late 1990s, when pundits began to be excited en masse about a new economy, there was something of a shared vision of what businesses would need to do to succeed in the new economy, and what that would mean for management and working life. Charles Handy’s 1994 book The Future of Work forecasted, presciently, a future of portfolio jobs and careers for the well-educated and precarious subcontracting for others.

But then something happened that changed the economic agenda: the global financial crisis. Economists and economic policymakers were, quite reasonably, less interested in understanding a purported new economy than in preventing the economy as a whole from collapsing into ruin. Once the most dangerous part of the crisis had been averted, a set of new and rather bleak problems came to dominate economic debate: how to fix a financial system that had so calamitously failed, the growing awareness that inequality of wealth and income had risen sharply, and how to respond to a stubborn stagnation in productivity growth. To the extent that the idea of the new economy was still discussed, it was mostly framed in pessimistic, even dystopian terms: Had technological progress irreversibly slowed, blasting our economic hopes? Would technology turn bad, producing robots that would steal everyone’s jobs, or give rise to malign and powerful forms of artificial intelligence?


pages: 478 words: 126,416

Other People's Money: Masters of the Universe or Servants of the People? by John Kay

Affordable Care Act / Obamacare, asset-backed security, bank run, banking crisis, Basel III, Bernie Madoff, Big bang: deregulation of the City of London, bitcoin, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, buy and hold, call centre, capital asset pricing model, Capital in the Twenty-First Century by Thomas Piketty, cognitive dissonance, corporate governance, Credit Default Swap, cross-subsidies, dematerialisation, disruptive innovation, diversification, diversified portfolio, Edward Lloyd's coffeehouse, Elon Musk, Eugene Fama: efficient market hypothesis, eurozone crisis, financial innovation, financial intermediation, financial thriller, fixed income, Flash crash, forward guidance, Fractional reserve banking, full employment, George Akerlof, German hyperinflation, Goldman Sachs: Vampire Squid, Growth in a Time of Debt, income inequality, index fund, inflation targeting, information asymmetry, intangible asset, interest rate derivative, interest rate swap, invention of the wheel, Irish property bubble, Isaac Newton, John Meriwether, light touch regulation, London Whale, Long Term Capital Management, loose coupling, low cost airline, low cost carrier, M-Pesa, market design, millennium bug, mittelstand, money market fund, moral hazard, mortgage debt, Myron Scholes, NetJets, new economy, Nick Leeson, Northern Rock, obamacare, Occupy movement, offshore financial centre, oil shock, passive investing, Paul Samuelson, peer-to-peer lending, performance metric, Peter Thiel, Piper Alpha, Ponzi scheme, price mechanism, purchasing power parity, quantitative easing, quantitative trading / quantitative finance, railway mania, Ralph Waldo Emerson, random walk, regulatory arbitrage, Renaissance Technologies, rent control, risk tolerance, road to serfdom, Robert Shiller, Robert Shiller, Ronald Reagan, Schrödinger's Cat, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, sovereign wealth fund, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, Steve Wozniak, The Great Moderation, The Market for Lemons, the market place, The Myth of the Rational Market, the payments system, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Tobin tax, too big to fail, transaction costs, tulip mania, Upton Sinclair, Vanguard fund, Washington Consensus, We are the 99%, Yom Kippur War

The dot.com boom began in 1995 with the publication of a research note pointing out the commercial opportunities of the internet from Mary Meeker of Morgan Stanley (who would become known as ‘the internet goddess’) and the flotation of Netscape (which devised the first accessible internet browser).23 By 1999 journalists, consultants and business people talked of a ‘new economy’. Businesses that had never made a penny of profit, and never would, were floated on world stock exchanges at fantastic valuations. The demand for ‘new economy’ stocks spilled over into every business that promoters could associate, however tenuously, with high technology. The last phase of the new economy bubble in early 2000 was aided by the liquidity pumped into the US economy by the Federal Reserve to avert the threat supposedly posed by the ‘millennium bug’: errors in computer programs in handling the date 2000. In the spring of 2000 the new economy boom came to its predictable, if not widely predicted, end. The Fed then cut interest rates and gave a further monetary stimulus.

Ponzi and Madoff went to prison because they lied. But the new economy bubble of 1999–2000 was a – perhaps legal – Ponzi scheme. Early investors made large profits, but it was later investors, attracted by the prospect of similar gains, who provided the funds that made these profits possible. Securities with no intrinsic value were bought and sold repeatedly by people whose motive for buying was knowledge of the profits that had already been made in such stocks and the expectation (fulfilled in many cases) that they would make similar profits by selling these stocks on at higher prices still. Eventually, as in all Ponzi schemes, the supply of fresh buyers ran out, the bubble burst and the share prices of internet stocks collapsed. The boundaries between scam, deception, self-deception and mistake are fuzzy. In the new economy bubble some early-stage investors made money, but most stayed on in the hope of making still more.

In the new economy bubble some early-stage investors made money, but most stayed on in the hope of making still more. Even highly intelligent people overestimate their ability to time the correction of market mispricing. Legendary investors such as Julian Robertson and George Soros misjudged the new economy bubble and damaged their reputations. Warren Buffett stayed resolutely on the sidelines, and was derided for his failure to ‘get it’. Isaac Newton famously lost money in the South Sea Bubble, an early Ponzi scheme. As the new economy bubble expanded, I asked myself often, ‘Do people in financial conglomerates selling products really believe these things, or are they cynical in their deception?’ I came to realise that the truth lay somewhere in between: neither naïveté nor fraud provided sufficient explanation. It was convenient to repeat the received opinions of organisations and colleagues.


pages: 204 words: 67,922

Elsewhere, U.S.A: How We Got From the Company Man, Family Dinners, and the Affluent Society to the Home Office, BlackBerry Moms,and Economic Anxiety by Dalton Conley

assortative mating, call centre, clean water, commoditize, dematerialisation, demographic transition, Edward Glaeser, extreme commuting, feminist movement, financial independence, Firefox, Frank Levy and Richard Murnane: The New Division of Labor, Home mortgage interest deduction, income inequality, informal economy, Jane Jacobs, Joan Didion, John Maynard Keynes: Economic Possibilities for our Grandchildren, knowledge economy, knowledge worker, labor-force participation, late capitalism, low skilled workers, manufacturing employment, mass immigration, McMansion, mortgage tax deduction, new economy, off grid, oil shock, PageRank, Ponzi scheme, positional goods, post-industrial society, post-materialism, principal–agent problem, recommendation engine, Richard Florida, rolodex, Ronald Reagan, Silicon Valley, Skype, statistical model, The Death and Life of Great American Cities, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, transaction costs, women in the workforce, Yom Kippur War

Similarly, in Communist countries, it was the intellectuals who took over the state bureaucracy who flourished.45 Those American artists who “hid out” during the late 1950s and early 1960s in illegal lofts gave birth to the newly powerful creative class of the new millennium. While individual artists themselves probably attained or retained little power (though, had they purchased their loft conversions, they would have made millions), they spawned a whole new economy. Not only do places like Richmond, Virginia, and even Princeton, New Jersey, now brag that they offer “downtown lofts” (even if some of these are, in fact, new constructions made to look like old industrial conversions), a bohemian-type lifestyle has come to dominate the upper echelons of the new economy. By this I don’t just mean that—as Richard Florida asserts—“creativity” is now cherished and rewarded in a growing sector of the high-wage economy. I mean that the very rhythms of work of most professionals today could be clearly seen in the natural light of the artist live-work lofts of 1960: an integration of home and work; odd hours; individualized, nonsalaried work; status insecurity; social networking; and so on.

Alienated from the labor process and product, it thus was inevitable that he was also alienated from himself: The act of creation that had made him uniquely human was no longer possible (never mind that recent studies have shown that chimps are tool creators as well). Finally, he was alienated from other people, since capitalism makes all relations market relations. Mrs. and Mr. Elsewhere are also alienated from their products. The intangibility of the new economy means that we never have a sense of having produced a single actual thing. The “satisfaction” of having earned a 15 percent return for one’s clients or written the language for the contract of the leveraged buyout or talked the patient through their neuroses simply cannot substitute for the leather shoe or wooden chair that we once fashioned with our own hands. In today’s economy, many are dogged by the question, “What was my value added?”

Not only can you systematize your search for a life partner or casual sexual encounter, but you can also find a meditative body work consultant, a mover, a lawyer, a Tarot card reader who makes house calls, someone to care for your elderly grandmother, someone to struggle through homework with your kids, a yoga consultant, even an ovum whose previous owner scored high on her SATs, or, alternatively, someone to carry your own ovum. Market conquest used to be spatial, that is, global in scale. With periodic crises of capitalism—economic downturns—we continually needed to find new places to sell our “stuff.” Hence colonialism, which solved the problems of finding raw materials and new customers (not to mention cheap labor). Now, with intellectual property laws (key to the new economy) difficult to enforce in emerging markets, a sort of internal colonization is taking place. By internal colonization, I mean that whereas once we sailed the seas in search of new markets for our products and new sources of raw materials and labor, now we do this increasingly domestically by expanding the sheer number and type of markets. Whether embodied by the rise of the bottled-water industry and its displacement of public drinking fountains, or the proliferation of nannies, personal trainers, and assistants, or the ability to sell family memorabilia on eBay, money and market relations have eroded barriers that once maintained the sanctity and clarity of private space.


pages: 239 words: 56,531

The Secret War Between Downloading and Uploading: Tales of the Computer as Culture Machine by Peter Lunenfeld

Albert Einstein, Andrew Keen, anti-globalists, Apple II, Berlin Wall, British Empire, Brownian motion, Buckminster Fuller, Burning Man, business cycle, butterfly effect, computer age, creative destruction, crowdsourcing, cuban missile crisis, Dissolution of the Soviet Union, don't be evil, Douglas Engelbart, Douglas Engelbart, Dynabook, East Village, Edward Lorenz: Chaos theory, Fall of the Berlin Wall, Francis Fukuyama: the end of history, Frank Gehry, Grace Hopper, gravity well, Guggenheim Bilbao, Honoré de Balzac, Howard Rheingold, invention of movable type, Isaac Newton, Jacquard loom, Jane Jacobs, Jeff Bezos, John Markoff, John von Neumann, Kickstarter, Mark Zuckerberg, Marshall McLuhan, Mercator projection, Metcalfe’s law, Mother of all demos, mutually assured destruction, Nelson Mandela, Network effects, new economy, Norbert Wiener, PageRank, pattern recognition, peer-to-peer, planetary scale, plutocrats, Plutocrats, post-materialism, Potemkin village, RFID, Richard Feynman, Richard Stallman, Robert Metcalfe, Robert X Cringely, Schrödinger's Cat, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, Skype, social software, spaced repetition, Steve Ballmer, Steve Jobs, Steve Wozniak, Ted Nelson, the built environment, The Death and Life of Great American Cities, the medium is the message, Thomas L Friedman, Turing machine, Turing test, urban planning, urban renewal, Vannevar Bush, walkable city, Watson beat the top human players on Jeopardy!, William Shockley: the traitorous eight

But this period was shorter lived than even the Seattle protesters expected it to be. The NASDAQ, a U.S. market heavy on high-technology firms, was the most important index for the New Economy. It crested in March 2000, and within a year had lost more than half its value, vaporizing trillions in paper profits. The stock market losses for three companies alone—AOL, Amazon, and Yahoo!— amounted to three hundred billion dollars.4 The indexes continued to sink for the next year, and then came the critical event that signaled the complete end of the period inaugurated with the dismantling of the Berlin Wall in 1989. It was on September 11, 2001, that the markets took their next massive hit, and the newness of the so-called New Economy had its last bits of hype sucked out of it. For Americans, at least, the faith in the Market to overcome all obstacles suffered a near-fatal blow that day, not simply with the vivid reminder that history in fact had not ended, but also that all those high-flying young engineers, venture capitalists, and entrepreneurs in their Casual-Friday-Every-Day chinos and polo shirts were now being edged out of the spotlight to prepare for the return of the Blue-Suited-Wingtip-Shod-FlagpinLapelled grown-ups (think former Vice President Dick Cheney and Secretary of Defense Donald Rumsfeld).

Intergalactic Computer Network and, 108, 152, 168 Machine Histories, 64 Macintosh computer, 165–167 Macrotelevision, 56–60 Madonna, 63 Madrid, 100, 130 Mahabharata, 28 MAKE magazine, 68–69 MAKER Faires, 68–69 Manchester Mark I computer, 18 “Man-Computer Symbiosis” (Licklider), 151 Mandela, Nelson, 113 Mandiberg, Michael, 41–42 Manhattan Project, 150 Manual labor, 3 Many Eyes, 126, 193n37 Mao Zedong, 86 Marinetti, Filippo Tommaso, 44 Markets bespoke futures and, 97–104, 118, 207 INDEX Markets (continued) 120, 127, 131–132, 137–138 capitalism and, 13, 66, 75, 97–100, 104–105 (see also Commercial culture) culture machine and, 156, 161–167, 173 empowerment and, 8 entrepreneurs and, 99, 109, 156–157, 174 FIRE, 99–100 Global Business Network (GBN) and, 113, 115, 191n18 Great Depression and, 107 Greed and, 100 Internet television and, 9 mass culture and, 184n16 NASDAQ, 99 New Economy and, 97, 99, 104, 131, 138, 144–145, 190n3 prosumers and, 120–121 retail, 103–105 scenario planning and, 111–119, 191n19, 192n20 September 11, 2001 and, 99–101, 130 Slow Food and, 5–6 social campaigns and, 190n8 stickiness and, 13, 16, 24, 30–33, 37 technofabulism and, 99–100 textile, 11 unimodernism and, 45, 48, 58–59, 71, 75 Web n.0 and, 81, 83, 86, 90 Martha Stewart Living magazine, 69 MaSAI (Massively Public Applications of the Imagination), xvi, 112, 120–123, 127, 193nn32 Masai tribe, 193n32 Mashing, 25, 54–55, 57, 74 Massachusetts Institute of Technology (MIT), 71, 117, 144, 148, 151 Matrix, The (film series), 39 Mau, Bruce, 55–56, 102, 190n8 Mauchly, John, 148 McDonald’s, 5 McLuhan, Marshall, 2, 14, 116 Meaningfulness, xvi, 173 bespoke futures and, 119, 123, 128– 129, 133 categorization of, 29–30 defining, 27–29 disrupting flow and, 23–24 Enlightenment and, 129–139 play and, 32–34 power and, 32–34 stickiness and, 14, 17, 20 (see also Stickiness) toggling and, 33–34, 43, 102, 197n30 tweaking and, 32–35, 185nn22,23 unimodernism and, 42, 67, 77 uploading and, xvi, 29 Web n.0 and, 79 Mechanical calculator, 149 Mechanization, 44–45 Medium specificity, 56–57 Meliorism, xvi, 127–129, 133, 137–138 Melodium label, 27 Memex, 108, 149–151 Memory, 46–47, 60, 67, 71, 109, 149, 194nn1,6 Metcalfe, Bob, 86–87 Metro Pictures gallery, 41 Michnik, Adam, 104 Mickey Mouse, 65, 88–90 Mickey Mouse Protection Act, 90 Microcinema, 56–60 Microfilm, 149–150 Microsoft, 144–145, 163–166, 172–173, 175, 196n21 Middle-class, 44 Mindfulness, 77, 79, 183n6 bespoke futures and, 123, 129 capitalism and, 4, 13, 66, 75, 90, 103–105 208 INDEX Mindfulness (continued) disrupting flow and, 23–24 info-triage and, xvi, 20–23, 121, 132, 143 stickiness and, 14, 17, 20–24, 27–29, 42 Mobility, 81–82, 128 Modders, 69–70 “Model B32” (Breuer), 45 Modernism, 36–37, 105–108 Modern Times (film), 45 Moore, Gordon, 156 Moore’s law, 156, 195n13 Morpheus, 92 Moses, Robert, 84 Motorola, 116 Moulin Rouge (Luhrmann), 60–63 Mouse, 158–159 MP3s, 2, 27 MS-DOS, 165–166 MTV, 31, 63 Murakami, Takashi, 49 Murger, Henri, 61 Musée du quai Branly, 66 Museum of Modern Art (MOMA), 42, 117 Music bebop, 25–27 calypso, 35–37 hip-hop, 53–54, 61 jazz, 25–27, 160 Napster and, 54, 92 remixing and, 53–55 (see also Remixing) Mutually assured destruction, xi MySpace, 81 Napoleonic Wars, 21 Napster, 54, 92 Narrative, 2, 8 bespoke futures and, 108, 110, 129–139 blogosphere and, xvii, 30, 34, 49, 68, 80, 92–93, 101, 175, 177, 181n7 capitulationism and, 7, 24, 182n1 209 development of computer and, 143– 145, 174, 178 Enlightenment Electrified and, 129–139 gaming and, 188n25 isotypes and, 44, 125, 193n34 negative dialectics and, 29–30 Oprah and, xv, 180nn3,4 samizdat and, 59 storyline and, 59 unimodernism and, 58–59, 67, 71, 76 NASA, 51, 123 NASDAQ, 99 National Center for Biotechnology Information, 81 “Nature Boy” (Cole), 62 Nelson, Ted, 145, 168 Net.art, 52 Netscape, 169 Networks bespoke futures and, 98–101, 108, 112–113, 116, 119–126, 133, 137 commercial, 4–5 (see also Commercial culture) culture machine and, 143–144, 152, 167–168, 172–175, 178 development of computer, 8–9 flexibility of digital, 10 Global Business Network (GBN) and, 113, 115, 191n18 Intergalactic Computer Network and, 108, 152, 168 Metcalfe’s corollary and, 86–87 patio potato and, 10, 13 peer-to-peer, 15, 54, 92, 116, 126 stickiness and, 16–17, 22, 24, 29–36 unimodernism and, 39, 47–48, 54–57, 60, 64–65, 68–69, 73–74 Web n.0 and, 79–95 Neurath, Otto, 44, 125 New Economy, 190n3 bespoke futures and, 97, 99, 104, 131, 138 INDEX New Economy (continued) dot-com bubble and, 145 fantasies of, 104 Hustlers and, 144 Newtonian physics, 118 New York City, 25–26, 84–86, 100, 130 New Yorker, 135 New York Museum of Modern Art, 42 New York Times, 61, 103 NeXT Cube, 167–168 Nirvana, 62 NLS (oN-Line System), 160 Nobel Prize, 156 Norman, Don, 16 Nouvel, Jean, 66 Noyce, Philip, 156 “Nude on a Red Background” (Léger), 45 Obama, Barack, 31 Odyssey (Homer), 28, 94–95 Offenbach, Jacques, 62 Ogilvy, Jay, 113–114 Open source, 36, 189n12 Creative Commons and, 90–93, 123, 173 development of computer and, 144, 170–173, 177 GNU and, 171, 173 Linux and, 75, 169–173, 197n27 Raymond and, 172 Stallman and, 170–171 Torvalds and, 144, 167–173 unimodernism and, 61, 69, 74–75 Web n.0 and, 116, 121–126 Opera, 40, 45, 60–63, 187n18 Oppenheimer, J.

The post-1989 period contained a multitude of features, but one unifying construct was the belief that after the fall of the Berlin Wall and then the Soviet Union itself, not just Communism, but all the countervailing forces against market capitalism were vanquished, and not just for the moment but literally for all time. The Market with a capital M was the grail at the end of Francis Fukayama’s treatise The End of History.2 The Market was the solution for all questions, the Market would bring peace and prosperity, and would free itself from the tyranny of the business cycle, evolving into an entirely invisible, frictionless, perpetual motion machine that would take the name of the New Economy (again with capital letters).3 This immediate post-1989 period coincided with the most utopian phase of the culture machine: the euphoria of the World Wide Web’s first Wild, Wild West phase. For close to 97 CHAPTER 5 a decade, people talked about bright, posteconomic futures, perfectly transparent global markets, and the glories of pure, unadulterated information flowing around the world at the speed of light.


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Lab Rats: How Silicon Valley Made Work Miserable for the Rest of Us by Dan Lyons

Airbnb, Amazon Web Services, Apple II, augmented reality, autonomous vehicles, basic income, bitcoin, blockchain, business process, call centre, Clayton Christensen, clean water, collective bargaining, corporate governance, corporate social responsibility, creative destruction, cryptocurrency, David Heinemeier Hansson, Donald Trump, Elon Musk, Ethereum, ethereum blockchain, full employment, future of work, gig economy, Gordon Gekko, greed is good, hiring and firing, housing crisis, income inequality, informal economy, Jeff Bezos, job automation, job satisfaction, job-hopping, John Gruber, Joseph Schumpeter, Kevin Kelly, knowledge worker, Lean Startup, loose coupling, Lyft, Marc Andreessen, Mark Zuckerberg, McMansion, Menlo Park, Milgram experiment, minimum viable product, Mitch Kapor, move fast and break things, move fast and break things, new economy, Panopticon Jeremy Bentham, Paul Graham, paypal mafia, Peter Thiel, plutocrats, Plutocrats, precariat, RAND corporation, remote working, RFID, ride hailing / ride sharing, Ronald Reagan, Rubik’s Cube, Ruby on Rails, Sam Altman, Sand Hill Road, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, Skype, Social Responsibility of Business Is to Increase Its Profits, software is eating the world, Stanford prison experiment, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, TaskRabbit, telemarketer, Tesla Model S, Thomas Davenport, Tony Hsieh, Toyota Production System, traveling salesman, Travis Kalanick, tulip mania, Uber and Lyft, Uber for X, uber lyft, universal basic income, web application, Whole Earth Catalog, Y Combinator, young professional

I hung in for nearly two years and left with my self-esteem in tatters, half-believing that my boss had been right about me, that I simply did not have what it takes to succeed in the new economy. I had gone into the job with high hopes, deceived by the perks and pampering into believing that these new companies were supportive, progressive organizations inventing a new human-centric approach to work. I came away believing the opposite, that modern workplaces were actually worse than the old companies they were replacing. They were digital sweatshops, akin to the brutal textile mills and garment factories from more than a century ago. After my own “graduation,” I decided to write a book about my experience. I wanted to explain how, after years of writing glowing magazine articles about the new economy, I had ventured into the new economy and found out that most of what I believed was wrong. Disrupted wasn’t meant to be a book about corporate culture.

On one side of a big hall there was something called “Startup Alley,” where desperate start-up founders with generally terrible ideas had paid a thousand bucks to rent a booth in hopes of being discovered by a venture capitalist. On the other side was an auditorium where start-up bros assembled in panels to talk about the new economy. My favorite was a forty-year-old former IBM management consultant, a guy with a law degree and an MBA, who now had launched a company to sell sneakers online and thus had arrived dressed like a teenage skateboard kid: funky T-shirt over a white long underwear shirt, backward baseball cap, ankle-high red sneakers left untied, a giant ring on one hand, and on his left wrist a huge watch and a groovy-dude braided leather bracelet. TechCrunch Disrupt encapsulated everything that had gone wrong with the new economy—the bros and fake bros, the bullshit, the scammers, the hordes of people who wanted to cash in and get rich, by any means necessary. But two extraordinary things happened at this show.

You find yourself being gaslighted, immersed in the kind of shared psychosis and group delusion found in cults. You know these workshops are pointless, and that no one is going to be transformed by Legos. But to keep your job, you must play along. You must deliver a performance and convince management that you are flexible, adaptable, and open to change, the kind of engaged, dynamic worker who meets the needs of the new economy. Basically the company is conducting a large-scale experiment in organizational behavior. They’d like to test out some theories on you. So you all go into the box, and you are poked and prodded with various stimuli to see how you respond. Your office has become a psychology laboratory, run by a bunch of quacks. You’re not a duck. You’re a lab rat. This coffee date with Legos marked just a single stop on what would become my yearlong quest to figure out how work is changing, and, more important, why it is changing.


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Why Stock Markets Crash: Critical Events in Complex Financial Systems by Didier Sornette

Asian financial crisis, asset allocation, Berlin Wall, Bretton Woods, Brownian motion, business cycle, buy and hold, capital asset pricing model, capital controls, continuous double auction, currency peg, Deng Xiaoping, discrete time, diversified portfolio, Elliott wave, Erdős number, experimental economics, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, global village, implied volatility, index fund, information asymmetry, intangible asset, invisible hand, John von Neumann, joint-stock company, law of one price, Louis Bachelier, mandelbrot fractal, margin call, market bubble, market clearing, market design, market fundamentalism, mental accounting, moral hazard, Network effects, new economy, oil shock, open economy, pattern recognition, Paul Erdős, Paul Samuelson, quantitative trading / quantitative finance, random walk, risk/return, Ronald Reagan, Schrödinger's Cat, selection bias, short selling, Silicon Valley, South Sea Bubble, statistical model, stochastic process, stocks for the long run, Tacoma Narrows Bridge, technological singularity, The Coming Technological Singularity, The Wealth of Nations by Adam Smith, Tobin tax, total factor productivity, transaction costs, tulip mania, VA Linux, Y2K, yield curve

The Nasdaq Composite consists mainly of stock related to the so-called “New Economy,” that is, the Internet, software, computer hardware, telecommunications, and similar sectors. A main characteristic of these companies is that their price–earning ratios (P/Es), and even more so their price–dividend ratios, often come in three digits. Some, such as VA LINUX, actually have a negative earning/share (of −168). Yet they finan cial crashe s : w h a t, w h y, a n d w h e n? 21 are traded at around $40 per share, which is close to the price of a share of Ford in early March 2000. In constrast, so-called “Old Economy” companies, such as Ford, General Motors, and DaimlerChrysler, have P/E ≈ 10. The difference between Old Economy and New Economy stocks is thus the expectation of future earnings as discussed in [282] (see also [395] for a new view on speculative pricing): investors expect an enormous increase in, for example, the sale of Internet and computer-related products rather than of cars and are hence more willing to invest in Cisco rather than in Ford, notwithstanding the fact that the earning per share of the former is much smaller than for the latter.

Many companies associated with the esoteric high-tech of space travel and electronics sold in 1961 for over 200 times their previous year’s earning. Previously, the traditional rule had been that the price should be a multiple of 10 to 15 times their earnings. This is a story all too familiar! The “tronics boom,” as it was called, actually has remarkably similar features to the New Economy boom preceding the October 1929 crash or the New Economy boom of the late 1990s, ending in the April 2000 crash on the Nasdaq index. The best fit of the DJIA from 1954 to the end of 1961 by the logperiodic power law formula is shown in Figure 7.21. This period of time was followed by a “slow crash,” in the sense that the stock market 268 chapter 7 750 700 650 Dow Jones 600 550 500 450 400 350 300 250 54 55 56 57 58 59 Date 60 61 62 63 Fig. 7.21.

THE NASDAQ CRASH OF APRIL 2000 In the last few years of the second millenium, there was a growing divergence in the stock market between New Economy and Old Economy stocks, between technology and almost everything else. Over 1998 and 1999, stocks in the Standard & Poor’s technology sector rose nearly fourfold, while the S&P 500 index gained just 50%. And without technology, the benchmark would be flat. In January 2000 alone, 30% of net inflows into mutual funds went to science and technology funds, versus just 8.7% into S&P 500 index funds. As a consequence, the average price-over-earnings ratio (P/E) for Nasdaq companies was above 200 (corresponding to a ridiculous earnings yield of 05%), a stellar value above anything that serious economic valuation theory would consider reasonable. It is worth recalling that the very same concept and wording of a so-called New Economy was hot in the minds and mouths of investors in the 1920s and in the early 1960s, as already mentioned.


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Ours to Hack and to Own: The Rise of Platform Cooperativism, a New Vision for the Future of Work and a Fairer Internet by Trebor Scholz, Nathan Schneider

1960s counterculture, activist fund / activist shareholder / activist investor, Airbnb, Amazon Mechanical Turk, barriers to entry, basic income, bitcoin, blockchain, Build a better mousetrap, Burning Man, capital controls, citizen journalism, collaborative economy, collaborative editing, collective bargaining, commoditize, conceptual framework, crowdsourcing, cryptocurrency, Debian, deskilling, disintermediation, distributed ledger, Ethereum, ethereum blockchain, future of work, gig economy, Google bus, hiring and firing, income inequality, information asymmetry, Internet of things, Jacob Appelbaum, Jeff Bezos, job automation, Julian Assange, Kickstarter, lake wobegon effect, low skilled workers, Lyft, Mark Zuckerberg, means of production, minimum viable product, moral hazard, Network effects, new economy, offshore financial centre, openstreetmap, peer-to-peer, post-work, profit maximization, race to the bottom, ride hailing / ride sharing, SETI@home, shareholder value, sharing economy, Shoshana Zuboff, Silicon Valley, smart cities, smart contracts, Snapchat, TaskRabbit, technoutopianism, transaction costs, Travis Kalanick, Uber for X, uber lyft, union organizing, universal basic income, Whole Earth Catalog, WikiLeaks, women in the workforce, Zipcar

As we embark upon building these new models, defining our core values can provide useful guidance to the emergence of a new economic system. The essence of platform cooperativism is a rejection of uneven extraction and an emphasis on cooperativism. This movement is rightly asking: Who are we problem-solving for? What is the impact of the new economy on the workers who are the engine that drives it? Will the new economy be more or less equitable than the old economy? Will there be more empathy in the new economy? Will the new economy work for all of us, or is it an online version of the economy that worked for just a few? At the National Domestic Workers Alliance, we already know what it looks like when the economy optimizes for some of us and extracts value from the least visible of us. We’ve been working on promoting respect and dignity for some of our most invisible and undervalued workers in the offline economy for years, and what we’ve heard from these workers about the online economy echoes those injustices.

In many areas of business, technology, and even manufacturing, organizations rely on certain agreed-upon standards to establish a set of common operating assumptions describing what the system should do—not necessarily how the system should do it. Whether you’re talking about platform co-ops or Silicon Valley giants, we believe a set of values-based specs for the new economy could serve as a guide to embedding dignity and respect into all operations areas—a Good Work Code for the new economy. Our Good Work Code is a set of eight simple principles that can serve as a framework, a guide ensuring that the new platforms are creating good work: Safety: Good work does not allow for us to wonder at the start of a shift if we will be unharmed by the end. Everyone deserves to be safe at work, always. Stability & Flexibility: Good work is made possible when we are not anxious about meeting life demands, whether it’s making an unexpected doctor’s appointment or making enough money to pay the bills.

Everyone wants to grow and learn at work as they do in other areas of their life. The Good Work Code doesn’t introduce any revolutionary new values. It doesn’t innovate or disrupt previous thinking on good work standards. But this framework, or a derivative of it, will be essential to building an equitable platform. We are at the exact right moment in time to insert this framework into the DNA of the new economy, to correct the course so that we’re building a new economy that works for all of us. With the emergence of the platform economy, we have one of those rare opportunities to reset the norms and culture of work. At its best, technology strengthens our humanity and our connectedness. We shape our economy as much as it shapes us, and we have an opportunity to make sure the digital revolution is supported by a long-overdue revolution in values. 34.


Hollow City by Rebecca Solnit, Susan Schwartzenberg

blue-collar work, Brownian motion, dematerialisation, Golden Gate Park, Haight Ashbury, housing crisis, informal economy, Jane Jacobs, Loma Prieta earthquake, low skilled workers, new economy, New Urbanism, pets.com, rent control, Silicon Valley, South of Market, San Francisco, The Death and Life of Great American Cities, union organizing, upwardly mobile, urban planning, urban renewal, wage slave

CITY and they're probably facing an unafford- A little further down Mission Street, the Bay View Bank Building, an office building housing clinics, Spanish-language media, nonprofits, this was leased which to a dot-com, evicting is them all. and In the old days of gentrification, getting bounced firom a neighborhood meant you just landed somewhere else, but in this available chairs are over the horizon. Exchange is going to going to lose is I Cliff home aren't virtual, Hengst and find out that he's of nine years. The Stock Exchange new economy is virtual: it doesn't require locations. home because the people who work in the new economy and they make more money than he does. The apartment he shares with down be torn moved his boyfriend Scott to make way to L.A. in the last there, too, since no one and the auto body shop below for condos. Cliff month, he like him can San Francisco without tells city in countless ways, Cliff will like a lot talk me, and he artists artist.

issue and "Pot " driving in this cushy neighborhood. Radio Shack. The march broke up abruptlv of a protester Xew Yuppies on Rhoda Raige. a spoof ston.- Dav s The on selfish- new economy accelerated and equipped use their cars and dispel the safety, accessibilit}' and d\iliD.- carry their private space with them, and privatization of that space; they becomes not just an economic issue but a sodal attitude (expressed in such items as car alarms, tor\- which place the rights of private property in public over the audi- peace of the neighborhood tims of the high-pressure of, say, nmning Literal victims. in dri\Tng . One could new economy, a stop sign to get to San Francisco is regard the privatized as vic- but partidpation in work faster is it likely to create being suburbanized by people evers^ here. even though dri\'ing is at the level a disastrous more who persist form of trans- SKID MARKS ON THE SOCIAL CONTRACT portation in this small, European-scale is scarce in months of most parts of the 2000, being Though San gridlock common, parking and pedestrians were, mowed down in part urban figures of true at the rate in the first three of almost one a week.

economy of air it's operating at warp speed. Valley than in other parts of the country right now, that won't last long. 'Silicon Valley-style economies are what we can look forward to every- where,' says Robert H. Frank, an economist at Cornell University who has HOLLOW 18 CITY long studied the increasing gap between the rich and poor. economy, either you have a lottery who don't When are not the happy about new economy the city's existing culture as in ethnic cultures, are under siege, you don't. And the people it.'"'' arrived in San Francisco, it began to lay waste —culture both in the sense of cultural and of creative activity, artistic and while the racial aspects renewal have often been addressed, ative activity (and, ticket or new 'In this this book and diversity, Both political.


file:///C:/Documents%20and%... by vpavan

accounting loophole / creative accounting, activist fund / activist shareholder / activist investor, asset allocation, Berlin Wall, business cycle, buttonwood tree, buy and hold, corporate governance, corporate raider, disintermediation, diversification, diversified portfolio, Donald Trump, estate planning, fixed income, index fund, intangible asset, interest rate swap, margin call, money market fund, Myron Scholes, new economy, price discovery process, profit motive, risk tolerance, shareholder value, short selling, Silicon Valley, Small Order Execution System, Steve Jobs, stocks for the long run, stocks for the long term, technology bubble, transaction costs, Vanguard fund, women in the workforce, zero-coupon bond, éminence grise

Dingell The accounting industry cited numerous reasons for its opposition to the SEC's auditor independence rules, and one of the major reasons was the "New Economy" argument. In essence, it said that accounting firms had to be able to perform consulting work for audit clients because only then could the accountants develop new ways to measure the value of technology, telecommunications, Internet, and other growth companies that make up the New Economy. This argument is cited in the following letter from three members of the Senate Banking Committee, which also oversees the SEC (Bayh and Schumer are Democrats and Bennett is a Republican). The trio request a hearing by the panel's securities subcommittee chairman in an effort to slow down the SEC rules until the New Economy issue could be vented. United States Senate Washington, DC 20510 July 21, 2000 The Honorable Rod Grams Chairman Senate Subcommittee on Securities United States Senate Washington, DC 20510 Dear Mr.

United States Senate Washington, DC 20510 July 21, 2000 The Honorable Rod Grams Chairman Senate Subcommittee on Securities United States Senate Washington, DC 20510 Dear Mr. Chairman: We commend you for taking the initiative to hold a hearing on financial reporting in the New Economy. The hearing began exploration of the challenges that New Economy developments have placed on our traditional accounting standards and securities laws. Indeed, it appears that these standards and laws cannot fully represent the value of many companies in the New Economy. Business reporting is a critical subject that continues to deserve Congressional attention. In addition to this insightful hearing, we respectfully request that you hold a hearing on the Securities and Exchange Commission's (SEC) proposed rulemaking on auditor independence. Although the SEC's proposal was discussed briefly at Wednesday's hearing, the SEC, industry representatives, and others should be provided a full opportunity publicly to debate the appropriateness of the rulemaking.

This especially concerns us because it appears that the SEC has not demonstrated a substantive basis for imposing these far-reaching limitations this year. The SEC would be limiting auditing firms' expertise just when auditors appear to need it most in order to fully assess today's sophisticated New Economy companies. The broader issues of the New Economy require further study by Congress before the SEC implements this rule. Therefore, we believe that it is wholly appropriate for a hearing on the SEC's proposal, and other New Economy business reporting issues. Thank you for your consideration of this important request. Sincerely, Evan Bayh Charles Schumer Robert F. Bennett This letter from ten of the twenty members of the Senate Banking Committee— eight are Republicans and two are Democrats— also seeks to postpone the auditor independence rules.


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Uberland: How Algorithms Are Rewriting the Rules of Work by Alex Rosenblat

"side hustle", Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, big-box store, call centre, cashless society, Cass Sunstein, choice architecture, collaborative economy, collective bargaining, creative destruction, crowdsourcing, disruptive innovation, don't be evil, Donald Trump, en.wikipedia.org, future of work, gender pay gap, gig economy, Google Chrome, income inequality, information asymmetry, Jaron Lanier, job automation, job satisfaction, Lyft, marginal employment, Mark Zuckerberg, move fast and break things, Network effects, new economy, obamacare, performance metric, Peter Thiel, price discrimination, Ralph Waldo Emerson, regulatory arbitrage, ride hailing / ride sharing, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, social software, stealth mode startup, Steve Jobs, strikebreaker, TaskRabbit, Tim Cook: Apple, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, union organizing, universal basic income, urban planning, Wolfgang Streeck, Zipcar

Uber may be changing the rules of work, but thanks to digital communications, drivers, too, are creating a workplace culture. These centers of community create an institutional memory that persists even when Uber’s practices change. What remains to be seen is how these drivers and their new workplace practices will influence broader culture—including other jobs and other technology companies—because Uber, as the cultural icon of the New Economy, has already left an indelible mark on far more than ridehailing. HOW DRIVERS ROLL IN A NEW WORLD OF WORK Ridehail drivers are among those in the New Economy adapting to working for a faceless boss. In our early research, my colleague Luke Stark and I found that an algorithmic manager directs how Uber drivers behave and when and where they work, using responsive incentives and penalties that affect their pay. This finding held true even years later as I continued my research.

International Finance Corporation–World Bank, “Driving toward Equality: Women, Ride-Hailing, and the Sharing Economy,” March 1, 2018, http://documents.worldbank.org/curated/en/856531520948298389/Driving-toward-equality-women-ride-hailing-and-the-sharing-economy. 69. Kaleigh Rogers, “Love in the Time of Ridesharing,” Motherboard, May 27, 2016, https://motherboard.vice.com/en_us/article/yp33yg/love-in-the-time-of-ridesharing-uber-lyft-romance-technology. 70. Lobel, “The Law of the Platform”; Calo and Rosenblat, “The Taking Economy.” 71. Tressie McMillan Cottom, “Credentials, Jobs and the New Economy,” Inside Higher Ed, March 2, 2017, www.insidehighered.com/views/2017/03/02/impact-new-economy-profit-colleges-and-their-students-essay. 72. Alex Rosenblat and Luke Stark, “Algorithmic Labor and Information Asymmetries: A Case Study of Uber’s Drivers,” International Journal of Communication 10, no. 27 (2016): 3762, http://ijoc.org/index.php/ijoc/article/view/4892. 73. A portion of my fieldwork cited here and at different points throughout this book has also been used in a joint research project and related publications.

. | Identifiers: LCCN 2018023686 (print) | LCCN 2018025474 (ebook) | ISBN 9780520970632 (e-book) | ISBN 9780520298576 (cloth : alk. paper) Subjects: LCSH: Uber (Firm) | Ridesharing—United States. Classification: LCC HE5620.R53 (ebook) | LCC HE5620. R53 R67 2018 (print) | DDC 388.4/13212—dc23 LC record available at https://lccn.loc.gov/2018023686 Manufactured in the United States of America 26 25 24 23 22 21 20 19 18 10 9 8 7 6 5 4 3 2 1 CONTENTS List of Illustrations Acknowledgments Introduction: Using an App to Go to Work—Uber as a Symbol of the New Economy 1. Driving as Glamorous Labor: How Uber Uses the Myths of the Sharing Economy 2. Motivations to Drive: How Uber’s System Rewards Full-Time and Recreational Drivers Differently 3. The Technology Pitch: How Uber Creates Entrepreneurship for the Masses 4. The Shady Middleman: How Uber Manages Money 5. Behind the Curtain: How Uber Manages Drivers with Algorithms 6. In the Big Leagues: How Uber Plays Ball Conclusion: The New Age of Uber—How Technology Consumption Rewrote the Rules of Work Appendix 1.


pages: 361 words: 81,068

The Internet Is Not the Answer by Andrew Keen

"Robert Solow", 3D printing, A Declaration of the Independence of Cyberspace, Airbnb, AltaVista, Andrew Keen, augmented reality, Bay Area Rapid Transit, Berlin Wall, bitcoin, Black Swan, Bob Geldof, Burning Man, Cass Sunstein, citizen journalism, Clayton Christensen, clean water, cloud computing, collective bargaining, Colonization of Mars, computer age, connected car, creative destruction, cuban missile crisis, David Brooks, disintermediation, disruptive innovation, Donald Davies, Downton Abbey, Edward Snowden, Elon Musk, Erik Brynjolfsson, Fall of the Berlin Wall, Filter Bubble, Francis Fukuyama: the end of history, Frank Gehry, Frederick Winslow Taylor, frictionless, full employment, future of work, gig economy, global village, Google bus, Google Glasses, Hacker Ethic, happiness index / gross national happiness, income inequality, index card, informal economy, information trail, Innovator's Dilemma, Internet of things, Isaac Newton, Jaron Lanier, Jeff Bezos, job automation, Joi Ito, Joseph Schumpeter, Julian Assange, Kevin Kelly, Kickstarter, Kodak vs Instagram, Lean Startup, libertarian paternalism, lifelogging, Lyft, Marc Andreessen, Mark Zuckerberg, Marshall McLuhan, Martin Wolf, Metcalfe’s law, move fast and break things, move fast and break things, Nate Silver, Nelson Mandela, Network effects, new economy, Nicholas Carr, nonsequential writing, Norbert Wiener, Norman Mailer, Occupy movement, packet switching, PageRank, Panopticon Jeremy Bentham, Paul Graham, peer-to-peer, peer-to-peer rental, Peter Thiel, plutocrats, Plutocrats, Potemkin village, precariat, pre–internet, RAND corporation, Ray Kurzweil, ride hailing / ride sharing, Robert Metcalfe, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, Snapchat, social web, South of Market, San Francisco, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, TaskRabbit, Ted Nelson, telemarketer, The Future of Employment, the medium is the message, the new new thing, Thomas L Friedman, Travis Kalanick, Tyler Cowen: Great Stagnation, Uber for X, uber lyft, urban planning, Vannevar Bush, Whole Earth Catalog, WikiLeaks, winner-take-all economy, working poor, Y Combinator

It would be “decentralizing, globalizing, harmonizing and empowering.”25 One of the most frequently quoted books about the Internet economy published in the wake of the August 1995 IPO was Kevin Kelly’s New Rules for the New Economy.26 Kelly’s economic manifesto, which came out as a series of articles he wrote as the founding executive editor for Wired magazine, became an appropriately magical handbook for startup entrepreneurs in the surreal dot-com era. The personally very gracious and well-meaning Kelly, one of the founders of the countercultural WELL BBS and a born-again Christian techno-mystic who would later write a book about how technology has a mind of its own,27 stoked the already irrational exuberance of the late nineties with a new economy manifesto that today reads like a parody of digital utopianism. Kelly’s mistake was to assume that the Internet’s open technology would automatically be reflected by what he, borrowing Negroponte’s messianic verbiage, called the “decentralized ownership and equity” of a “global economic culture.”28 More digital shaman than economist, Kelly presented the new economy as an uneconomy—one in which the traditional laws of supply and demand and abundance and scarcity no longer applied.

Kelly’s mistake was to assume that the Internet’s open technology would automatically be reflected by what he, borrowing Negroponte’s messianic verbiage, called the “decentralized ownership and equity” of a “global economic culture.”28 More digital shaman than economist, Kelly presented the new economy as an uneconomy—one in which the traditional laws of supply and demand and abundance and scarcity no longer applied. With rules like “Embrace the Swarm,” “Opportunities Before Efficiencies,” and “Plenitude, Not Scarcity,” Kelly’s book—part McLuhan, part Mao, part plain meshuggah—described the Internet economy as a collectivist cornucopia that would climax in what he called “a thousand points of wealth.” But not everyone embraced the swarm and learned to speak this kind of gobbledygook. In 1995, two American economists published a less hyped but much more prescient book about the depressingly old rules of our new economy. In The Winner-Take-All Society,29 Robert Frank and Philip Cook argue that the defining feature of late-twentieth-century global capitalism was a growing financial chasm between a narrow elite and the rest of society.

What Kevin Kelly incorrectly predicted as the Internet’s “decentralized ownership and equity” structure has, in fact, turned out to be a rigidly centralized economy controlled by what Fred Wilson, the New York City–based cofounder of Union Square Ventures and one of the smartest early-stage investors in the Internet economy, calls “dominant networks that are emerging all around us,” like “Google, Twitter, YouTube, SoundCloud [and] Uber.” 36 Wilson explains that “for all of its democratizing power, the Internet, in its current form, has simply replaced the old boss with a new boss and these new bosses have market power that, in time, will be vastly larger than that of the old boss.”37 The rules of this new economy are thus those of the old industrial economy—on steroids. The bigger Amazon has become, the cheaper its prices and the more reliable its services, the more invulnerable it has become to competition. “Amazon is increasingly looking like a monopoly in publishing,” Wilson explains, warning that the Internet has gone “from laughable toys to dominant monopolies in less than a decade.”38 Scale matters more than ever in the online economy, particularly in e-commerce, where the margins are extremely tight. “Opportunities before efficiencies” was one of Kevin Kelly’s new rules for the new economy. But Amazon, while certainly not averse to the strategic opportunities in the digital market, has built its economic power upon the tactical efficiencies of a company that, in 2013, booked $75 billion in sales, but a profit of just $274 million.39 In 2002, Amazon’s growing financial clout enabled it to take on United Parcel Service, wringing significant price concessions from the shipping giant, thereby giving it a major cost advantage over its rivals and, as Brad Stone notes, teaching Amazon “an enduring lesson about the power of scale and the reality of Darwinian survival in the world of big business.”40 Amazon’s financial resources allowed the notoriously parsimonious company in 2001 to even build its own, customized back-end fulfillment software, which, Stone notes, allowed it “innumerable advantages,” such as being able to promise its customers when their packages will arrive and enabling the introduction of its lucrative subscription-based Amazon Prime two-day delivery service.41 The winner-take-all economy is a euphemism for a market that tends toward monopoly—and that’s exactly what Amazon, with its tighter and tighter control of online commerce, is becoming.


pages: 416 words: 118,592

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing by Burton G. Malkiel

accounting loophole / creative accounting, Albert Einstein, asset allocation, asset-backed security, backtesting, beat the dealer, Bernie Madoff, BRICs, butter production in bangladesh, buy and hold, capital asset pricing model, compound rate of return, correlation coefficient, Credit Default Swap, Daniel Kahneman / Amos Tversky, diversification, diversified portfolio, dogs of the Dow, Edward Thorp, Elliott wave, Eugene Fama: efficient market hypothesis, experimental subject, feminist movement, financial innovation, fixed income, framing effect, hindsight bias, Home mortgage interest deduction, index fund, invisible hand, Isaac Newton, Long Term Capital Management, loss aversion, margin call, market bubble, money market fund, mortgage tax deduction, new economy, Own Your Own Home, passive investing, Paul Samuelson, pets.com, Ponzi scheme, price stability, profit maximization, publish or perish, purchasing power parity, RAND corporation, random walk, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, short selling, Silicon Valley, South Sea Bubble, stocks for the long run, survivorship bias, The Myth of the Rational Market, the rule of 72, The Wisdom of Crowds, transaction costs, Vanguard fund, zero-coupon bond

The venerable investment firm Goldman Sachs argued in mid-2000 that the cash burned by the dot-com companies was primarily an “investor sentiment” issue and not a “long-term risk” for the sector or “space,” as it was often called. A few months later, hundreds of Internet companies were bankrupt, proving that the Goldman report was inadvertently correct. The cash burn rate was not a long-term risk—it was a short-term risk. Until that moment, anyone scoffing at the potential for the “New Economy” was a hopeless Luddite. As the chart NASDAQ Composite Stock Index, July 1999–July 2002 indicates, the NASDAQ Index, an index essentially representing high-tech New Economy companies, more than tripled from late 1998 to March 2000. The price-earnings multiples of the stocks in the index that had earnings soared to over 100. NASDAQ COMPOSITE STOCK INDEX, JULY 1999–JULY 2002 A Broad-Scale High-Tech Bubble At the bubble’s height, scoffers were as hard to find as the Maytag repairman.

And if aggressive earnings targets proved hard to meet, “creative accounting” could be used so that not only the published street estimates but even the “whisper numbers” could be surpassed. One spectacular example was the rise and subsequent bankruptcy of Enron—at one time the seventh-largest corporation in America. The collapse of Enron, where over $65 billion of market value was wiped out, can be understood only in the context of the enormous bubble in the New Economy part of the stock market. Enron was seen as the perfect New Economy stock that could dominate the market not just for energy but also for broadband communications, widespread electronic trading, and commerce. Enron was a clear favorite of Wall Street analysts. Even after it began to unravel during the fall of 2001, sixteen out of seventeen security analysts covering Enron had “buy” or “strong buy” ratings on the stock. Old utility and energy companies were likened by Fortune magazine to “a bunch of old fogies and their wives shuffling around to the sounds of Guy Lombardo.”

Companies that changed their names enjoyed an increase in price during that ten-day period that was 125 percent greater than that of their peers. This price increase occurred even when the company’s core business had nothing whatsoever to do with the Net. In the market decline that followed, shares in these companies became worthless. As the following table shows, investors suffered punishing losses even in the leading Internet companies. HOW EVEN THE LEADING NEW ECONOMY STOCKS RUINED INVESTORS Stock High 2000 Low 2001–2002 Percentage Decline Amazon.com 75.25 5.51 98.7 Cisco Systems 82.00 11.04 86.5 Corning 113.33 2.80 99.0 JDS Uniphase 297.34 2.24 99.5 Lucent Technologies 74.93 1.36 98.3 Nortel Networks 143.62 .76 99.7 Priceline.com 165.00 1.80 99.4 Yahoo.com 238.00 8.02 96.4 PalmPilot, the maker of Personal Digital Assistants (PDAs), is an example of the insanity that went well beyond irrational exuberance.


pages: 435 words: 127,403

Panderer to Power by Frederick Sheehan

"Robert Solow", Asian financial crisis, asset-backed security, bank run, banking crisis, Bretton Woods, British Empire, business cycle, buy and hold, call centre, central bank independence, collateralized debt obligation, corporate governance, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, deindustrialization, diversification, financial deregulation, financial innovation, full employment, inflation targeting, interest rate swap, inventory management, Isaac Newton, John Meriwether, margin call, market bubble, McMansion, Menlo Park, money market fund, mortgage debt, Myron Scholes, new economy, Norman Mailer, Northern Rock, oil shock, Paul Samuelson, place-making, Ponzi scheme, price stability, reserve currency, rising living standards, rolodex, Ronald Reagan, Sand Hill Road, savings glut, shareholder value, Silicon Valley, Silicon Valley startup, South Sea Bubble, stocks for the long run, supply-chain management, supply-chain management software, The Great Moderation, too big to fail, transaction costs, trickle-down economics, VA Linux, Y2K, Yom Kippur War, zero-sum game

He did not speak much about money and credit. These had been the main concerns of previous Fed chairmen. The government had designed the Federal Reserve System to monitor money and credit. Greenspan rarely discussed either. 34 John Cassidy, “The Fountainhead,” New Yorker, April 24, 2000. 35Alan Greensan, “The Revolution in Information Technology,” before the Boston College Conference on the New Economy, Boston, MA, March 6, 2000. 36 Ibid. 37 Ibid. 38 Arthur Levitt, “The New Economy,” speech at The Finance Conference 2000, Boston College, Boston, March 6, 2000. 39 Gretchen Morgenson,“A Onetime Highflying Hedge Fund Appears Likely to Shut Down,” “Market Place,” New York Times, March 31, 2000. He may have enjoyed his superstar status to such a degree that he preferred to speak about a hot topic. Or, he may have avoided discussions of money if he came to realize he was illequipped to mention it.

Yet—and this is the mark of a zealot—the Federal Reserve could not forecast a recession because of the limited technology of models—all models: “There is no way to forecast when [a recession will] happen except by luck.… There are those who look back and say ‘I forecasted the recession,’ and I’m saying it was good luck because that’s what it was.”16 The late January 2001 meeting was chock-full of confessions. He finally admitted that he believed in the new era: a description he had deliberately avoided: “I think part of the answer is the new economy. We can’t explain it all [recessions] in terms of the new economy because the model reflects the history of all previous periods.”17 “All previous periods” is all a model can reflect. 14 FOMC meeting transcript, January 30–31, 2001, p. 181. 15 Ibid., pp. 174–181. On February 13, 2001, in testimony before the Senate Banking Committee, Greenspan was upbeat about “strength in capital accumulation and sustained elevated growth of structural productivity over the longer term.”18 An article in the Financial Times reported Greenspan’s testimony under the title: “Greenspan Sees a Quick Rebound.”19 Andy Grove, chairman of Intel Corporation, disagreed.

(John Pierpont), 81 Morgan Stanley, 112, 116, 233, 244, 272, 321, 347n.48 Mortgage lenders, 328 Mortgagebacked securities, 266–268, 270–272, 313 Mortgages, 22, 265–280 in 1995, 254 in 2002, 262 in 2004–2005, 293–294 40-year loans, 298 adjustable-rate, 107, 292–293, 328–329, 344 and broker leverage, 272–273 bubble in, 331 collateralized mortgage obligations (CMOs), 130 and Fannie Mae/Freddie Mac, 266–272 FHA (Federal Housing Authority), 273, 277 fixed-rate, 292 FLEX-ARM, 288 held by banks, 312 HELOCs (home equity line of credit), 298 and inflation of 1970s, 44, 63 “Liar’s loans,” 328 negative-amortization mortgages, 107 novel products, 298–299 option ARMs, 298 subprime, 296, 329–333, 340 “2 and 28,” 325 Piggyback mortgages, 298 underwriting systems for, 278–280 Wall Street participation in, 273–277 (See also Home equity loans) Moskow, Michael, 194, 196 Motorola, 207 Mozilo, Angelo, 275, 279 M3, 135 Mullins, David, 137 Mutual funds: in the 1960s, 33 of junk bonds, 80 in late 1990s, 142 and recession of early 1990s, 127 N Nasdaq: in 1995, 139 in 1997, 166 in 1998, 188, 191 in 1999, 191, 215–216 in 2000, 215–216, 219 in 2002, 284 in late 1990s, 145 technology stocks on, 216 Nasdaq 100, 177 Nasdaq Composite Index: in 1999, 188 in 2000, 224, 225, 235 in 2001, 237, 238, 246 in late 1990s, 177 National Association of Realtors, 316 National Commission on Social Security Reform, 83–84 National debt, 305 National Industrial Conference Board, 13 National policy, economists and, 361 National Public Radio, 343 NationsBank, 130 NBCi, 174 Negative-amortization mortgages, 107 Nehemiah Corporation of America, 273, 291 NetGravity, 174 Netscape, 141 New Century Financial Corporation, 165, 278–279, 328, 330 New Economics, 26–27, 39, 121, 350 New Economy, 196 New Economy conference (2000), 222 New Republic, 353 New York City, 2, 36, 352–357 1920s real estate speculation in, 352–353 1970s migration from, 51–52 and early 1990s recession, 114 as leading economic indicator, 22–23 poverty in, 78 New York Federal Reserve Bank, 66 New York Mercantile Exchange, 220 New York Stock Exchange, 19, 33 New York Post, 347 New York Times, 3, 5, 6, 19, 22, 25, 32, 33, 35, 42, 43, 48, 52, 55, 56, 59, 61, 63, 64, 65, 67, 68, 71, 73–76, 82, 83, 84, 86, 90, 92–93, 117, 118, 133, 134, 141–142, 164, 204–205, 212, 217, 221, 223, 236, 239, 245, 278, 279, 283, 294, 299–300, 327, 337–338, 340, 342, 346, 364 New York University, 11, 59 New York University School of Commerce, Accounts and Finance, 11 New Yorker, 53 New York (magazine), 342 Newsweek, 5, 57, 97 Ney, Robert, 277–278 Nikkei index, 216, 246 Nixon, Richard, 4–5, 32, 36, 41, 44 Nobel Prize in economic sciences, 26, 81, 112, 143, 183–184, 187, Nock, Albert Jay, 24 Nonbank banks, 99 O Objectivism, 3, 13–15, 27, 32 Office of Federal Housing Enterprise Oversight (OFHEO), 269 Okun, Arthur, 39, 42, 61 Old Economy, 196 O’Neal, Stanley, 333 O’Neil, C.


pages: 346 words: 97,330

Ghost Work: How to Stop Silicon Valley From Building a New Global Underclass by Mary L. Gray, Siddharth Suri

Affordable Care Act / Obamacare, Amazon Mechanical Turk, augmented reality, autonomous vehicles, barriers to entry, basic income, big-box store, bitcoin, blue-collar work, business process, business process outsourcing, call centre, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, collaborative consumption, collective bargaining, computer vision, corporate social responsibility, crowdsourcing, data is the new oil, deindustrialization, deskilling, don't be evil, Donald Trump, Elon Musk, employer provided health coverage, en.wikipedia.org, equal pay for equal work, Erik Brynjolfsson, financial independence, Frank Levy and Richard Murnane: The New Division of Labor, future of work, gig economy, glass ceiling, global supply chain, hiring and firing, ImageNet competition, industrial robot, informal economy, information asymmetry, Jeff Bezos, job automation, knowledge economy, low skilled workers, low-wage service sector, market friction, Mars Rover, natural language processing, new economy, passive income, pattern recognition, post-materialism, post-work, race to the bottom, Rana Plaza, recommendation engine, ride hailing / ride sharing, Ronald Coase, Second Machine Age, sentiment analysis, sharing economy, Shoshana Zuboff, side project, Silicon Valley, Silicon Valley startup, Skype, software as a service, speech recognition, spinning jenny, Stephen Hawking, The Future of Employment, The Nature of the Firm, transaction costs, two-sided market, union organizing, universal basic income, Vilfredo Pareto, women in the workforce, Works Progress Administration, Y Combinator

Is Your Job at Risk?,” CNN, September 15, 2017; “When the Robots Take Over, Will There Be Jobs Left for Us?,” CBS News, April 9, 2017; “More Robots, Fewer Jobs,” Bloomberg, May 8, 2017. [back] 13. Alex Ross, The Industries of the Future (New York: Simon and Schuster, 2016); Stephen A. Herzenberg, John A. Alic, and Howard Wial, New Rules for a New Economy: Employment and Opportunity in Post-Industrial America (Ithaca, NY: ILR Press, 2000); Chris Brenner, Work in the New Economy: Flexible Labor Markets in Silicon Valley, Information Age Series (Malden, MA: Wiley-Blackwell, 2002). [back] 14. Scott Hartley, The Fuzzy and the Techie: Why the Liberal Arts Will Rule the Digital World (Boston: Houghton Mifflin Harcourt, 2017). Hartley focuses on the case of AlphaGo. Both AlphaGo and AlphaGo Zero were the brainchildren of DeepMind, a London-based research lab acquired by Google in 2014.

For the next five years, we did something our respective research fields had not: we learned about the range of ghost work and the lives of people doing it by conducting one of the most comprehensive studies of its kind. Ghost Work is the first book to illuminate ghost work’s role in building artificial intelligence and the lives of workers who are invisible yet central to the functioning of the internet and the future of automation. It offers an intimate, detailed look at the experience of workers in this new economy. We focus on workers living in India and the United States, the two countries with the largest on-demand labor pools, both with a long, entwined history of technological advancement. Our team interviewed and observed hundreds of people, in their homes and other makeshift workspaces, as they did everything from flag tweets to transcribe doctors’ visits. We surveyed thousands more to establish a baseline to help us gauge which practices were typical and which were exceptional.

The companies would hire Indian workers and then disappear three weeks later, leaving unfulfilled promises of paychecks in their wake. That experience has left many young people like Lijo suspicious of online jobs that may be phishing for information or trying to fool them into working for free. Pundits both champion and criticize the flexibility in these labor markets. Champions see flexibility as the saving grace of the new economy, while critics curse flexibility as a source of downward pressure on wages in the sector. Again and again, those doing ghost work are told what an amazing perk it is that they can work anytime, anywhere.5 But more often than not, this so-called perk masks the reality of online work. The most hypervigilant workers, those always looking for the next task, are the most rewarded. In practice, on-demand requesters and the algorithms behind labor platforms automatically generate quick-turnaround deadlines for jobs, even when the work isn’t time sensitive or a worker’s availability—beyond turning an app on or off—could be added to the decision-making mix.


pages: 482 words: 121,672

A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Eleventh Edition) by Burton G. Malkiel

accounting loophole / creative accounting, Albert Einstein, asset allocation, asset-backed security, beat the dealer, Bernie Madoff, bitcoin, butter production in bangladesh, buttonwood tree, buy and hold, capital asset pricing model, compound rate of return, correlation coefficient, Credit Default Swap, Daniel Kahneman / Amos Tversky, Detroit bankruptcy, diversification, diversified portfolio, dogs of the Dow, Edward Thorp, Elliott wave, Eugene Fama: efficient market hypothesis, experimental subject, feminist movement, financial innovation, financial repression, fixed income, framing effect, George Santayana, hindsight bias, Home mortgage interest deduction, index fund, invisible hand, Isaac Newton, Long Term Capital Management, loss aversion, margin call, market bubble, money market fund, mortgage tax deduction, new economy, Own Your Own Home, passive investing, Paul Samuelson, pets.com, Ponzi scheme, price stability, profit maximization, publish or perish, purchasing power parity, RAND corporation, random walk, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, Robert Shiller, short selling, Silicon Valley, South Sea Bubble, stocks for the long run, survivorship bias, the rule of 72, The Wisdom of Crowds, transaction costs, Vanguard fund, zero-coupon bond, zero-sum game

The venerable investment firm Goldman Sachs argued in mid-2000 that the cash burned by the dot-com companies was primarily an “investor sentiment” issue and not a “long-term risk” for the sector or “space,” as it was often called. A few months later, hundreds of Internet companies were bankrupt, proving that the Goldman report was inadvertently correct. The cash burn rate was not a long-term risk—it was a short-term risk. Until that moment, anyone scoffing at the potential for the “New Economy” was a hopeless Luddite. As the chart on page 81 indicates, the NASDAQ Index, an index essentially representing high-tech New Economy companies, more than tripled from late 1998 to March 2000. The price-earnings multiples of the stocks in the index that had earnings soared to over 100. A Broad-Scale High-Tech Bubble At the bubble’s height, scoffers were hard to find. Surveys of investors in early 2000 revealed that expectations of future stock returns ranged from 15 percent per year to 25 percent or higher.

And if aggressive earnings targets proved hard to meet, “creative accounting” could be used so that not only the published street estimates but even the “whisper numbers” could be surpassed. One spectacular example was the rise and subsequent bankruptcy of Enron—at one time the seventh-largest corporation in America. The collapse of Enron, where over $65 billion of market value was wiped out, can be understood only in the context of the enormous bubble in the New Economy part of the stock market. Enron was seen as the perfect New Economy stock that could dominate the market not just for energy but also for broadband communications, widespread electronic trading, and commerce. Enron was a clear favorite of Wall Street analysts. Even after it began to unravel during the fall of 2001, sixteen out of seventeen security analysts covering Enron had “buy” or “strong buy” ratings on the stock. Old utility and energy companies were likened by Fortune magazine to “a bunch of old fogies and their wives shuffling around to the sounds of Guy Lombardo.”

., 175 money-market, see money-market funds no-load, 391, 400 open-end, 402 performance of, 65–68, 174–82, 398–400 real estate, information on, 416 risk of, 310, 398–400 “smart beta” and, 270–71, 273, 274 tax-managed index, 390–92 top-performing, choosing of, 399–400, 401 value vs. growth, 242–43, 254 vs. Standard & Poor’s 500, 179, 181 see also specific funds Nagel, Stefan, 250 NASDAQ, 80–81, 82, 109, 128, 254 National Cash Register, 48, 53 national income changes, as element in systematic risk, 224 National Student Marketing (NSM), 67–68, 69 “naughties,” 344, 411 New Economy, 241, 249 accounting fraud in, 93–95 Internet-driven, 79–97, 104–5 New Economy stocks, 172, 177 New England Patriots, 148 new investment technology, 26, 31, 189–228 alpha in, 219 beta in, see beta CAPM in, see capital-asset pricing model MPT in, see modern portfolio theory risk in, 190 new issues, 257, 318 caution with, 75 of Internet stocks, 84–87 of 1959–62, 57–59 of 1980s, 70–75 Newsweek, 57 Newton, Isaac, 47 New Yorker, 88 New York Post, 89 New York State Teachers Association, 384 New York Stock Exchange (NYSE), 56, 109, 144, 151, 397 Babson Break in, 51–52 speculation in, 48–55 New York Times, 91, 393 Nifty Fifty, 36, 68–70 NINJA loans, 101 Nobel Prize, 35, 183, 197, 209 No-Brainer Step, 379, 380–82 NO-DOC loans, 101 no-equity loans, 100 Non-Random Walk Down Wall Street, A (Lo and MacKinlay), 139 Nortel Networks, 83, 90, 161, 166 NSM, see National Student Marketing NTT Corporation, 76 nucleus theory of growth, 64 NYSE, see New York Stock Exchange odd-lot theory, 149 Odean, Terrance, 93, 234, 246, 256 O’Higgins, Michael, 150 Once in Golconda (Brooks), 49 “one-decision” stocks, 69 online brokers, Internet bubble aided by, 91–92 online investment advisers, 408 OPEC, 337 open-end funds, 402 operating expenses, 402 option premiums, 39 O’Shaughnessy, James, 150 Outlook (S&P), 393 overconfidence, 231, 232–35 overtrading, 234, 255–56 PalmPilot, 83 Paternot, Stephen, 86 P/BV ratios, see price-to-book value ratios P/E effect, 263 P/E multiples, see price-earnings multiples pension funds, 167, 182, 184, 303–4 P/E ratios, see price-earnings multiples performance, 65–68 of buy-and-hold strategy, 158 of common stocks (1970s), 340 of concept stocks, 65–68 of mutual funds, 66, 174–82, 398–400 vs. future results in mutual funds, 399, 401 Performance Systems, 68, 69 Personal Digital Assistants (PDAs), 83 Peters, Thomas J., 233 Pets.com, 84 Philadelphia 76ers, 145 Phillips, Don, 400 Phoenix, University of, 169 Pittsburgh Steelers, 148 Polaroid, 68, 69, 161 Ponzi schemes: Internet investment as, 80, 242 of Madoff, 258–59 ZZZZ Best as, 74 portfolio management, 66, 160–61, 164, 170, 174–84, 261, 349–50, 351, 361–62, 366–67, 389, 398 see also “smart beta” Portfolio Selection (Markowitz), 197 portfolio theory, see modern portfolio theory positive feedback loops, 80 Pound, John, 253 PowerShares, 270, 281 Prechter, Robert, 151–52 present value, 32, 125n price-dividend multiples, 330, 340, 341, 343 price-earnings (P/E) multiples, 57, 64, 65, 126, 264, 274, 336, 344, 346–47, 394–95 of blue-chip stocks, 68 crash in (1970s), 340 cyclically adjusted (CAPE), 347, 387 of growth stocks, 121–23, 130–33, 406 of high-tech stocks, 81 inflation of, 64 performance and, 263, 396 see also performance, of common stocks (1970s); performance, of concept stocks Priceline.com, 83 price stability, 54 price-to-book value (P/BV) ratios, of stocks, 264, 270, 274 price-volume systems, 143–44 Price Waterhouse, 153 Princeton University, 161 probability judgments, 233–34, 238 Producers, The, 166 product asset valuation, 72 professional investors: limitations of, 162–63 profit-maximizing behavior, as argument against technical analysis, 116–17 profits, 339 in inflation, 339 measurement of, 339 profit-sharing plans, 304 Prohibition, 52 property taxes, 314 prospect theory, 243–45 prospectuses, warnings on, 59 PSI Net, 90 psychological factors in stock valuation, see castle-in-the-air theory; technical analysis Puckle Machine Company, 45 Puerto Rico, 404 purchasing power, effects of inflation on, 28–29, 125n, 307, 315 Purdue University, 82 Quandt, Richard, 140 quant, defined, 221n Quinn, Jane Bryant, 91 Qwest, 166 Radio Corporation of America (RCA), 48, 53 railroad industry, 91, 96 RAND Corporation, 197 Randell, Cortes W., 66–68 random events, forecasting influenced by, 164–65, 176 random walk: defined, 26–28, 139, 140 difficult acceptance of, 145–46 fundamental conclusion of, 154 summarized, 35–36 random-walk theory, 105–6, 266–67 assumptions of, 190, 229, 230 fundamental analysis and, 182–84 guide for, 291 and housing bubble, 105–6 index funds and, 379–80 role of arbitrage in, 248–49 semi-strong form of EMH, 26, 182–84 strong (broad) form of EMH, 26, 182–84 technical analysis and, 137–41, 154–57 weak (narrow) form of EMH, 26, 140, 183 Raptor, 94 rate of return: after inflation, 338 for bonds, 194–96, 307, 315–21, 342–43, 344, 345 in CAPM, 213–19 for common stocks, 194–96, 307 compounded, 351 diversification and, 198–200 expected, see expected rate of return future events and, 30, 343–48 high, for bearing greater risk, 194–96, 212–13, 350, 408 investment objectives and, 306–13 negative, 196 for real estate, 313 rebalancing to, 360 risk-free, 215–18 “small caps” vs.


pages: 173 words: 53,564

Fair Shot: Rethinking Inequality and How We Earn by Chris Hughes

"side hustle", basic income, Donald Trump, effective altruism, Elon Musk, end world poverty, full employment, future of journalism, gig economy, high net worth, income inequality, invisible hand, Jeff Bezos, job automation, knowledge economy, labor-force participation, Lyft, M-Pesa, Mark Zuckerberg, meta analysis, meta-analysis, new economy, oil rush, payday loans, Peter Singer: altruism, Potemkin village, precariat, randomized controlled trial, ride hailing / ride sharing, Ronald Reagan, Second Machine Age, self-driving car, side project, Silicon Valley, TaskRabbit, The Bell Curve by Richard Herrnstein and Charles Murray, traveling salesman, trickle-down economics, uber lyft, universal basic income, winner-take-all economy, working poor, working-age population, zero-sum game

A single family, the Waltons, all of whom inherited their wealth from the Walmart empire, now controls as much wealth as the bottom 43 percent of the country combined—137 million Americans. Just the top 0.1 percent of our population—the 160,000 or so families who have $20 million or more—control the same amount as the entire bottom 90 percent of Americans combined. The chasm between the rich and the poor has not been so wide since 1929, the year of the biggest collapse in Wall Street’s history. The problem isn’t that our new economy has fueled the rise of Facebook and mega-winners. It’s that the growth of the ultra-wealthy has come at the expense of everyday Americans. Rapid technological advances, globalization, and financialization are pulling the rug out from under the middle class and lower-income Americans. The same forces that enabled the rise of Facebook, Google, and Amazon have undermined the stability and economic opportunity that most Americans have a right to expect.

The blue collar jobs of yesteryear that paid decent salaries and provided benefits have declined from about half of overall jobs 60 years ago to around 20 percent today. A Princeton study found that of all the jobs created between 2005 and 2015, 94 percent of them were contract or temporary, meaning virtually every job we created in the last decade was piecemeal and the income was unreliable. Many of these jobs of the new economy pay poorly, require flexible schedules, and do not offer the stability of benefits or guaranteed pay. People in these jobs are Starbucks and Walmart employees who barely get 20 hours of work a week, babysitters and dog walkers, consultants and delivery people. Some of these workers may get to choose when they work, but they are more often beholden to when the market is ready to employ their services.

The debate about artificial intelligence is in large part irrelevant to why we need a guaranteed income today: we are already experiencing one of the most significant economic dislocations in modern history. We don’t need to predict the future to know that we need to respond to the problems of the economy of the present. Regardless of how artificial intelligence evolves, a guaranteed income is the best tool to provide financial stability and opportunity to people who already need it. To understand how our new economy, defined by technological advances and globalization, affects the bottom lines of working people, two researchers, Rachel Schneider and James Morduch, set out to monitor the day-to-day financial behavior of 235 low- and middle-income families over the course of a year. They tracked all money in, all money out, what they spent it on, and why. They combined that data set with anonymized statements from Chase bank accounts to create an even larger sample.


pages: 382 words: 92,138

The Entrepreneurial State: Debunking Public vs. Private Sector Myths by Mariana Mazzucato

"Robert Solow", Apple II, banking crisis, barriers to entry, Bretton Woods, business cycle, California gold rush, call centre, carbon footprint, Carmen Reinhart, cleantech, computer age, creative destruction, credit crunch, David Ricardo: comparative advantage, demand response, deskilling, endogenous growth, energy security, energy transition, eurozone crisis, everywhere but in the productivity statistics, Financial Instability Hypothesis, full employment, G4S, Growth in a Time of Debt, Hyman Minsky, incomplete markets, information retrieval, intangible asset, invisible hand, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, knowledge worker, natural language processing, new economy, offshore financial centre, Philip Mirowski, popular electronics, profit maximization, Ralph Nader, renewable energy credits, rent-seeking, ride hailing / ride sharing, risk tolerance, shareholder value, Silicon Valley, Silicon Valley ideology, smart grid, Steve Jobs, Steve Wozniak, The Wealth of Nations by Adam Smith, Tim Cook: Apple, too big to fail, total factor productivity, trickle-down economics, Washington Consensus, William Shockley: the traitorous eight

And the point is that Apple understood this game: creatively pioneering the field of consumer electronic dreams by stepping up to the plate and playing off the positive externalities left behind by the government’s heavy hitters. But, today, it is companies like Apple who continue to ride the wave of success, keeping track on only one side of the scoreboard and rigging the end result to their advantage. Apple’s job-creation myth: Not all jobs are created equally Apple is not only a ‘new economy’ company in the sense of the type of technology and knowledge that it makes intense use of, but also in terms of its strategy with the labour market. In this respect, it is useful to first consider the difference between the New Economy Business Model (NEBM) and the Old Economy Business Model (OEBM), emphasized by Lazonick (2009). The latter dominated the US corporate environment from the immediate post–Second World War era until the 1980s, and was characterized by stable employment opportunities in hierarchical corporations, generous and equitable earnings, subsidized medical coverage and substantial defined-benefit pension schemes upon retirement (Lazonick 2009, 2).

Patrick 97 Medical Research Council (MRC) 20, 67 Merrick, Sarah 125 meso perspective 36 micro–macro connection 31–2 microprocessors 109 Ministry for Research and Technology (Germany) 149 Ministry of International Trade and Industry (MITI) 37–8, 40; see also Japan Minsky, Hyman 32n3 Minuteman II missile programme 98 Miranda, Javier 45 Mirowski, Philip 49 MIT 24, 178, 178n6 Mitterrand, François 57 Motoyama, Yasuyuki 83–4, 85 Mowery, David C. 61–2 multi-touch screens 102 myths: about business investment requirements 53–5; about entrepreneurship and innovation 22; about innovation and growth 10; of Europe’s problem being commercialization 48, 52–3; government captured by 19; of innovation being about R&D 44, 159–60; of knowledge economy and patents 50–52; of market as self-regulating 30, 195; of small is beautiful 45–7, 142, 160–61; of venture capital as risk loving 47–50, 142 Nanda, Ramana 127 NASDAQ 50 National Academy of Sciences (NAS) (US) 176 National Aeronautics and Space Agency (NASA) (US) 98, 145, 150 National Endowment for Science, Technology and the Arts (NESTA) (UK) 45 National Fabricated Products 150n4 National Institute of Standards and Technology (NIST) (US) 107, 108 National Institutes of Health (NIH) (US): applied research by 136; budgets of 1938–2011 69, 70; creating the wave vs. surfing it 68–71; knowledge base funded by 8; NMEs based on research of 66; spending 25; Taxol royalties 188 ‘national market’ 195 National Nanotechnology Initiative (NNI) (US) 84–6 National Organization for Rare Disorders 82 National Renewable Energy Laboratory (NREL) 151 National Science Foundation (US) 20, 84, 85, 104, 108, 166 National Systems of Innovation perspective 42 NAVSTAR GPS system 105, 109 Nelson, Richard 193 neoclassical economics 33, 186 Netherlands 51, 54 networks: DARPA’s development of 77, 83; innovation 36, 40, 74; linkages of 39; in nontechnologies 83–4; SBIR building of 79, 83; science—industry links 193 New Deal 74 New Economy Business Model (NEBM) 168–9, 172, 177; see also Old Economy Business Model (OEBM) ‘new growth’ theory 34–6, 44, 59–60 new investment in renewable energy 120, 121 Nielsen, Kristian H. 145 Nokia 190 ‘No More Solyndra’s Act’ 130–31n12 Norway 120n4, 121 Novartis 81 Noyce, Robert 98 OECD, GERD (gross domestic expenditure on R&D) as a percentage of GDP in 43 Office of Science and Technology Policy (OSTP) (US) 109 oil company role in solar power 161n8 Old Economy Business Model (OEBM) 168–9, 177; see also New Economy Business Model (NEBM) Organisation for Economic Cooperation and Development (OECD) 18 organizational change 197 Orphan Drug Act (ODA) of 1983 81–2 Osborne, George 51 outsourcing 16, 108 Pacific Solar 152 Parker, Rachel 83–5 Parris, Stuart 44 patents: First Solar’s 151; focus on venture capital and 49; GE’s lead in 148; in knowledge economy 10; myth of knowledge economy and 50–52; ‘patent box’ policy 51–2; pharmaceutical 66; potential government retention of 189; success of as measure of innovation performance 34, 41 Perez, Carlota 117 Perkins, Thomas 57 Pfizer 8, 26, 69, 82 pharmaceutical companies (‘pharma’): funding development of 10, 17, 24; growth from R&D in 44; radical vs.

Highlighting the active role that the State has played in the ‘hotbeds’ of innovation and entrepreneurship – like Silicon Valley – was the key to showing that the State can not only facilitate the knowledge economy, but actively create it with a bold vision and targeted investment. This expanded version of the DEMOS report (more than double its size) builds on that initial research and pushes it harder, drawing out further implications at the firm and sectoral level. Chapter 5, dedicated entirely to Apple, looks at the whole span of State support that this leading ‘new economy’ company has received. After looking at the role of the State in making the most courageous investments behind the Internet and IT revolution, Chapters 6 and 7 look at the next big thing: ‘green’ technology. Unsurprisingly we find that across the globe the countries leading in the green revolution (solar and wind energy are the paradigmatic examples explored) are those where the State is playing an active role beyond that which is typically attributed to market failure theory.


pages: 159 words: 45,073

GDP: A Brief but Affectionate History by Diane Coyle

"Robert Solow", Asian financial crisis, Berlin Wall, big-box store, Bretton Woods, BRICs, business cycle, clean water, computer age, conceptual framework, crowdsourcing, Diane Coyle, double entry bookkeeping, en.wikipedia.org, endogenous growth, Erik Brynjolfsson, Fall of the Berlin Wall, falling living standards, financial intermediation, global supply chain, happiness index / gross national happiness, hedonic treadmill, income inequality, income per capita, informal economy, Johannes Kepler, John von Neumann, Kevin Kelly, Long Term Capital Management, mutually assured destruction, Nathan Meyer Rothschild: antibiotics, new economy, Occupy movement, purchasing power parity, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, The Wealth of Nations by Adam Smith, Thorstein Veblen, University of East Anglia, working-age population

“This is for everyone,” as he put it.3 The Web started to get ordinary users online in the mid-1990s, and twenty years later being online is almost ubiquitous in developed countries and spreading rapidly in developing countries. This latter trend is thanks in large part to mobile telephones and smartphones. Because separately, telecommunications technology has been revolutionized by a sequence of innovations such as fiber-optic cables, and in particular mobile telephony and other wireless communications. This epoch of the information and communications revolution has spanned forty years. THE NEW ECONOMY BOOM It was obvious by the mid-1980s that a lot of businesses were buying and using computers, but what effect this was having on the economy was not at all apparent. Robert Solow wrote a frequently quoted New York Times Book Review article in 1987 claiming, “You can see the computer age everywhere but the productivity statistics.”4 In fact, it took the convergence of a number of separate streams of technological innovation, plus the investment in new computer and communications equipment, plus the reorganization of businesses to use these new tools, before any benefit in terms of productivity or GDP could occur.

The average growth of productivity in the United States climbed from an annual average of 1.38 percent in 1972–1996 to 2.46 percent in 1996–2004.7 Estimates for the potential U.S. growth rate rose dramatically from less than 2 percent a year to more than 3 percent a year according to the most optimistic views. In case this change sounds small, remember the power of compound arithmetic, this time operating favorably: at 2 percent a year, GDP will double after thirty-five years; at 3 percent a year after only twenty-four years. The new technologies were shaping up to outdo the Golden Age of the immediate postwar years if this continued. Suddenly, everyone was talking about the New Economy or the New Paradigm. The new technologies seemed to have made possible a lasting increase in the productivity of the economy. Prominent among the enthusiasts was Alan Greenspan, then the long-serving chairman of the Federal Reserve Board. His judgment about the economy’s potential growth rate was crucial because it was his job to use interest rates and monetary policy to choke off growth in demand that would prove inflationary.

In his memoir The Age of Turbulence, Greenspan describes his first discussion in 1995 with his Fed colleagues of the possibility of a “paradigm change” in the economy: “I’ve been looking at business cycles since the late 1940s. There has been nothing like this,” he told them. “The depth and persistence of such technological changes appear only once every fifty or one hundred years.”8 He was right—and then he was wrong. From today’s side of the financial crisis, the New Economy hype looks almost delusional. In the United States and elsewhere, GDP has been growing slowly, if at all, for five years (as I write this) and the rate of growth of productivity has slowed correspondingly. For a decade from the mid-nineties to the mid-noughties, though, all the evidence was stacking up in favor of a lasting change for the better in the economy, even looking at the published statistics for GDP.


pages: 362 words: 83,464

The New Class Conflict by Joel Kotkin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, American Society of Civil Engineers: Report Card, Bob Noyce, California gold rush, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, creative destruction, crony capitalism, David Graeber, deindustrialization, don't be evil, Downton Abbey, Edward Glaeser, Elon Musk, energy security, falling living standards, future of work, Gini coefficient, Google bus, housing crisis, income inequality, informal economy, Internet of things, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John von Neumann, Joseph Schumpeter, Kevin Kelly, labor-force participation, low-wage service sector, Marc Andreessen, Mark Zuckerberg, mass affluent, McJob, McMansion, medical bankruptcy, Nate Silver, New Economic Geography, new economy, New Urbanism, obamacare, offshore financial centre, Paul Buchheit, payday loans, Peter Calthorpe, plutocrats, Plutocrats, post-industrial society, RAND corporation, Ray Kurzweil, rent control, rent-seeking, Report Card for America’s Infrastructure, Richard Florida, Silicon Valley, Silicon Valley ideology, Steve Jobs, technoutopianism, The Death and Life of Great American Cities, Thomas L Friedman, too big to fail, transcontinental railway, trickle-down economics, Tyler Cowen: Great Stagnation, upwardly mobile, urban planning, urban sprawl, War on Poverty, women in the workforce, working poor, young professional

Associated Press, “Despite Fiscal Cliff Deal, Taxes to Rise for Most Americans,” New York Daily News, January 2, 2013. 14. Lex Haris, “The Super Rich Are Mad as Hell—and Doing Great,” CNN Money, January 28, 2014, http://money.cnn.com/2014/01/28/news/economy/super-rich-attack. 15. Nick Sorrentino, “Obama Tilts Playing Field to One Percent,” Detroit News, October 1, 2013. 16. Tyler Durden [pseud.], “David Stockman Explains the Keynesian State-Wreck Ahead—Sundown In America,” Zero Hedge (blog), October 5, 2013, http://www.zerohedge.com/news/2013-10-05/david-stockman-explains-keynesian-state-wreck-ahead-sundown-america; Hibah Yousuf, “Obama Admits 95% of Income Gains Gone to Top 1%,” CNN Money, September 15, 2013, http://money.cnn.com/2013/09/15/news/economy/income-inequality-obama; Alexander Eichler, “Consumption Inequality Keeping Up With Rising Income Inequality: Study,” Huffington Post, April 10, 2012, http://www.huffingtonpost.com/2012/04/10/consumption-inequality-income_n_1413454.html; Alexander Eichler, “Income Inequality Worse under Obama than George W.

And after a slowdown in the recession, migration also began to increase in the suburbs by 2013, a process likely to accelerate as millennials reach child-bearing age. 78. Lanier, Who Owns the Future?, p. 14; Tom Hamburger and Matea Gold, “Google, Once Disdainful of Lobbying, Now a Master of Washington Influence,” Washington Post, April 12, 2014; Castells, The Information Age, p. 300. 79. Jigar Shah, “Social Media Won’t Drive a New Economy,” Stanford Social Innovation Review (blog), August 30, 2012, http://www.ssireview.org/blog/entry/social_media_wont_drive_a_new_economy. 80. Lanier, Who Owns the Future?, 8-13. 81. Polanyi, The Great Transformation, p. 249. 82. Lanier, Who Owns the Future?, pp. 8–13; David Graeber, “Of Flying Cars and the Declining Rate of Profit,” Baffler, no. 19 (March 2012): 66–84; Nick Wingfield, “Worries That Microsoft Is Growing Too Tricky to Manage,” New York Times, September 9, 2013. 83.

By Census estimates the percentage of young adults living at home has more than doubled to over 20 percent, and by 2020, according to some projections, it will increase even more.55 A Generation of Serfs Not surprisingly, the millennial generation also has the lowest percentage of homeowners of any generation in recent American history. Since 1970, according to the Census, the percentage of households under 34 who own their home has dropped from 41 to 32 percent, with most of the drop coming after 2007.56 Some “new economy” theorists insist that detaching the young from property ownership will lead to a more flexible and buoyant economy, allowing these young workers a greater degree of personal flexibility and geographic mobility.57 In the so-called “creative age,” homeownership is regarded as “overrated” and the proper aspiration is to live in a dense, expensive city, such as San Francisco or Manhattan, where only a fraction of the population can conceivably own their place of residence.58 This marks a significant shift from previous generations.


pages: 506 words: 146,607

Confessions of a Wall Street Analyst: A True Story of Inside Information and Corruption in the Stock Market by Daniel Reingold, Jennifer Reingold

barriers to entry, Berlin Wall, corporate governance, estate planning, Fall of the Berlin Wall, fixed income, George Gilder, high net worth, informal economy, margin call, mass immigration, new economy, pets.com, Robert Metcalfe, rolodex, Saturday Night Live, shareholder value, short selling, Silicon Valley, stem cell, Telecommunications Act of 1996, thinkpad, traveling salesman, undersea cable

Sol Trujillo, a friendly but intense career US West employee who had worked his way up to the top, clearly saw this deal as a way to transform his conservative, slow-growing, dividend-paying telecom company into a high-growth new-economy outfit. He had been enamored with the buzz—and stock prices—these new-economy companies were fetching ever since he had attended the Vortex Conference at Laguna Niguel a year earlier. But neither Global Crossing’s nor US West’s shareholders were enthusiastic about the deal. The conservative US West holders saw it as radical and risky, while Global Crossing’s holders, new-economy-Kool-Aid drinkers, saw it as a waste of money on old, tired assets. Global’s shares, which had hit an all-time record of $64 a share by May 13, fell 30 percent in three weeks, closing at $45.75 on June 2.

After a three-week road show—the traveling circus in which Qwest’s top executives traveled around the world, visiting institutional investors in 10 cities in the U.S. and five in Europe, to try to sell the stock—it went public on June 24, 1997, at $22. Jack’s $2.2 billion and our $1.8 billion estimates looked laughable after the first day of trading, when the stock closed at $28, valuing the company at an unbelievable $2.8 billion. We had all dramatically underestimated some things that didn’t figure in to our models at all: the market’s appetite for new economy telecom startups and the degree to which an association with the Internet—a big part of Qwest’s road show—would propel valuations. Yet Jack, even though he had blown up his numbers with an air pump, was still closer to reality than I was. It killed me. Ultimately, Qwest would peak at $66, three years later. It didn’t matter how meticulous our research was in an environment like this, I realized.

The conference was chock-a-block with new companies trying to get funded, existing companies touting their technology, and, of course, bankers, analysts, and investors. The speakers included John Chambers, CEO of Cisco Systems, Internet guru George Gilder, and others. Frank Quattrone, tech banker extraordinaire, was there, mobbed by startups looking for funding or merger partners. Sol Trujillo, CEO of US West, was there, trying desperately to gain some credibility as he tried to transform his company, and himself, from a boring old Baby Bell into a “new-economy” superstar. And Jim Crowe, my flat-topped buddy from MFS, was there, spreading the Internet word again, but this time on behalf of his new company, Level 3 Communications. One afternoon as we sipped cocktails by the Ritz’s pool overlooking the Pacific Ocean, Jim explained to me that Level 3 was going to provide the tubes through which the information economy would flow. It would run a national long distance network that would carry only data, not voice.


pages: 193 words: 98,671

The Inmates Are Running the Asylum by Alan Cooper

Albert Einstein, business cycle, delayed gratification, Donald Trump, Howard Rheingold, informal economy, iterative process, Jeff Bezos, lateral thinking, Menlo Park, natural language processing, new economy, pets.com, Robert X Cringely, Silicon Valley, Silicon Valley startup, skunkworks, Steve Jobs, Steven Pinker, telemarketer, urban planning

During the last few years of the twentieth century, as the dot-com bubble inflated, truckloads of ink were used to sell the idea that there was a "new economy" on the Internet. The pundits said that selling things on the World Wide Web, where stores were made of clicks instead of bricks, was a fundamentally different way of doing business, and that the "old economy" was as good as dead. Of course, almost all of those new-economy companies are dead and gone, the venture capitalists who backed them are in shock, and the pundits who pitched the new economy have now recanted, claiming it was all a hopeless dream. The new, new thinking says we must still be in the old, old economy. Actually, I believe that we really are in a new economy. What's more, I think that the dot-coms never even participated in it. Instead, the dot-coms were the last gasp of the old economy: the economy of manufacturing.

Unfortunately, they have yet to address the new realities of the information age, in which products are no longer made from atoms but are mostly software, made only from the arrangements of bits. And bits don't follow the same economic rules that atoms do. Some fundamental truths hold for both the old and the new economies. The goal of all business is to make a sustainable profit, and there is only one legal way to do so: Sell some goods or services for more money than it costs you to make or acquire them. It follows that there are two ways to increase your profitability: Either reduce your costs or increase your revenues. In the old economy, reducing your costs worked best. In the new economy, increasing your revenue works much, much better. Today's most vital and expensive products are made largely or completely of software. They consume no raw materials. They have no manufacturing cost. They have no transportation cost.

When Pets.com sold dog food over the Internet, it didn't offer better dog food, and it didn't offer a customer experience better than you could get at the local brick-and-mortar pet store; it didn't offer any better information, intelligence, or confidence. All it offered was cheaper shipping, stocking, and selling— variable costs all—for Pets.com. It was a classic industrial-age-economy tactic of cost reduction that ignored the fundamental principles of the new economy. Far from being the first breath of a new economy, it was the last gasp of the old. I am absolutely convinced that you can sell anything on the Internet profitably and successfully. The trick is that your online store must offer a measurably greater degree of shopper satisfaction than any competing retail medium, and price is only one small component of satisfaction. There is only one way to accomplish this: You must architect your system to deliver the highest possible end-user satisfaction.


pages: 278 words: 74,880

A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Carbon Emissions by Muhammad Yunus

active measures, Bernie Sanders, Capital in the Twenty-First Century by Thomas Piketty, clean water, conceptual framework, crony capitalism, distributed generation, Donald Trump, financial independence, fixed income, full employment, high net worth, income inequality, Indoor air pollution, Internet of things, invisible hand, Jeff Bezos, job automation, Lean Startup, Mark Zuckerberg, megacity, microcredit, new economy, Occupy movement, profit maximization, Silicon Valley, the market place, The Wealth of Nations by Adam Smith, too big to fail, unbanked and underbanked, underbanked, urban sprawl, young professional

Uganda is one of seven countries of the world in which Yunus Social Business (YSB) now operates. YSB is a nonprofit organization dedicated to spreading the concept of social business, training and supporting pioneers who are interested in launching social businesses, and working with corporations and business leaders who want to create companies or divisions dedicated to social business. By helping to grow the new economy sector in the countries where it operates, YSB is promoting the emergence of self-sustaining companies that are forging solutions to problems like poverty, unemployment, and environmental degradation. Thus, it is helping to create the new economic structure we badly need to supplement the incomplete structure of traditional capitalism. For a simple but powerful example of how it works, consider one of the social businesses that YSB has helped to develop—a company called Golden Bees, headquartered in Kampala, the capital city of Uganda.

Similar initiatives are now taking shape in Japan and Australia. Action Tanks do not have to be limited to rich countries or big countries. They can be created in poor countries and small countries as well, involving local and multinational companies that operate there. Eventually, we should be able to use the lessons from these countries to help us design Social Business Action Tanks for many other cities in every region of the world. THE NEW ECONOMY AND THE GOAL OF ZERO POVERTY AS THESE EXAMPLES SUGGEST, THE economic transformation that social business is helping to jump-start gives humankind for the first time the opportunity to create a world without poverty. I am energized by the conviction that poverty is not created by poor people. Poverty is an artificial imposition on people who are endowed with the same unlimited potential for creativity and energy of any human being in any station of life, anywhere in the world.

This gives me hope that a method to fix unemployment that works in one place can eventually work everywhere. Now that GAI has been established on a firm foothold, the next natural step will be to develop a Nobin program to invest in businesses launched by low-income American youth. We’re making plans for such a program, and I hope we will be able to launch it soon. ENTREPRENEURSHIP, THE NEW ECONOMY, AND THE GOAL OF ZERO UNEMPLOYMENT FOR MANY READERS, THE STORY I’ve told in this chapter probably seems paradoxical. Many people, including many economists, consider the United States the most dynamic and innovative capitalist nation in history—and therefore the model of an entrepreneurial economy. Yet this stronghold of free-market dynamism has long been plagued by the seemingly insurmountable problem of unemployment, which condemns millions of people to idleness.


pages: 278 words: 82,069

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Asian financial crisis, banking crisis, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, John Meriwether, kremlinology, Long Term Capital Management, margin call, market bubble, market fundamentalism, McMansion, money market fund, mortgage debt, Naomi Klein, new economy, offshore financial centre, payday loans, pets.com, plutocrats, Plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Robert Shiller, Ronald Reagan, savings glut, sovereign wealth fund, structural adjustment programs, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

It is this intellectual unanimity about the nature and the pur pose of economies, as much as the technological advances of recent years, that we refer to when we talk so triumphantly about the “New Economy.” It is this nearly airtight consensus—this assurance that no matter what happens or who wins in November, a strong labor movement and an interventionist government will not be returning—that has made possible the unprecedented upward transfer of wealth that we saw in the Clinton years, that has permitted the bull market without end, and that has made the world so safe for billionaires. This is not to say that in the nineties Americans simply decided they wanted nothing so much as to toil for peanuts on an assembly line somewhere, that they loved plutocracy and that robber barons rocked after all. On the contrary: At the center of the “New Economy” consensus was a vision of economic democracy as extreme and as militant-sounding as anything to emanate from the CIO in the thirties.

Businessmen and pro-business politicians have always protested the use of “class war” by their critics on the left; during the nineties, though, they happily used the tactic themselves, depicting the workings of the market as a kind of permanent social revolution in which daring entrepreneurs are endlessly toppling fat cats and picking off millions of lazy rich kids. Wherever the earthshaking logic of the “New Economy” touched down, old money was believed to quake and falter. The scions of ancient banking families were said to be finding their smug selves wiped out by the streetwise know-how of some kid with a goatee; the arrogant stockbrokers of old were being humiliated by the e-trade masses; the WASPs with their regimental ties were getting their asses kicked by the women, the Asians, the Africans, the Hispanics; the buttoned-down whip-cracking bosses were being fired by the corporate “change agents”; the self-assured network figures were being reduced to tears by the Vox Populi of the web.

And when Al Gore began annoying the men of privilege with his recent attacks on big business, the paper responded in the most direct manner imaginable. “Mr. Bush should tell Americans,” online Journal executive James Taranto opined in an Op-Ed late last summer, “when my opponent attacks ‘big corporations,’ he’s attacking you and me.” Market populism can seem quite absurd at times. We are, after all, living through one of the least populist economic eras in the past hundred years. The “New Economy” has exalted the rich and forgotten about the rest with a decisiveness that we haven’t seen since the twenties. Its greatest achievement—the booming stock market of recent years—has been based in no small part on companies’ enhanced abilities to keep wages low even while CEO compensation soars to record levels. Market populism is, in many ways, the most blatant apologia for economic inequality since social Darwinism.


pages: 322 words: 84,580

The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All by Martin Sandbu

"Robert Solow", Airbnb, autonomous vehicles, balance sheet recession, bank run, banking crisis, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, capital controls, carbon footprint, Carmen Reinhart, centre right, collective bargaining, debt deflation, deindustrialization, deskilling, Diane Coyle, Donald Trump, Edward Glaeser, eurozone crisis, Fall of the Berlin Wall, financial intermediation, full employment, future of work, gig economy, Gini coefficient, hiring and firing, income inequality, income per capita, industrial robot, intangible asset, job automation, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, labour market flexibility, liquidity trap, longitudinal study, low skilled workers, manufacturing employment, Martin Wolf, meta analysis, meta-analysis, mini-job, mortgage debt, new economy, offshore financial centre, oil shock, open economy, pattern recognition, pink-collar, precariat, quantitative easing, race to the bottom, Richard Florida, Robert Shiller, Robert Shiller, Ronald Reagan, secular stagnation, social intelligence, TaskRabbit, total factor productivity, universal basic income, very high income, winner-take-all economy, working poor

Since the 1970s, the West has gone through a transformation just as deep as that earlier shift from agriculture to industry, with the source of economic value moving from manufacturing to services. In the old industrial economy, people built physical things. But we no longer need many workers to fulfil our needs for physical products, just as we no longer need many people to grow enough food to feed us. Instead, the new economy puts people to work most productively by using their knowledge to produce immaterial goods and services, to produce physical goods more efficiently, or to invent new ways of doing things—a software algorithm or a fashion design, an entertainment show or a piece of art, an academic research project or a business analysis, a set of corporate accounts or a transport logistics plan. But when a society switches to new, more productive ways of doing things, and entirely new activities emerge that require new skills and abilities, the old ways are abandoned.

(It is worth noting that those railing against the Western order show curiously little concern for a female-dominated industrial sector such as textile production, which has a much stronger case for having suffered from globalisation.)20 The inexorable logic of economic change and technology-driven productivity means that soft skills are increasingly rewarded, and traditionally “manly” skills no longer attract much pay in the job market. That may well be a psychological burden on those wedded to traditional gender stereotypes, but attempting to restore the stereotype will not help men thrive in the new economy. What will help is a cultural transformation to make men increasingly comfortable doing what used to be seen as women’s work.21 That transformation is at least as profound as the one the other way round—letting women in where they were previously excluded—and takes an effort that is political and legal as well as psychological and cultural. For societies to navigate these changes successfully—the Nordics were early pioneers but have challenges of their own22—job roles must adapt not in isolation but in parallel with changing cultural expectations of gender roles in the home, and with the evolving politics and law needed to adapt the labour market to these changes.

One US study calculated that an additional $1.00 spent by the government on a higher in-work tax credit would increase workers’ average after-tax incomes by only $0.73 cents because wages would fall (with some workers ending up with overall less income than before). In contrast, an additional $1.00 spent to fund a negative income tax would increase after-tax income by a full $1.39 because wages would also rise.10 The other important effect of introducing a certain, regular payment for all is to make it much easier to shift between jobs. This, as the previous chapter made clear, is an essential part of the new economy, and those countries which have best adapted their economies of belonging to technological change have the highest frequency of job changes. A UBI/NIT removes one important reason why those in the lowest income groups may not move jobs: the risk of running out of money in between stints of employment. It allows people to take the time needed to search for better work, or to seek training to improve their skills and job opportunities.


pages: 741 words: 179,454

Extreme Money: Masters of the Universe and the Cult of Risk by Satyajit Das

affirmative action, Albert Einstein, algorithmic trading, Andy Kessler, Asian financial crisis, asset allocation, asset-backed security, bank run, banking crisis, banks create money, Basel III, Benoit Mandelbrot, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, Bonfire of the Vanities, bonus culture, Bretton Woods, BRICs, British Empire, business cycle, capital asset pricing model, Carmen Reinhart, carried interest, Celtic Tiger, clean water, cognitive dissonance, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate raider, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, Daniel Kahneman / Amos Tversky, debt deflation, Deng Xiaoping, deskilling, discrete time, diversification, diversified portfolio, Doomsday Clock, Edward Thorp, Emanuel Derman, en.wikipedia.org, Eugene Fama: efficient market hypothesis, eurozone crisis, Everybody Ought to Be Rich, Fall of the Berlin Wall, financial independence, financial innovation, financial thriller, fixed income, full employment, global reserve currency, Goldman Sachs: Vampire Squid, Gordon Gekko, greed is good, happiness index / gross national happiness, haute cuisine, high net worth, Hyman Minsky, index fund, information asymmetry, interest rate swap, invention of the wheel, invisible hand, Isaac Newton, job automation, Johann Wolfgang von Goethe, John Meriwether, joint-stock company, Jones Act, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kevin Kelly, laissez-faire capitalism, load shedding, locking in a profit, Long Term Capital Management, Louis Bachelier, margin call, market bubble, market fundamentalism, Marshall McLuhan, Martin Wolf, mega-rich, merger arbitrage, Mikhail Gorbachev, Milgram experiment, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, mortgage tax deduction, mutually assured destruction, Myron Scholes, Naomi Klein, negative equity, NetJets, Network effects, new economy, Nick Leeson, Nixon shock, Northern Rock, nuclear winter, oil shock, Own Your Own Home, Paul Samuelson, pets.com, Philip Mirowski, plutocrats, Plutocrats, Ponzi scheme, price anchoring, price stability, profit maximization, quantitative easing, quantitative trading / quantitative finance, Ralph Nader, RAND corporation, random walk, Ray Kurzweil, regulatory arbitrage, rent control, rent-seeking, reserve currency, Richard Feynman, Richard Thaler, Right to Buy, risk-adjusted returns, risk/return, road to serfdom, Robert Shiller, Robert Shiller, Rod Stewart played at Stephen Schwarzman birthday party, rolodex, Ronald Reagan, Ronald Reagan: Tear down this wall, Satyajit Das, savings glut, shareholder value, Sharpe ratio, short selling, Silicon Valley, six sigma, Slavoj Žižek, South Sea Bubble, special economic zone, statistical model, Stephen Hawking, Steve Jobs, survivorship bias, The Chicago School, The Great Moderation, the market place, the medium is the message, The Myth of the Rational Market, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, trickle-down economics, Turing test, Upton Sinclair, value at risk, Yogi Berra, zero-coupon bond, zero-sum game

Rather than making things, trained engineers joined banks to provide turbo-charged financial structures for companies. Until its spectacular implosion, Enron epitomized the new economy. Under Kenneth “Kenny Boy” Lay and Jeffrey Skilling, the merged Omaha-based InterNorth and Houston Natural Gas evolved from a natural gas producer and pipeline company into a trading company. Enteron, the original selected name of the merged firm, meant “intestine” in Greek and was hastily changed. Enron had “no meaning other than what we make it mean.”8 Enron’s center of gravity was its main trading floor in Houston, not its pipelines or natural gas operations. There was the old economy business—generating and distributing energy. Then there was the new economy business—trading energy and ultimately everything. Enron shifted from the low return and regulated business of managing physical assets to the higher return unregulated business of trading.

By 2008 $4–5 of debt was required to create $1 of growth, up from $1–2 needed 20 years earlier. In the frenzy of low interest rates and rising asset prices, collateral cover and ability to service the loans deteriorated, increasing debt levels to unsustainable levels. A perpetual motion machine indefinitely produces more energy than it consumes. The new economy was a perpetual growth machine, producing high rates of growth using debt. Perpetual motion is a Gedanken—thought experiment—designed to test a hypothesis. The new economy ultimately proved impossible to sustain. Sigmund Freud remarked that: Illusions commend themselves to us because they save us pain and allow us to enjoy pleasure instead. We must therefore accept it without complaint when they sometimes collide with a bit of reality against which they are dashed to pieces.10 The financial crisis was the reality on which the fake pleasure of the Great Moderation and the Goldilocks Economy was smashed.

It targeted new super-rich billionaires created by the oil and minerals boom of recent years in commodity-rich Kazakhstan. Kazkommertsbank, the second largest bank in Kazakhstan, planned to issue 1,000 cards, at a rate of about 30 a month, to VIP customers. Each card had an annual fee of $1,000 and a credit limit of $50,000, more than twice the limit on MasterCard platinum cards. The instant gratification provided by readily accessible money replaced restraint and deferred consumption. In the new economy, there were three kinds of people: the haves, the have-nots, and the have-not-paid-for-what-they-haves.7 Casino Banking Banks also began to trade financial instruments, taking the advice of Fear of Flying author Erica Jong: “If you don’t risk anything then you risk even more.” Initially, banks traded currencies and government bonds. Volatility of currencies increased following the collapse of the Bretton Woods agreement and the demise of the gold standard.


pages: 372 words: 101,678

Lessons from the Titans: What Companies in the New Economy Can Learn from the Great Industrial Giants to Drive Sustainable Success by Scott Davis, Carter Copeland, Rob Wertheimer

3D printing, activist fund / activist shareholder / activist investor, additive manufacturing, Airbnb, airport security, barriers to entry, business cycle, business process, clean water, commoditize, coronavirus, corporate governance, COVID-19, Covid-19, disruptive innovation, Elon Musk, factory automation, global pandemic, hydraulic fracturing, Internet of things, iterative process, low cost airline, low cost carrier, Marc Andreessen, megacity, Network effects, new economy, Ponzi scheme, profit maximization, random walk, RFID, ride hailing / ride sharing, risk tolerance, shareholder value, Silicon Valley, six sigma, skunkworks, software is eating the world, strikebreaker, Toyota Production System, Uber for X, winner-take-all economy

Contents Cover Title Page Copyright Page Contents ACKNOWLEDGMENTS INTRODUCTION CHAPTER 1 GENERAL ELECTRIC PART I The Jack Welch Years and the Cash Flow Machine That Created the Largest Company on Earth CHAPTER 2 GENERAL ELECTRIC PART II How a Culture of Arrogance Led to the Largest Collapse in American History CHAPTER 3 BOEING A Struggle to Find Balance in Risk Management CHAPTER 4 DANAHER Process-Driven Reinvention CHAPTER 5 HONEYWELL How Cultural Transformation Led One of the Greatest Turnarounds in History CHAPTER 6 UNITED TECHNOLOGIES The Dangers of Fixed Incentives CHAPTER 7 CATERPILLAR Avoiding the Forecasting Trap CHAPTER 8 ROPER The Amazing Untold Story of Brian Jellison and His Timeless Lessons on Compounding CHAPTER 9 TRANSDIGM How to Turn a Million into a Billion CHAPTER 10 STANLEY BLACK & DECKER Adding a Digital Layer CHAPTER 11 UNITED RENTALS Asset Sharing Done Right CHAPTER 12 THE IMPORTANCE OF BUSINESS SYSTEMS AND OTHER KEY LESSONS FROM INDUSTRIALS INDEX ABOUT THE AUTHORS Guide Cover Title Page Lessons from the Titans: What Companies in the New Economy Can Learn from the Great Industrial Giants to Drive Sustainable Success Page List a b i ii iii iv v vi vii viii ix x xi xii xiii xiv xv xvi xvii xviii xix xx xxi xxii xxiii xxiv xxv xxvi xxvii xxviii 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321 322 Praise for Lessons from the Titans In every era, it is always tempting to believe that the fundamentals have somehow changed.

In this context we believe that greater focus should be applied to the basic old-fashioned principles that we observe in the best-run companies. These principles exist, they are time tested, and our aim is to share them with you. WHY INDUSTRIALS ARE THE PERFECT SECTOR TO ANALYZE As veteran analysts, we’ve had a front row seat for the market’s two-decade-old obsession with disruption, digital transformation, market dominance, and cultish leadership. But as the era of the “new economy” shows early signs of maturation, the question becomes, What companies will endure and continue to grow—and how? The answer comes from an unlikely place: the big industrial companies that have chugged along successfully, many of them for decades. They are the market’s original tech sector. (See Figure I.1.) They were once young high-flyers, not much different from many of the tech wonders of today.

If Boeing, as America’s largest exporter, can go from an enviable profit machine to a company seeking a government handout in less than a year, any company can. And in the same context, if Danaher can win by focusing on manufacturing excellence and cash generation, then so can you. This book—a hardheaded explication of what companies can do to thrive and prosper in the coming environment—will equip you with the insights, strategies, and tactics to ensure that you count your organization among the winners in this new economy. CHAPTER 1 GENERAL ELECTRIC PART I The Jack Welch Years and the Cash Flow Machine That Created the Largest Company on Earth BY SCOTT DAVIS Our first case study is the biggest story of them all, the amazing and disheartening narrative of a signature American company that rejuvenated its business a number of times and then faltered, in one of the largest erosions of shareholder and reputational value in history.


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Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present by Jeff Madrick

accounting loophole / creative accounting, Asian financial crisis, bank run, Bretton Woods, business cycle, capital controls, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, desegregation, disintermediation, diversified portfolio, Donald Trump, financial deregulation, fixed income, floating exchange rates, Frederick Winslow Taylor, full employment, George Akerlof, Hyman Minsky, income inequality, index fund, inflation targeting, inventory management, invisible hand, John Meriwether, Kitchen Debate, laissez-faire capitalism, locking in a profit, Long Term Capital Management, market bubble, minimum wage unemployment, MITM: man-in-the-middle, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, Myron Scholes, new economy, North Sea oil, Northern Rock, oil shock, Paul Samuelson, Philip Mirowski, price stability, quantitative easing, Ralph Nader, rent control, road to serfdom, Robert Bork, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, Ronald Reagan: Tear down this wall, shareholder value, short selling, Silicon Valley, Simon Kuznets, technology bubble, Telecommunications Act of 1996, The Chicago School, The Great Moderation, too big to fail, union organizing, V2 rocket, value at risk, Vanguard fund, War on Poverty, Washington Consensus, Y2K, Yom Kippur War

News & World Report, April 3, 2000. 12 “A NEW ERA ECONOMY”: Partnoy, Infectious Greed, p. 107. 13 YET THERE WERE MANY HISTORICAL ANALOGIES: See, for example, Murray N. Rothbard, The Panic of 1819 (New York: AMS, 1962). 14 THE ECONOMIST WROTE IN 1999: The Economist, September 29, 1991, quoted by Jeff Madrick, The Business Media and the New Economy, Joan Shorenstein Center, Harvard University, December 2001, p. 13. 15 AS LATE AS 2000: Peter Schwartz and Peter Leyden, “The Long Boom: A History of the Future, 1980–2020,” Wired, July 1997. 16 THERE WAS BROAD SUPPORT: “Question: Is There a New Economy?,” Speech by Alan Greenspan at the University of California, Berkeley, September 4, 1998. 17 THE MEDIA PAID GROWING ATTENTION: Madrick, The Business Media and the New Economy. 18 FORTUNE ANALYZED HOW JACK WELCH: Betsy Morris, “Tearing Up the Jack Welch Playbook,” Fortune, July 11, 2006. 19 CORPORATIONS WILL NORMALLY MINIMIZE: Alan Murray, “Inflated Profits in Corporate Books Is Half the Story,” Wall Street Journal, July 2, 2002, cited by Partnoy, Infectious Greed, p. 210. 20 THE SUPREME COURT RULED: Central Bank of Denver v.

Greenspan was convinced that computer technologies were at last taking hold across American business, meaning that the nation could get rising output per worker—more productivity—and pay substantial raises without raising prices. He became the leading government advocate of a New Economy. In fact, in 1997 the unemployment rate fell to 4.5 percent, far lower than economists—even Democratic economists—believed possible without stoking inflation. And long-term interest rates were falling sharply. From mid-1998 to the end of 1999, the Dow Jones Industrials rose roughly 4,000 points from about 7,500 to 11,500 on the conviction there was a New Economy, and the unemployment rate fell to nearly 4 percent without stimulating inflation. The extreme government deficits turned into sizable surpluses, as tax revenues rose with incomes and the capital gains taken on the rising stock market.

Such technological advances arrived every twenty to thirty years—the mass production surge of autos, washing machines, record players, and radios that accompanied the spread of electricity in the 1920s; the development of television, jet travel, plastic consumer products, computers, new drugs, and nuclear power in the 1950s and 1960s. The commercialization of radio in the 1920s and 1930s and television in the 1950s were every bit as rapid as the spread of the Internet. The financial media were swept up in the speculative fever. In 1996, references to the “New Economy” of the Internet were relatively few, but by 1997, these references grew rapidly and by 1998 they were ubiquitous. BusinessWeek, Fortune, and Forbes were all advocates. The Economist wrote in 1999 that “this is not just a matter of accumulating extra capital. The new economy is about the specific potential to change the way businesses work and thereby yield a quantum shift in productivity.” The increase in the rate of productivity growth rose almost to the rates reached in the 1950s and 1960s, but any “quantum” shift remained starry-eyed myth.


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The Rich and the Rest of Us by Tavis Smiley

affirmative action, Affordable Care Act / Obamacare, back-to-the-land, Bernie Madoff, Bernie Sanders, Buckminster Fuller, Corrections Corporation of America, Credit Default Swap, death of newspapers, deindustrialization, ending welfare as we know it, F. W. de Klerk, fixed income, full employment, housing crisis, Howard Zinn, income inequality, job automation, liberation theology, Mahatma Gandhi, mass incarceration, mega-rich, Nelson Mandela, new economy, obamacare, Occupy movement, plutocrats, Plutocrats, profit motive, Ralph Waldo Emerson, Ronald Reagan, shareholder value, Silicon Valley, Steve Jobs, traffic fines, trickle-down economics, War on Poverty, We are the 99%, white flight, women in the workforce, working poor

Poverty refused to discriminate on the basis of religious creed or ethnic identity.1 While many whom we met fit what some define as the “old poor” (people who were impoverished before the beginning of the “Great Recession” in late 2007), we were also gathered with shockingly large numbers of the “new poor”—citizens who were once bona fide members of America’s middle class, whose lives have been ravaged by the new economy’s middle class. They are the grandchildren and great grandchildren of a generation that embodied artist Norman Rockwell’s American Dream. They once possessed relatively predictable and reasonably comfortable lives until they were inexplicably cast into a maelstrom of economic dispossession and spiritual despair. When the bottom fell out of the American Dream, the formerly lower, middle, and upper-middle classes found themselves recast in the nightmares of the downtrodden.

Yet here we are, only two decades into a digital revolution that has impacted every aspect of American life. In a very real sense, no matter which recovery prognosticators you believe, now’s the time to hold the government accountable while simultaneously holding ourselves accountable as we regain the capacity to “do-for-self.” At the January 2012 symposium, Suze Orman emphasized “personal responsibility” and learning “how to make more out of less” as necessary strategies for survival in the new economy. “You need to know what to do with money, who to give it to, how to invest it in your retirement plans, and how to be able to take care of yourself in the future,” Orman cautioned. “Because my biggest fear is that they’re just going to keep pushing all of this down the road. You’re not going to have Medicare. You’re not going to have Social Security in the way that you think it’s going to be.

While 60 percent of the jobs lost during the economic downturn were in mid-wage occupations, 73 percent of the jobs added have been in lower-wage occupations such as cashiers, stock clerks, and food preparation workers. The Post Office, once a middle class safe haven for nonskilled workers, recently announced a downsizing plan that will eliminate 35,000 jobs. Where and how will those workers be absorbed in the new economy? 4. Minorities receive the majority of government entitlements. False: Nearly half (48.5 percent) of all Americans, live in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Seventy percent of food stamp recipients are white. 5. No one goes hungry in America. False: According to Feeding America, 50 million Americans go to bed hungry and have no idea where their next meal will come from.


pages: 791 words: 85,159

Social Life of Information by John Seely Brown, Paul Duguid

business process, Claude Shannon: information theory, computer age, cross-subsidies, disintermediation, double entry bookkeeping, Frank Gehry, frictionless, frictionless market, future of work, George Gilder, George Santayana, global village, Howard Rheingold, informal economy, information retrieval, invisible hand, Isaac Newton, John Markoff, Just-in-time delivery, Kenneth Arrow, Kevin Kelly, knowledge economy, knowledge worker, lateral thinking, loose coupling, Marshall McLuhan, medical malpractice, moral hazard, Network effects, new economy, Productivity paradox, Robert Metcalfe, rolodex, Ronald Coase, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, Superbowl ad, Ted Nelson, telepresence, the medium is the message, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thomas Malthus, transaction costs, Turing test, Vannevar Bush, Y2K

Harmondsworth, Middlesex: Penguin Books. Jonkheer, Kees. 1999. "Intelligent Agents, Markets, and Competition: Consumers' Interests and Functionality of Destination Sites." First-Monday [Online] 4 (6). Available: http://firstmonday.org/issues/issue4_6/jonkheer/index.html [1999, July 21]. Kelly, Kevin. 1997. "New Rules for the New Economy." Wired [Online] 5.09 (September). Available: http://www.wired.com/wired/archive/5.09/newrules.html [1999, July 21]. . 1998. "New Economy? What New Economy?" Wired [Online] 6.05 (May). Available: http://www.wired.com/wired/archive/6.05/Krugman.html [1999, July 21]. Kenney, Martin, and Urs von Burg. 1999. "Technology and Path Dependence: The Divergence between Silicon Valley and Route 128." Industrial and Corporate Change 8 (1): 67 103. Kogut, Bruce, Gordon Walker, and Dong-Jae Kim. 1995.

Anyone seeking to shape our new world by harnessing the power of information technology should read this book." JOHN HAGEL, Partner, McKinsey & Company, and Author of Net Worth "Despite all predictions that the information revolution will bring us a bloodless workplace of machines and Dilberts, Brown and Duguid show us that human interactions, human conversations, and human meaning will still form the beating heart of business. Wonderful! A necessary read for everyone interested in the new economy." W. BRIAN ARTHUR, Citibank Professor, Santa Fe Institute "In The Social Life of Information, Brown and Duguid help people throughout business, academia, government, and society at large to better understand that information technology can have an appropriate and positive impact only if we design technology and social systems holistically. This is a book that I have long awaited, and that should be required reading for the information technology system researchers and designers, managers, policy makers, and executives in every information-intensive organization."

Indeed, many shifts that the 6-Ds reveal are not the first step in Page 23 an unresisting downward spiral from complex to simple. Rather, they are parts of profound and often dramatic shifts in society's dynamic equilibrium, taking society from one kind of complex arrangement to another, as a quick review of a few Ds will suggest. Dimensions of the Ds Much talk about disaggregation and demassification readily assumes that the new economy will be a place of ever-smaller firms, light, agile, and unencumbered. It was once commonplace, for example, to compare the old Goliath, GM, against the new David, Microsoft. As Microsoft's market capitalization passed GM's, the latter had some 600,000 employees and the former barely 25,000. The difference is stark. Not, though, stark enough to step from here to what the business writers Larry Downes and Chunka Mui call the "Law of Diminishing Firms."


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The People's Platform: Taking Back Power and Culture in the Digital Age by Astra Taylor

A Declaration of the Independence of Cyberspace, American Legislative Exchange Council, Andrew Keen, barriers to entry, Berlin Wall, big-box store, Brewster Kahle, citizen journalism, cloud computing, collateralized debt obligation, Community Supported Agriculture, conceptual framework, corporate social responsibility, creative destruction, cross-subsidies, crowdsourcing, David Brooks, digital Maoism, disintermediation, don't be evil, Donald Trump, Edward Snowden, Fall of the Berlin Wall, Filter Bubble, future of journalism, George Gilder, Google Chrome, Google Glasses, hive mind, income inequality, informal economy, Internet Archive, Internet of things, invisible hand, Jane Jacobs, Jaron Lanier, Jeff Bezos, job automation, John Markoff, Julian Assange, Kevin Kelly, Kickstarter, knowledge worker, Mark Zuckerberg, means of production, Metcalfe’s law, Naomi Klein, Narrative Science, Network effects, new economy, New Journalism, New Urbanism, Nicholas Carr, oil rush, peer-to-peer, Peter Thiel, plutocrats, Plutocrats, post-work, pre–internet, profit motive, recommendation engine, Richard Florida, Richard Stallman, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley ideology, slashdot, Slavoj Žižek, Snapchat, social graph, Steve Jobs, Stewart Brand, technoutopianism, trade route, Whole Earth Catalog, WikiLeaks, winner-take-all economy, Works Progress Administration, young professional

(Income polarization was actually increasing at the time, the already affluent becoming ever more so while wages for most U.S. workers stagnated at levels below 1970s standards.)3 The wonders of computing meant skyrocketing productivity, plentiful jobs, and the end of recessions. The combination of the Internet and IPOs (initial public offerings) had flattened hierarchies, computer programming jobs were reconceived as hip, and information was officially more important than matter (bits, boosters liked to say, had triumphed over atoms). A new economy was upon us. Despite the hype, the new economy was never that novel. With some exceptions, the Internet companies that fueled the late nineties fervor were mostly about taking material from the off-line world and simply posting it online or buying and selling rather ordinary goods, like pet food or diapers, and prompting Internet users to behave like conventional customers. Due to changes in law and growing public enthusiasm for high-risk investing, the amount of money available to venture capital funds ballooned from $12 billion in 1996 to $106 billion in 2000, leading many doomed ideas to be propped up by speculative backing.

Rebecca Solnit wrote movingly of the negative consequences of the first dot-com boom on San Francisco in her book Hollow City: Gentrification and the Eviction of Urban Culture (New York: Verso, 2001) and has written similarly astute observations on the effects of the latest boom on the community. Rebecca Solnit, “Google Invades,” London Review of Books 35, no. 3 (February 7, 2013). 2. Doug Henwood, After the New Economy (New York: The New Press, 2003), 1. 3. Alan Greenspan, “The American Economy in a World Context,” 35th Annual Conference on Bank Structure and Competition of the Federal Reserve Bank of Chicago, Chicago, May 16, 1999; Henwood, After the New Economy, 79 and 86. 4. Ibid., 201 and 217. 5. Tom Rosenstiel, “Five Myths About the Future of Journalism,” Washington Post, April 7, 2011. 6. Eli Pariser, The Filter Bubble: What the Internet Is Hiding from You (New York: Penguin Press, 2011), 49. 7. Lacy, Once You’re Lucky, Twice You’re Good, 92–93. 8.

Massive sums were committed to enterprises that replicated efforts: multiple sites specialized in selling toys or beauty supplies or home improvement products, and most of them flopped. Barring notable anomalies like Amazon and eBay, online shopping failed to meet inflated expectations. The Web was declared a wasteland and investments dried up, but not before many venture capitalists and executives profited handsomely, soaking up underwriting fees from IPOs or exercising their options before stocks went under.4 Although the new economy evaporated, the experience set the stage for a second bubble and cemented a relationship between technology and the market that shapes our digital lives to this day. As business and technology writer Sarah Lacy explains in her breathless account of Silicon Valley’s recent rebirth, Once You’re Lucky, Twice You’re Good, a few discerning entrepreneurs extracted a lesson from the bust that they applied to new endeavors with aplomb after the turn of the millennium: the heart of the Internet experience was not e-commerce but e-mail, that is to say, connecting and communicating with other people as opposed to consuming goods that could easily be bought at a store down the street.


Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America by David Callahan

affirmative action, Albert Einstein, American Legislative Exchange Council, automated trading system, Bernie Sanders, Bonfire of the Vanities, carbon footprint, carried interest, clean water, corporate social responsibility, David Brooks, demographic transition, desegregation, don't be evil, Donald Trump, Douglas Engelbart, Douglas Engelbart, Edward Thorp, financial deregulation, financial independence, global village, Gordon Gekko, greed is good, high net worth, income inequality, Irwin Jacobs: Qualcomm, Jeff Bezos, John Markoff, Kickstarter, knowledge economy, knowledge worker, Marc Andreessen, Mark Zuckerberg, market fundamentalism, medical malpractice, mega-rich, Mitch Kapor, Naomi Klein, NetJets, new economy, offshore financial centre, Peter Thiel, plutocrats, Plutocrats, profit maximization, quantitative trading / quantitative finance, Ralph Nader, Renaissance Technologies, Richard Florida, Robert Bork, rolodex, Ronald Reagan, school vouchers, short selling, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, stem cell, Steve Ballmer, Steve Jobs, unpaid internship, Upton Sinclair, Vanguard fund, War on Poverty, working poor, World Values Survey

Among the biggest Democratic donors in Bush’s neighborhood is Laurence Lebowitz, who is the chairman and managing director of HBK Capital Management, one of the largest hedge funds in Texas. In River Oaks, Obama drew support from John Arnold, a thirtysomething hedge fund whiz who has built a $4 billion fortune through energy trading. Arnold got his start at Enron, where he had earned an $8 million bonus in 2001 for Internet-based trading, just before the company collapsed. Raised in Dallas by a lawyer dad and an accountant mom—typical parents for a new-economy billionaire—Arnold and his wife, Laura, gave more than $120,000 to the Democratic Party in 2008. (Laura is not the kind of wife you would have met in River Oaks in earlier times; she holds degrees from Harvard, Yale, and Cambridge and left a high-powered law career to focus her philanthropic energies on poor kids.) c01.indd 14 5/11/10 6:17:15 AM educated, rich, and liberal 15 Houston is still the capital of the U.S. energy industry, but finance and services now account for a larger share of the city’s economy, and this is where much of the Democratic money is coming from—not to mention many of the votes.

Of course, these politics aren’t so surprising when you consider White’s background: he went to Harvard University before returning to Texas to get a law degree and become a plaintiff lawyer at Susman Godfrey. Only later did he enter the energy business. Farther to the west, Austin has long been an island of blue in a sea of red. There was a time when the city’s liberalism was primarily due to its high concentration of government workers, college professors, and pot-smoking twenty-somethings who hung around town for the music scene. More recently, the city has emerged as a center of the new economy and a popular destination for go-getters with fancy degrees. Besides computer-related industries, Austin has scores of biotech firms. The number of patents coming out of Austin jumped from seventyfive in 1975 to two thousand in 2001. The “People’s Republic of Austin” used to be a middle-income city. Now it is seriously affluent.2 Texas is still a conservative place, and the state’s richer residents, overall, remain strongly Republican.

When the Forbes 400 list was first published in 1982, it was dominated by oil, manufacturing fortunes, and old-money families. Of the paltry 13 billionaires on the 1982 list, 5 had made their fortunes in oil. By 2008, nearly half of the billionaires on the Forbes list—190 people—derived their wealth from financial services, technology, and media or entertainment. Only 51 billionaires got rich from oil, gas, chemicals, manufacturing, mining, and lumber. Many of the new-economy rich are trending Democrat, while the old-economy rich are more likely to be Republican. There are a number of reasons for this. For starters, these two groups can have different views of wealth creation. If you work in the knowledge economy, you may tend to see wealth creation as a collective enterprise, not as stemming from Ayn Randian individual heroics. The success of your business will depend on your hiring highly educated employees, and you’ll rely on public schools and universities to turn out such people.


pages: 239 words: 45,926

As the Future Catches You: How Genomics & Other Forces Are Changing Your Work, Health & Wealth by Juan Enriquez

Albert Einstein, Berlin Wall, bioinformatics, borderless world, British Empire, Buckminster Fuller, business cycle, creative destruction, double helix, global village, half of the world's population has never made a phone call, Howard Rheingold, Jeff Bezos, Joseph Schumpeter, Kevin Kelly, knowledge economy, more computing power than Apollo, new economy, personalized medicine, purchasing power parity, Ray Kurzweil, Richard Feynman, Robert Metcalfe, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, spice trade, stem cell, the new new thing

One of the great minds on competitive analysis is Harvard Business School professor Michael Porter. He has looked at flowers as well as a myriad of other industries in various books, including The Competitive Advantage of Nations, Competitive Advantage, and Competitive Strategy. 7. A lot of people have written on this phenomenon of a new economy; one of my favorites is Wired editor Kevin Kelly. Many of the ideas in this chapter come from his book New Rules for the New Economy (New York: Viking, 1998). Peter F. Drucker has also been detailing these changes for decades, starting with The End of the Economic Man (1939). See also his Post-Capitalist Society (1993). 8. Robert Metcalf, founder of 3Com, argues the value of a network is proportional to the square of the number of people in it. 9. Attempting to regulate these decentralized networks is certain to give bureaucrats ulcers— or worse.

The rules of an economy Based on knowledge and networks Are very different from those Of a manufacturing-based economy.7 In the old economy … if something was scarce … it was valuable. Those who controlled the mines, owned the exclusive rights to a product, or had the only copy of something could become very wealthy. Today it is just the opposite. (Of course, there are still some fuddy-duddy economists using ever more complex equations to try to convince you that some basic economic “laws” haven’t changed … that there is no new economy.) Even though there are still many exclusive gewgaws we can buy … With a brand name … Expensive … These goods are not what drive most economic growth. And therefore those who control these products … are no longer the richest people in the world. WHEN YOU ARE TRYING TO SPREAD, AND SELL, KNOWLEDGE … KEEPING SOMETHING “EXCLUSIVE” AND “RARE” OFTEN LEADS TO A LOSS OF VALUE. WHAT MATTERS MOST IS THAT THE PURCHASER BECOMES PART OF A NETWORK … AND THAT THE NETWORK KEEPS GROWING.8 The first purchaser of a telephone, or a fax machine, had a useless product … He could not communicate with anyone.

AS A DEVELOPING COUNTRY … YOU CAN LOWER INFLATION … REDUCE CORRUPTION … CUT YOUR BUDGET … PRIVATIZE … AND STILL NOT GET RICH … Because you are not generating knowledge … just product … (North America, Western Europe, and Japan generated 84 percent of all scientific papers published during 1995.) Chile, often cited as the shining example of Latin American economic reform … Carefully followed the recommendations of the most orthodox Ph.D.s in economics … Nicknamed the “Chicago Boys” … For a decade, its economy grew spectacularly. But even Chile may be headed toward a crash … Because it took the inefficiency out of the old economy … But failed to build a new economy. Two commodities, copper and cellulose, represent 40 percent of Chile’s total exports … Most of what Chile exports contains very little technology. One can get a sense of how knowledge-intensive an economy is by dividing: If the resulting ratio is greater than one, the country exports more knowledge-based products than raw materials. If it is less than one, the economy remains vulnerable to commodity cycles.


Deep Work: Rules for Focused Success in a Distracted World by Cal Newport

8-hour work day, Albert Einstein, barriers to entry, business climate, Cal Newport, Capital in the Twenty-First Century by Thomas Piketty, Clayton Christensen, David Brooks, David Heinemeier Hansson, deliberate practice, disruptive innovation, Donald Knuth, Donald Trump, Downton Abbey, en.wikipedia.org, Erik Brynjolfsson, experimental subject, follow your passion, Frank Gehry, informal economy, information retrieval, Internet Archive, Jaron Lanier, knowledge worker, Mark Zuckerberg, Marshall McLuhan, Merlin Mann, Nate Silver, new economy, Nicholas Carr, popular electronics, remote working, Richard Feynman, Ruby on Rails, Silicon Valley, Silicon Valley startup, Snapchat, statistical model, the medium is the message, Watson beat the top human players on Jeopardy!, web application, winner-take-all economy, zero-sum game

(If I had such secrets, it’s unlikely I’d share them in a book.) The other two winning groups, however, are accessible. How to access them is the goal we tackle next. How to Become a Winner in the New Economy I just identified two groups that are poised to thrive and that I claim are accessible: those who can work creatively with intelligent machines and those who are stars in their field. What’s the secret to landing in these lucrative sectors of the widening digital divide? I argue that the following two core abilities are crucial. Two Core Abilities for Thriving in the New Economy 1. The ability to quickly master hard things. 2. The ability to produce at an elite level, in terms of both quality and speed. Let’s begin with the first ability. To start, we must remember that we’ve been spoiled by the intuitive and drop-dead-simple user experience of many consumer-facing technologies, like Twitter and the iPhone.

And when only a human will do, improvements in communications and collaboration technology are making remote work easier than ever before, motivating companies to outsource key roles to stars—leaving the local talent pool underemployed. This reality is not, however, universally grim. As Brynjolfsson and McAfee emphasize, this Great Restructuring is not driving down all jobs but is instead dividing them. Though an increasing number of people will lose in this new economy as their skill becomes automatable or easily outsourced, there are others who will not only survive, but thrive—becoming more valued (and therefore more rewarded) than before. Brynjolfsson and McAfee aren’t alone in proposing this bimodal trajectory for the economy. In 2013, for example, the George Mason economist Tyler Cowen published Average Is Over, a book that echoes this thesis of a digital division.

Nate Silver, of course, with his comfort in feeding data into large databases, then siphoning it out into his mysterious Monte Carlo simulations, is the epitome of the high-skilled worker. Intelligent machines are not an obstacle to Silver’s success, but instead provide its precondition. The Superstars The ace programmer David Heinemeier Hansson provides an example of the second group that Brynjolfsson and McAfee predict will thrive in our new economy: “superstars.” High-speed data networks and collaboration tools like e-mail and virtual meeting software have destroyed regionalism in many sectors of knowledge work. It no longer makes sense, for example, to hire a full-time programmer, put aside office space, and pay benefits, when you can instead pay one of the world’s best programmers, like Hansson, for just enough time to complete the project at hand.


pages: 375 words: 88,306

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan

additive manufacturing, Airbnb, AltaVista, Amazon Mechanical Turk, autonomous vehicles, barriers to entry, basic income, bitcoin, blockchain, Burning Man, call centre, collaborative consumption, collaborative economy, collective bargaining, commoditize, corporate social responsibility, cryptocurrency, David Graeber, distributed ledger, employer provided health coverage, Erik Brynjolfsson, Ethereum, ethereum blockchain, Frank Levy and Richard Murnane: The New Division of Labor, future of work, George Akerlof, gig economy, housing crisis, Howard Rheingold, information asymmetry, Internet of things, inventory management, invisible hand, job automation, job-hopping, Kickstarter, knowledge worker, Kula ring, Lyft, Marc Andreessen, megacity, minimum wage unemployment, moral hazard, moral panic, Network effects, new economy, Oculus Rift, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, peer-to-peer rental, profit motive, purchasing power parity, race to the bottom, recommendation engine, regulatory arbitrage, rent control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Ross Ulbricht, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart contracts, Snapchat, social software, supply-chain management, TaskRabbit, The Nature of the Firm, total factor productivity, transaction costs, transportation-network company, two-sided market, Uber and Lyft, Uber for X, uber lyft, universal basic income, Zipcar

Madison: University of Wisconsin Center for Cooperatives. http://reic.uwcc.wisc.edu/sites/all/REIC_FINAL.pdf. 27. See the SELC website at http://www.theselc.org/. 28. See an introduction to Rustrum’s Digital-Cooperative 101 at http://rustrum.com/digital-cooperative-101/. 29. See, for example, Nathan Schneider and Trebor Scholz, “The Internet Needs a New Economy,” November 8, 2015. http://www.thenextsystem.org/the-internet-needs-a-new-economy/. Their concurrent thinking from late 2014 is also interesting, for example, by Scholz, “Platform Cooperativism vs. the Sharing Economy,” Medium, December 5, 2014 (https://medium.com/@trebors/platform-cooperativism-vs-the-sharing-economy-2ea737f1b5ad#.v78qh7ewj) and by Schneider, “Owning Is the New Sharing,” Shareable, December 21, 2014 (http://www.shareable.net/blog/owning-is-the-new-sharing). 30.

So, for example, the buyer and seller could resolve their dispute themselves.) There’s a rating system to help choose sellers, buyers, and notaries. It’s a little different from what’s used in a centralized marketplace, and is not completely immune to manipulation.10 There is a more sophisticated class of contracts (called smart contracts) emerging for blockchain-based transactions. In Blockchain: Blueprint for a New Economy, Melanie Swan explains that while a traditional contract is an agreement between two or more parties to do something, in the case of a smart contract, the same terms exist, but with one exception—trust that comes from having a third-party is less important.11 This is because the smart contract protocol can specify, as computer code, terms under which certain obligations are fulfilled, and can execute actions like sending a payment or deactivating a file once there is evidence of the contract’s terms being fulfilled.

It is very computationally intensive to actually find this nonce-identifier combination, but once the combination has been found, it is very easy to verify that the combination satisfies the mathematical property. 9. Albert Wenger, “Bitcoin as Protocol,” USV Blog, October 31, 2013. https://www.usv.com/blog/bitcoin-as-protocol. 10. Dionysis Zindros, “A Pseudonymous Trust System for a Decentralized Anonymous Marketplace,” GitHub Gist, 2015, https://gist.github.com/dionyziz/e3b296861175e0ebea4b. 11. Melanie Swan, Blockchain: Blueprint for a New Economy (Sebastopol, CA: O’Reilly Media, Inc., 2015). 12. Primavera De Fillipi, “Ethereum: Freenet or Skynet?,” Talk presented at the Berkman Center for Internet & Society, Harvard University, Cambridge, MA, April 15, 2014. 13. Lawrence Lessig, Code and Other Laws of Cyberspace (New York: Basic Books, 1999). 14. Vitalik Buterin, “Decentralized Protocol Monetization and Forks,” Ethereum Blog, April 30, 2014. https://blog.ethereum.org/2014/04/30/decentralized-protocol-monetization-and-forks. 15.


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The End of Growth: Adapting to Our New Economic Reality by Richard Heinberg

3D printing, agricultural Revolution, back-to-the-land, banking crisis, banks create money, Bretton Woods, business cycle, carbon footprint, Carmen Reinhart, clean water, cloud computing, collateralized debt obligation, computerized trading, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, David Graeber, David Ricardo: comparative advantage, dematerialisation, demographic dividend, Deng Xiaoping, Elliott wave, en.wikipedia.org, energy transition, falling living standards, financial deregulation, financial innovation, Fractional reserve banking, full employment, Gini coefficient, global village, happiness index / gross national happiness, I think there is a world market for maybe five computers, income inequality, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, Kenneth Rogoff, late fees, liberal capitalism, mega-rich, money market fund, money: store of value / unit of account / medium of exchange, mortgage debt, naked short selling, Naomi Klein, Negawatt, new economy, Nixon shock, offshore financial centre, oil shale / tar sands, oil shock, peak oil, Ponzi scheme, price stability, private military company, quantitative easing, reserve currency, ride hailing / ride sharing, Ronald Reagan, short selling, special drawing rights, The Wealth of Nations by Adam Smith, Thomas Malthus, Thorstein Veblen, too big to fail, trade liberalization, tulip mania, WikiLeaks, working poor, zero-sum game

Fundamentally new technologies, products, and trends in business (as opposed to minor tweaks in existing ones) tend to develop at a slow pace. “Many of the big, resource-consuming trends of the near past are soon coming to an end in terms of their ability to attract investment and cover the cost of resources for development, production, and implementation.” Back in the late 1990s business was buzzing with talk of a “new economy” based on e-commerce. Internet start-up companies attracted enormous amounts of investment capital and experienced rapid growth. But while e-commerce flourished, many expectations about profit opportunities and rates of growth proved unrealistic. Automation has reached the point where most businesses need dramatically fewer employees. “Presumably, this should make companies more profitable and increase their willingness to invest in new products and services,” writes Larsson.

At some point in the next few years, stock and real estate values will plunge, banks will close, and businesses will shutter their doors. Monetary, financial, and social systems built upon the expectation of growth will simply fail in growth’s absence. In the worst instance, that failure could take the form of a nearly complete cessation of trade, as occurred nationally in Argentina in December, 2001. Some sort of new economy would inevitably emerge from the wreckage, but in scale and scope it would be a shadow of the one we knew just a few years ago. Measured in GDP, it might correspond to the world economy of fifty, a hundred, or even a hundred and fifty years ago. The pursuit of the ideals of fairness, openness, and freedom, and the fights against corruption, greed, and tyranny will of course continue, as they must, but these struggles will play out within the constraints of a shrinking economy.

Resolving the conflict entirely in favor of individuals is no solution if this results in a substantial reduction in the integrity of the social bonds the economy knits together: that is, if we are reduced to a random collection of seven billion humans, each scrambling for survival in the absence of functioning currencies and governments. In that case, the result would be universal chaos, confusion, and suffering. Somehow we have to prepare individually for the ending of growth (a process likely to be accompanied by economic and political upheavals) while at the same time preserving and building social cohesion and laying the groundwork for a new economy that can function in a post-growth, post-fossil fuel environment. It’s a tall order, but nothing less will do. Setting Priorities As someone who has for several years been speaking and writing about the consequences of impending energy scarcity, I’m often asked for personal advice. “Where should I live in order to avoid the worst impacts from Peak Oil?” “What career should I prepare myself for?”


The Code: Silicon Valley and the Remaking of America by Margaret O'Mara

"side hustle", A Declaration of the Independence of Cyberspace, accounting loophole / creative accounting, affirmative action, Airbnb, AltaVista, Amazon Web Services, Apple II, Apple's 1984 Super Bowl advert, autonomous vehicles, back-to-the-land, barriers to entry, Ben Horowitz, Berlin Wall, Bob Noyce, Buckminster Fuller, Burning Man, business climate, Byte Shop, California gold rush, carried interest, clean water, cleantech, cloud computing, cognitive dissonance, commoditize, computer age, continuous integration, cuban missile crisis, Danny Hillis, DARPA: Urban Challenge, deindustrialization, different worldview, don't be evil, Donald Trump, Doomsday Clock, Douglas Engelbart, Dynabook, Edward Snowden, El Camino Real, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Frank Gehry, George Gilder, gig economy, Googley, Hacker Ethic, high net worth, Hush-A-Phone, immigration reform, income inequality, informal economy, information retrieval, invention of movable type, invisible hand, Isaac Newton, Jeff Bezos, Joan Didion, job automation, job-hopping, John Markoff, Julian Assange, Kitchen Debate, knowledge economy, knowledge worker, Lyft, Marc Andreessen, Mark Zuckerberg, market bubble, mass immigration, means of production, mega-rich, Menlo Park, Mikhail Gorbachev, millennium bug, Mitch Kapor, Mother of all demos, move fast and break things, move fast and break things, mutually assured destruction, new economy, Norbert Wiener, old-boy network, pattern recognition, Paul Graham, Paul Terrell, paypal mafia, Peter Thiel, pets.com, pirate software, popular electronics, pre–internet, Ralph Nader, RAND corporation, Richard Florida, ride hailing / ride sharing, risk tolerance, Robert Metcalfe, Ronald Reagan, Sand Hill Road, Second Machine Age, self-driving car, shareholder value, side project, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, skunkworks, Snapchat, social graph, software is eating the world, speech recognition, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Stewart Brand, supercomputer in your pocket, technoutopianism, Ted Nelson, the market place, the new new thing, There's no reason for any individual to have a computer in his home - Ken Olsen, Thomas L Friedman, Tim Cook: Apple, transcontinental railway, Uber and Lyft, uber lyft, Unsafe at Any Speed, upwardly mobile, Vannevar Bush, War on Poverty, We wanted flying cars, instead we got 140 characters, Whole Earth Catalog, WikiLeaks, William Shockley: the traitorous eight, Y Combinator, Y2K

It was going to communicate a vision. “We need a new framework of law and thinking to help us govern in the new economy,” Doerr explained. “I, and many others, will help form that new network.”30 By early 1997, the organization had a name: TechNet. It had a staff and a multimillion-dollar budget. Longtime kingmakers like Regis McKenna and Floyd Kvamme agreed to join in, as did many other big-name Valley CEOs. The goal of staying out of partisan fundraising didn’t last; within the year TechNet had established Republican and Democratic political action committees, which turned into gushing cash machines for visiting politicians. But TechNet also staged regular “graduate seminars on the new economy” so that lawmakers could better understand what was happening—and how they could best help Silicon Valley grow.

Silicon Valley could never have come to be without the presence of visionary, audacious business leaders. Reagan and his conservative allies also were right when they argued that overly regulated markets and nationalized industries could present big hurdles to entrepreneurial innovation—many of the globe’s would-be Silicon Valleys attest to that. Yet, in its celebration of the free market, the individual entrepreneur, and the miracles of a wholly new economy, the Silicon Valley mythos left out some of the most interesting, unprecedented, and quintessentially American things about the modern tech industry. For these entrepreneurs were not lone cowboys, but very talented people whose success was made possible by the work of many other people, networks, and institutions. Those included the big-government programs that political leaders of both parties critiqued so forcefully, and that many tech leaders viewed with suspicion if not downright hostility.

Why care too much about the way government institutions or old-line industries worked, when your purpose was to disrupt them in favor of something far better? Why care about history when you were building the future? But there, again, revolutionary reality departs from revolutionary myth. For all its determination to push away the gatekeepers, dismantle ossified power structures, and think differently, the “new economy” of tech was deeply intertwined with the old. Venture capital came from Rockefellers and Whitneys and union pension funds. Microprocessors powered Detroit autos and Pittsburgh steel. Amid 1970s stagflation and 1980s deindustrialization, when all of America was looking for a more hopeful economic narrative, old-line media and old-line politicians championed technology companies and turned their leaders into celebrities.


Class Acts: Service and Inequality in Luxury Hotels by Rachel Sherman

deskilling, income inequality, indoor plumbing, invisible hand, knowledge worker, means of production, new economy, pink-collar, Thorstein Veblen, union organizing, upwardly mobile, yield management

Title. tx911.3.c8s54 2006 647.94068—dc22 2006003726 Manufactured in the United States of America 15 10 14 13 12 9 8 7 6 11 10 09 08 5 4 3 2 1 07 This book is printed on New Leaf EcoBook 50, a 100% recycled fiber of which 50% is de-inked post-consumer waste, processed chlorine-free. EcoBook 50 is acid-free and meets the minimum requirements of ansi/astm d5634–01 (Permanence of Paper). UC_Sherman (O).qxd 10/3/2006 2:01 PM For my parents Page v UC_Sherman (O).qxd 10/3/2006 2:01 PM Page vi UC_Sherman (O).qxd 10/3/2006 2:01 PM Page vii Contents Acknowledgments Introduction: Luxury Service and the New Economy ix 1 1. “Better Than Your Mother”: The Luxury Product 24 2. Managing Autonomy 63 3. Games, Control, and Skill 110 4. Recasting Hierarchy 154 5. Reciprocity, Relationship, and Revenge 184 6. Producing Entitlement 223 Conclusion: Class, Culture, and the Service Theater 257 Appendix A: Methods 271 Appendix B: Hotel Organization 287 Appendix C: Jobs, Wages, and Nonmanagerial Workers in Each Hotel: 2000–2001 291 Notes 295 References 325 Index 341 UC_Sherman (O).qxd 10/3/2006 2:01 PM Page viii UC_Sherman (O).qxd 10/3/2006 2:01 PM Page ix Acknowledgments My greatest debt is to the workers, managers, hotel guests, and others who participated in this study.

Wealthy party-givers pay millions for bigname acts to entertain at their birthday parties and their daughters’ bat mitzvahs.17 Best-selling novels of this period, such as The Nanny Diaries (the story of a young nanny’s trials working for an overly entitled Upper East Side mother) and The Devil Wears Prada (the story of a young personal assistant’s trials working for an overly entitled female magazine editor), satirize the entitlement of rich people and their mistreatment of assistants and servants.18 The rise of luxury consumption and production not only feeds a public preoccupation with the lifestyles of the rich and famous but also illuminates key features of what is often called the “new” U.S. economy. First, the new economy is a global one. Sites of luxury service are frequently what Manuel Castells calls “nodes” in the global “space of flows”—local places crisscrossed by movements of people and capital.19 Luxury clients, purchasing services in London or Beijing, are often the mobile corporate executives who make the global economy run. Hotels and restaurants are located in the growing range of “producer services,” which are used by high-end professionals but create nonprofessional and often low-paying jobs in the service sector.20 At the same time, workers in hotels, restaurants, and retail are frequently immigrants from Europe, Asia, and Latin America.

Hotels and restaurants are located in the growing range of “producer services,” which are used by high-end professionals but create nonprofessional and often low-paying jobs in the service sector.20 At the same time, workers in hotels, restaurants, and retail are frequently immigrants from Europe, Asia, and Latin America. Luxury service companies are also often transnational, belonging to international chains and conglomerates that offer services worldwide. Second, the new economy is a service economy. Like more than 85 percent of workers in the United States, luxury service workers (and usually consumers too) are employed in the service sector.21 Many of these workers provide face-to-face, or “interactive,” service, in which the product consists, to varying extents, of the interaction between workers and customers.22 In contrast to “old economy” manufacturing jobs, in which the UC_Sherman (O).qxd 6 10/3/2006 2:01 PM Page 6 introduction people who produced the products did not personally encounter the people who bought these products, the selfhoods of both worker and client come into play in these interactions.


pages: 370 words: 102,823

Rethinking Capitalism: Economics and Policy for Sustainable and Inclusive Growth by Michael Jacobs, Mariana Mazzucato

balance sheet recession, banking crisis, basic income, Bernie Sanders, Bretton Woods, business climate, business cycle, Carmen Reinhart, central bank independence, collaborative economy, complexity theory, conceptual framework, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Ricardo: comparative advantage, decarbonisation, deindustrialization, dematerialisation, Detroit bankruptcy, double entry bookkeeping, Elon Musk, endogenous growth, energy security, eurozone crisis, factory automation, facts on the ground, fiat currency, Financial Instability Hypothesis, financial intermediation, forward guidance, full employment, G4S, Gini coefficient, Growth in a Time of Debt, Hyman Minsky, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Internet of things, investor state dispute settlement, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Rogoff, Kickstarter, knowledge economy, labour market flexibility, low skilled workers, Martin Wolf, mass incarceration, Mont Pelerin Society, neoliberal agenda, Network effects, new economy, non-tariff barriers, paradox of thrift, Paul Samuelson, price stability, private sector deleveraging, quantitative easing, QWERTY keyboard, railway mania, rent-seeking, road to serfdom, savings glut, Second Machine Age, secular stagnation, shareholder value, sharing economy, Silicon Valley, Steve Jobs, the built environment, The Great Moderation, The Spirit Level, Thorstein Veblen, too big to fail, total factor productivity, transaction costs, trickle-down economics, universal basic income, very high income

This development forced major US semiconductor companies to retreat from this segment of the market, with Intel facing the possibility of bankruptcy in the process.31 However, led by Intel with its microprocessor for the IBM PC and its clones, US companies became world leaders in chip design. Indeed, the IBM PC, with its open-systems architecture, was the basis for the rise of a ‘New Economy business model’ that has dramatically altered the conditions of innovative enterprise. As I have detailed in a number of studies, the principles of strategic control, organisational integration and financial commitment remained central to the success of companies that pioneered or adopted the New Economic business model.32 At the same time, however, innovative New Economy companies could eschew investment in integrated skill bases that were as deep and broad as those under the ‘Old Economy’ business model, because of the availability of accumulated knowledge from the research labs of the Old Economy corporations upon which these could draw.

William Lazonick is Professor of Economics at University of Massachusetts Lowell. He is co-founder and president of the Academic-Industry Research Network. Previously, he was Assistant and Associate Professor of Economics at Harvard University, Professor of Economics at Barnard College of Columbia University and Distinguished Research Professor at INSEAD. His book Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (Upjohn Institute, 2009) won the 2010 Schumpeter Prize. His article, ‘Innovative Business Models and Varieties of Capitalism’ received the Henrietta Larson Award from Harvard Business School for best article in Business History Review in 2010. His article ‘Profits Without Prosperity: Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off’ was awarded the HBR McKinsey Award for outstanding article in Harvard Business Review in 2014.

They are not; they are better at exploiting them. Successful start-ups almost always begin with an idea that has ripened in the research organisation of a large company. Lose the large companies, or research organisations of large companies, and start-ups disappear.33 While, some two decades after Moore made this statement, technology start-ups have yet to disappear, there is no doubt that the New Economy business model has been far better at commercialising existing technologies than developing new ones. Increasingly, moreover, US corporate executives look to the government to provide them with the new technologies that they need,34 even as these executives have turned toward enriching themselves by boosting their companies’ stock prices and with them their stock-based pay.35 Elsewhere I have analysed in detail the shift of US industrial corporations from a ‘retain-and-reinvest’ resource-allocation regime, under which corporate revenues and personnel are retained and re-invested in innovative capabilities, to a ‘downsize-and-distribute’ allocation regime in which these companies downsize their experienced labour forces and distribute corporate cash to shareholders in the name of ‘maximising shareholder value’.


pages: 275 words: 84,980

Before Babylon, Beyond Bitcoin: From Money That We Understand to Money That Understands Us (Perspectives) by David Birch

agricultural Revolution, Airbnb, bank run, banks create money, bitcoin, blockchain, Bretton Woods, British Empire, Broken windows theory, Burning Man, business cycle, capital controls, cashless society, Clayton Christensen, clockwork universe, creative destruction, credit crunch, cross-subsidies, crowdsourcing, cryptocurrency, David Graeber, dematerialisation, Diane Coyle, disruptive innovation, distributed ledger, double entry bookkeeping, Ethereum, ethereum blockchain, facts on the ground, fault tolerance, fiat currency, financial exclusion, financial innovation, financial intermediation, floating exchange rates, Fractional reserve banking, index card, informal economy, Internet of things, invention of the printing press, invention of the telegraph, invention of the telephone, invisible hand, Irish bank strikes, Isaac Newton, Jane Jacobs, Kenneth Rogoff, knowledge economy, Kuwabatake Sanjuro: assassination market, large denomination, M-Pesa, market clearing, market fundamentalism, Marshall McLuhan, Martin Wolf, mobile money, money: store of value / unit of account / medium of exchange, new economy, Northern Rock, Pingit, prediction markets, price stability, QR code, quantitative easing, railway mania, Ralph Waldo Emerson, Real Time Gross Settlement, reserve currency, Satoshi Nakamoto, seigniorage, Silicon Valley, smart contracts, social graph, special drawing rights, technoutopianism, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, wage slave, Washington Consensus, wikimedia commons

It seems that the cheque may well be the first payment instrument to vanish in my lifetime because the existence of instant payment systems means it no longer has an economic function. I’ll return to this later in the book when we move on to the spread of instant payments and the potential for a ‘push for push’ in retail payments. Buttons and bank acts Industrializing Britain saw more changes in the way that money worked as it strove to reinvent money for its new economy. As the nature of that economy had changed, so the nature of money had needed to change too, but it lags. At the time, it was not clear exactly what needed doing. People could see that there were problems but not what do to about them. Naturally I refer to this time because the Internet, mobile phones and online commerce are creating a vortex that is sucking in monetary innovation at an accelerating rate, my point being that we have been here before.

President Nazarbayev was not the only world leader to experiment with new forms of money in response to the financial crisis. In Venezuela, as in Greece and other countries, community currencies were explored. An example was the cimarrón there. The circular cardboard tokens (with a picture of a runaway slave on them) were supported by President Chavez with the aim of tackling poverty and establishing new economies. These types of currency tend to be used to mediate barter in ‘prosumer’ markets, where you can’t get the currency to buy things without producing things. Imagine something along these lines at Internet scale: currencies that are specific to markets, that you can’t obtain without bringing things to the market. Interesting, not in the sense of Mr Chavez’s national socialism but in the sense of reputation currencies, a favourite topic of mine.

Unable to reach her either at home or the office… It has been at least a decade since my wife called me either at home or at the office or, indeed, anywhere else. If she wants to talk to me, she calls me, she doesn’t call a place where I might be. The mobile phone didn’t just change the payphone business, it changed the communications paradigm: the common mental model that we share as the basis for thinking about communications. Uneven The Canadian novelist William Gibson – author of the wonderful Neuromancer (the seminal work of fiction for the new economy) and the man who coined the term ‘cyberspace’ – famously observed that ‘the future is already here, it’s just unevenly distributed’. He means that the technologies that will shape society in our lifetimes already exist, it’s just that we might not have noticed them yet. One of the key elements missing from that 1988 vision of 2013 was the mobile phone, despite it having existed for a decade.


pages: 561 words: 87,892

Losing Control: The Emerging Threats to Western Prosperity by Stephen D. King

Admiral Zheng, asset-backed security, barriers to entry, Berlin Wall, Bernie Madoff, Bretton Woods, BRICs, British Empire, business cycle, capital controls, Celtic Tiger, central bank independence, collateralized debt obligation, corporate governance, credit crunch, crony capitalism, currency manipulation / currency intervention, currency peg, David Ricardo: comparative advantage, demographic dividend, demographic transition, Deng Xiaoping, Diane Coyle, Fall of the Berlin Wall, financial deregulation, financial innovation, fixed income, Francis Fukuyama: the end of history, full employment, G4S, George Akerlof, German hyperinflation, Gini coefficient, hiring and firing, income inequality, income per capita, inflation targeting, invisible hand, Isaac Newton, knowledge economy, labour market flexibility, labour mobility, liberal capitalism, low skilled workers, market clearing, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, old age dependency ratio, Paul Samuelson, Ponzi scheme, price mechanism, price stability, purchasing power parity, rent-seeking, reserve currency, rising living standards, Ronald Reagan, savings glut, Silicon Valley, Simon Kuznets, sovereign wealth fund, spice trade, statistical model, technology bubble, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Market for Lemons, The Wealth of Nations by Adam Smith, Thomas Malthus, trade route, transaction costs, Washington Consensus, women in the workforce, working-age population, Y2K, Yom Kippur War

These waves of influence are hardly trivial. In the late 1990s, both central bankers (notably Alan Greenspan, the then Chairman of the Federal Reserve) and economic commentators argued in favour of the so-called new economy, a view that undoubtedly contributed to large – and ultimately unsustainable – increases in equity prices, as observed in Chapter 4. The new economy was being driven, apparently, by sweeping productivity gains that would lead to both elevated economic growth and ever higher stock prices. In the late 1990s, there certainly was some evidence consistent with the ‘new economy’. In the US, growth was unexpectedly strong and inflation was unusually low. But does this constitute proof? Not necessarily. First, although US economic growth was, indeed, exceptionally strong in the late 1990s, this strength came after a period of disappointing weakness in the first half of the 1990s.

Second, while technology innovations can improve productivity growth and, hence, allow an economy to grow more quickly without bumping into an inflationary constraint, commodity-price declines create a very similar effect, at least for commodity-consuming nations. It’s easy to be seduced by the idea that economic success comes from technological improvements or wise policy decisions. As perceptions about the new economy began to pick up in the late 1990s, Alan Greenspan, who had famously warned of ‘irrational exuberance’ in 1996,12 seemed happy to jump on the new economy bandwagon later in the decade. His case was helped by the improving split between growth and inflation. But was he right? When the Asian crisis struck in 1997, triggered by a collapse in the value of the Thai baht, many argued that the end of the economic world was nigh. The Asian tigers had, apparently, been the main engines of global growth for a number of years.

The inflows helped push down short- and long-term interest rates, lifted the US equity market and contributed to an ongoing boom in domestic demand. This was, perhaps, the first indication that the US economy could be at the mercy of international capital flows over which policymakers had no direct control. The bubble in equities could not be sustained. While it lasted many people were happy to extol the wonders of the ‘new economy’. There certainly was an improvement in productivity growth led by cutting-edge technologies, but, as time passed, the impact of these technologies on rising living standards began to fade. Economic growth in the developed world slowed following the 2000 stock-market crash and would have been slower still in the absence of a global housing boom and a massive, and unsustainable, expansion of credit.


pages: 189 words: 64,571

The Cheapskate Next Door: The Surprising Secrets of Americans Living Happily Below Their Means by Jeff Yeager

asset allocation, carbon footprint, delayed gratification, dumpster diving, index card, job satisfaction, late fees, mortgage debt, new economy, payday loans, Skype, upwardly mobile, Zipcar

It’s a whole new economy. Who would have thought a few years ago that Ken Lay’s Enron would begin to look like a model for good corporate management? That during the Christmas shopping season of 2008, I would swear I saw then–U.S. Treasury Secretary Henry Paulson in my local dollar store? I was shocked to discover that Cabinet members are apparently allowed to moonlight. Everything has changed in this new economy, even our language. Marketers invented the term “under-buyers” to refer to those people who are now spending less—either less than they did before or less than they can afford. I guess they thought the word “cheapskate” would hurt people’s feelings. Yes, when it comes to the economy, we’ve come a long way, baby. And it’s all been downhill. Or has it? It’s a new economy now, and I believe it is inviting us to take a new approach to money, and to life.

I probably caught up to that standard just about the day it became obsolete and the bar was raised even higher. In fact, to be successful by that measure, I would have needed to earn more than double the $10,000 salary I received in my first nonprofit job … or else still be in the fourth grade. Fortunately, I’ve never had any interest in attending my class reunions. And so I’m somewhat reluctant to propose a new measure of personal financial success for this new economy we’re living in, knowing that it, too, can’t possibly apply to everyone. But the interesting thing about the new standard for success I’m proposing—spend less than your age—is that spending is nearly always more controllable than earning. This is a standard that a great many Americans should be able to achieve, because the vast majority of the time we control our spending. Even when we neglect it or try to abdicate our responsibility, those are choices, too.

Even the stoic Amish folks I spoke with had a spark of 120-volt envy in their eyes when I mentioned the Crock-Pot, saying with an audible sense of resignation (or so I thought) that they were perfectly content with their stovetop pressure cookers. Yep, if the status-appliance of the last decade was a $10,000 Viking gas range, then the good old-fashioned Crock-Pot (at about $30 new) is the kitchen appliance du jour for the new economy. It’s little wonder that the cheapskates next door are crazy for their Crock-Pots. Slow cookers are energy-sippers compared to most other cooking methods, even after taking into account the fact that it might take eight hours or even longer to cook a dish in a Crock-Pot. It uses just 100 watts of electricity, which means that if you use it once a week for eight hours at a time, it’ll cost you only about thirty cents a month in electricity.


pages: 265 words: 69,310

What's Yours Is Mine: Against the Sharing Economy by Tom Slee

4chan, Airbnb, Amazon Mechanical Turk, asset-backed security, barriers to entry, Berlin Wall, big-box store, bitcoin, blockchain, citizen journalism, collaborative consumption, congestion charging, Credit Default Swap, crowdsourcing, data acquisition, David Brooks, don't be evil, gig economy, Hacker Ethic, income inequality, informal economy, invisible hand, Jacob Appelbaum, Jane Jacobs, Jeff Bezos, Khan Academy, Kibera, Kickstarter, license plate recognition, Lyft, Marc Andreessen, Mark Zuckerberg, move fast and break things, move fast and break things, natural language processing, Netflix Prize, Network effects, new economy, Occupy movement, openstreetmap, Paul Graham, peer-to-peer, peer-to-peer lending, Peter Thiel, pre–internet, principal–agent problem, profit motive, race to the bottom, Ray Kurzweil, recommendation engine, rent control, ride hailing / ride sharing, sharing economy, Silicon Valley, Snapchat, software is eating the world, South of Market, San Francisco, TaskRabbit, The Nature of the Firm, Thomas L Friedman, transportation-network company, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, ultimatum game, urban planning, WikiLeaks, winner-take-all economy, Y Combinator, Zipcar

Collaborative Consumption, July 31, 2014. http://www.collaborativeconsumption.com/2014/ 07/31/collaborative-finance-by-the-people-for-the-people/. ———. “The Sharing Economy Lacks A Shared Definition.” Co.Exist, November 21, 2013. http://www.fastcoexist.com/3022028/the-sharing-economy-lacks-a-shared-definition. ———. “Transcript of ‘The Currency of the New Economy Is Trust.’” TED talk, September 2012. http://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_trust/transcript. ———. “Welcome to the New Reputation Economy.” Wired, September 2012. http://www.wired.co.uk/magazine/archive/2012/09/features/welcome-to-the-new-reputation-economy. Botsman, Rachel, and Roo Rogers. What’s Mine Is Yours: The Rise of Collaborative Consumption. Harper Business, 2010. Bowles, Nellie. “Tech Titans on Income Inequality and Their ‘Stingy, Stingy’ Industry.”

But a moment later, he is more interested in building businesses: I attended a meeting of Sharing Economy participants . . . they were developing ideas—brilliant ideas actually—to share customers with each other, across verticals. One person even suggested that there could be a peer economy currency—maybe Bitcoin. Or even points to encourage people to cross verticals and recruit new people into this new economy. So it is not surprising that almost all the campaigns at Peers were focused on the well-funded sectors of the Sharing Economy represented by Airbnb and Lyft. The highest-profile campaigns, such as the 2014 ridesharing initiative in Seattle, operated side-by-side with well-funded efforts driven by Lyft and Uber themselves. Whatever the intent of the more community-focused Peers activists, the group functioned in part as a front for Silicon Valley lobbying.

That rate is based on an annual study of the costs of vehicle operation—those things like repairs, insurance, maintenance, gas and depreciation that were not factored into Uber’s study.56 Based on this figure Dean Baker of the Center for Economic and Policy Research estimated that the average length of a drive would have to be “considerably less than 8 miles” for Uber drivers to come out ahead of traditional cab drivers.57 Baker also notes that if Uber drivers do not pay for commercial insurance, or do not invest in the upkeep of their cars to the extent that commercial drivers are expected to, they would have fewer expenses and more take home pay: “If that’s the case, this would be a typical story of getting rich in the new economy. Find a way to get around the rules and then claim it as a great innovation.” We do have one other source of information about driver pay, which is the drivers themselves. One of the most multifaceted and careful is an account by Philadelphia journalist Emily Guendelsberger of her time as an Uber driver.58 After meticulously tracking her own expenses and those of other drivers who shared them with her, she made about $17 per hour gross, and after Uber’s 28% cut and the 19% that went to expenses she ended up with just $9.34 an hour.


pages: 193 words: 47,808

The Flat White Economy by Douglas McWilliams

"Robert Solow", access to a mobile phone, banking crisis, Big bang: deregulation of the City of London, bonus culture, Boris Johnson, Chuck Templeton: OpenTable:, cleantech, cloud computing, computer age, correlation coefficient, Edward Glaeser, en.wikipedia.org, Erik Brynjolfsson, eurozone crisis, George Gilder, hiring and firing, income inequality, informal economy, Kickstarter, knowledge economy, loadsamoney, low skilled workers, mass immigration, Metcalfe’s law, Network effects, new economy, offshore financial centre, Pareto efficiency, Peter Thiel, Productivity paradox, Robert Metcalfe, Silicon Valley, smart cities, special economic zone, Steve Jobs, working-age population, zero-sum game

Graham is not only a great chief executive, but a truly decent human being and I am proud to be considered a friend of his (which I was for many years before he came to work with me). Although the whole Cebr office have supported me, the greatest help has come from Charles Davis, currently Cebr director and Rob Harbron, Joint Managing Economist for Macroeconomics for Cebr. It was during a meeting when Graham, Charles, Rob and I were considering how to handle our data on this new economy that Rob came up with the suggested name – the Flat White Economy – that became the title for the book. So the title is his and he deserves credit for it. Charles provided me with a lot of helpful data, and Chapter 6 on London’s relationship with the rest of the UK is partly based on the report which he and colleagues prepared for the Corporation of London covering the fiscal aspect of this.

Skills, talent and a lively labour supply of young creative people – that’s why the Flat White Economy is in London. And why EC1V? Why the Old Street area? Well, it is the nearest point of what might loosely be called Central London that’s within reach of the less expensive housing in East and North London. That is why Old Street Roundabout has become popularly known as ‘Silicon Roundabout. The scale of this new economy is such that it has affected – directly or indirectly – the whole UK economy. Roughly one third of the UK economy (30.7%) is now in business and financial services: this contributed 54% of the total GDP growth between 2010 and Q2 of 2014. Obviously not all of this growth is from the Flat White Economy. But it is the driving force behind this growth. And it appears probable from my analysis for this book that even the rapid growth officially recorded understates the Flat White Economy’s contribution.

I also thought that some of the damage to the financial system from the financial collapse would only fully show itself by slowing down the recovery rather than by adding to the immediate impact of the recession. Both conclusions were probably valid, but they failed to explain why London should since have recovered so much faster than the rest of the country. Figure 1.1: House prices in London 1983–2013. Source: Lloyds Regional House Price Data, 2014 Recovery: a new economy? The recovery in London started at the end of 2009. Employment had fallen by a sharp 1.7% that year, but it grew by 0.5% in 2010, with similar growth in 2011. By 2012 employment growth in London was really on a roll, with a massive 2.3% growth. In 2013 employment growth in London was even more spectacular – at 4.4%. I’ve used employment as an indicator because (as I will explain later) there is some doubt about the GDP/GVA5 data.


pages: 452 words: 110,488

The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead by David Callahan

1960s counterculture, affirmative action, business cycle, corporate governance, corporate raider, creative destruction, David Brooks, deindustrialization, East Village, fixed income, forensic accounting, full employment, game design, greed is good, high batting average, housing crisis, illegal immigration, income inequality, job satisfaction, mandatory minimum, market fundamentalism, McMansion, microcredit, moral hazard, new economy, New Urbanism, offshore financial centre, oil shock, old-boy network, plutocrats, Plutocrats, postindustrial economy, profit maximization, profit motive, RAND corporation, Ray Oldenburg, Robert Bork, rolodex, Ronald Reagan, shareholder value, Shoshana Zuboff, Silicon Valley, Steve Jobs, The Bell Curve by Richard Herrnstein and Charles Murray, The Chicago School, Thorstein Veblen, War on Poverty, winner-take-all economy, World Values Survey, young professional, zero-sum game

When the stock did, in fact, hit that level a month later, Blodget was hailed as an oracle. Shortly thereafter he moved to Merrill Lynch with a $3 million contract. There, he reigned as the single most visible adviser to investors hoping to score big in the Internet gold rush. Blond and affable, with telegenic good looks, Blodget was everywhere with his stock predictions as well as broader prognostications about the new economy. What Blodget didn't mention to CNBC junkies or Merrill Lynch's own clients was that his role at Merrill went far beyond analyzing stocks. Like other star analysts of the time, he also became deeply involved in Merrill's investment banking business, helping to bring Internet companies— and fat underwriting fees—to Merrill. One of the companies Merrill's investment banking division represented was Go2Net, a company that InfoSpace was in the process of purchasing in 2000.

He spent his days working on a book for Random House and meeting regularly with lawyers. In 2003, Blodget settled with Spitzer's office, agreeing to pay a $4 million penalty—yet admitting no wrongdoing. The settlement was easy enough to afford. Blodget had pulled in nearly $20 million during his brief star turn at Merrill. HENRY BLODGET and the ATM looters have nothing in common and much in common. Blodget was among the ranks of the big winners in the new economy—the very top earners who saw unprecedented income gains during the boom of the 1990s. His education and background had helped him to secure his place in the Winning Class: successful parents, private schools, Yale University, connections on Wall Street. The ATM looters, by contrast, were among the far larger ranks of Americans who had either stayed put economically or realized only modest gains during the boom years.

The creation of this mass upper middle class is a historic accomplishment on par with the creation of the mass middle class after World War II. Yet this gain has come at a significant cost. The vast gulf between the top tiers of American earners and everyone else is the most obvious of these costs. How big is this gulf? Very big. To get a sense of these gaps, stick around the Banana Republic store. The people working the cash register and sales floor are typical of the losers in the new economy. Most of them are young entry-level workers without college degrees. As unskilled entry-level workers, these salespeople are doing terribly, in historical terms, and may well be making less money than their parents. If they're making the minimum wage, they're earning a wage that has decreased in constant dollars by over 20 percent since 1979. If they're making more than the minimum wage, they're still not doing well.


pages: 385 words: 101,761

Creative Intelligence: Harnessing the Power to Create, Connect, and Inspire by Bruce Nussbaum

3D printing, Airbnb, Albert Einstein, Berlin Wall, Black Swan, Chuck Templeton: OpenTable:, clean water, collapse of Lehman Brothers, creative destruction, Credit Default Swap, crony capitalism, crowdsourcing, Danny Hillis, declining real wages, demographic dividend, disruptive innovation, Elon Musk, en.wikipedia.org, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, follow your passion, game design, housing crisis, Hyman Minsky, industrial robot, invisible hand, James Dyson, Jane Jacobs, Jeff Bezos, jimmy wales, John Gruber, John Markoff, Joseph Schumpeter, Kickstarter, lone genius, longitudinal study, manufacturing employment, Marc Andreessen, Mark Zuckerberg, Martin Wolf, new economy, Paul Graham, Peter Thiel, QR code, race to the bottom, reshoring, Richard Florida, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, Steve Ballmer, Steve Jobs, Steve Wozniak, supply-chain management, Tesla Model S, The Chicago School, The Design of Experiments, the High Line, The Myth of the Rational Market, thinkpad, Tim Cook: Apple, too big to fail, tulip mania, We are the 99%, Y Combinator, young professional, Zipcar

Top bankers received astonishing salaries—the brightest grads from Ivy League universities saw salaries starting at $200,000 to $300,000 plus a fat annual bonus several times that—to use their understanding of mathematical models to create esoteric financial instruments that sliced and diced mortgages and other kinds of debt. So complex were the models created by the Wizards of Wall Street that few bank CEOs actually knew what they really were or, more important, how much they were worth. We all know how that turned out. It wasn’t supposed to be like this. Placing our trust in the experts in finance and trading was, we were all told, a crucial part of the New Economy. When BusinessWeek ran a cover on the New Economy in 2000, it was a celebration of technology, finance, strategy, consulting, sales, service, and experience. The message was that we should ship all our manufacturing overseas and concentrate on higher-level, value-added information activities. Using your head, not your hands, was considered a higher evolutionary state of economic—and social—affairs. It paid more and you “didn’t have to get your hands dirty.”

Only when both the manufacturing sector and the service sector began to bleed jobs did blue- and white-collar interests find common cause. As Americans began to feel the effects of the Great Recession, it became clear that the economic benefits of the New Economy disproportionately went to a tiny elite, while the vast middle class saw immiseration and downward mobility. We witnessed an inequality gap that hadn’t been as wide since the 1920s and the Great Depression. The Occupy Wall Street movement, with its rallying cry “We are the 99 percent,” crystallized the sense that something needed to change. You knew something fundamental was about to change when both the Tea Party and Occupy Wall Street found a common enemy, publicly blaming “Crony Capitalism” for destroying the American Dream. Even while the New Economy was at its peak, alternative ways of thinking and doing had begun springing up around the nation. Alice Waters’s groundbreaking organic restaurant Chez Panisse served as inspiration for a local food movement, which, four decades later, has gone truly global.

In a 2010 interview with Martin Wolf, the economics correspondent for the Financial Times, Lawrence Summers, former Treasury Secretary under President Clinton and ex-assistant for economic policy for Barack Obama, grudgingly admitted he was surprised at the failure of efficient markets in the crisis. Summers was, after all, a chief architect of the deregulation that helped provoke the financial crash in 2007. In 1999, Summers, along with Treasury Secretary and ex-Goldman Sachs co-CEO Robert Rubin, did away with Glass-Steagall, the Depression-era regulation of the financial markets, calling the repeal “historic legislation” that will “better enable American companies to compete in the new economy.” Perhaps no one believed more in the rationality and efficiency of markets than the former chairman of the Federal Reserve. But in October 2008, Greenspan told a congressional committee that he had put too much faith in the self-correcting powers of the markets. “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he told the House Committee on Oversight and Government Reform, as reported in the New York Times.


pages: 353 words: 91,211

The Shock of the Old: Technology and Global History Since 1900 by David Edgerton

agricultural Revolution, anti-communist, British Empire, Computer Numeric Control, conceptual framework, creative destruction, deglobalization, dematerialisation, desegregation, deskilling, endogenous growth, global village, Haber-Bosch Process, interchangeable parts, knowledge economy, Mahatma Gandhi, manufacturing employment, means of production, megacity, microcredit, new economy, post-industrial society, Productivity paradox, Ronald Reagan, Silicon Valley, spinning jenny, Upton Sinclair, urban planning

In these respects the industrialisation of China has been very different from that of Japan. Market Stalinism and foreign investment were critical in China’s drive to industrialise. Despite its scale and speed and its impact on the global economy, the growth of China is not the product of a profoundly new economy. It has a distinctly old feel to it. At the beginning of the twenty-first century China was sucking in vast quantities of heavy raw materials, from oil to copper, driving up world prices. It became easily the largest steel producer in the world, with rates of growth comparable to those of steel in the long boom. The ‘new economy’ was being replaced by a very old economy driven by commodity prices. Far from the information superhighway being the conduit for all this new production, it was none other than the ship that carried the great bulk of Chinese production, and indeed world trade as a whole.

The timelines of technological history, and they abound, are based on dates of invention and innovation. The most significant twentieth-century technologies are often reduced to the following: flight (1903), nuclear power (1945), contraception (1955), and the internet (1965). We are told that change is taking place at an ever-accelerating pace, and that the new is increasingly powerful. The world, the gurus insist, is entering a new historical epoch as a result of technology. In the new economy, in new times, in our post-industrial and postmodern condition, knowledge of the present and past is supposedly ever less relevant. Inventors, even in these post-modern times, are ‘ahead of their time’, while societies suffer from the grip of the past, resulting in a supposed slowness to adapt to new technology. There are new things under the sun, and the world is indeed changing radically, but this way of thinking is not among them.

The usual story of production goes like this: there has been a shift in employment and output from agriculture to industry and then to services. The first is labelled the industrial revolution. The second is called a transition to post-industrial, knowledge or information societies, linked to what many called post-modernism, what some Marxists called ‘new times’, and, what capitalist Wall Street gurus called the ‘new economy’.1 In one version peddled in the 1990s, modern economies are becoming ‘weightless’ and ‘dematerialised’. Such accounts resurrect an old argument, as if it had never been made before, that in future it will not be land or capital which will have power, but knowledge. They promise, again, a world where ‘intellectual property’ and ‘human capital’ rule. Yet this stage theory of history, focusing on shares of employment, easily misrepresents the whole.


words: 49,604

The Weightless World: Strategies for Managing the Digital Economy by Diane Coyle

"Robert Solow", barriers to entry, Berlin Wall, Big bang: deregulation of the City of London, blue-collar work, Bretton Woods, business cycle, clean water, computer age, Corn Laws, creative destruction, cross-subsidies, David Ricardo: comparative advantage, dematerialisation, Diane Coyle, Edward Glaeser, everywhere but in the productivity statistics, financial deregulation, full employment, George Santayana, global village, hiring and firing, Howard Rheingold, income inequality, informal economy, invention of the sewing machine, invisible hand, Jane Jacobs, Joseph Schumpeter, Kickstarter, knowledge economy, labour market flexibility, laissez-faire capitalism, lump of labour, Marshall McLuhan, mass immigration, McJob, microcredit, moral panic, Network effects, new economy, Nick Leeson, night-watchman state, North Sea oil, offshore financial centre, pension reform, pensions crisis, Ronald Reagan, Silicon Valley, spinning jenny, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, Thorstein Veblen, Tobin tax, two tier labour market, very high income, War on Poverty, winner-take-all economy, working-age population

The multimillionaire businessman Steve Forbes, on the other hand, praised the possibilities opened up by this new world order. He said: ‘The economic transformation that we are on the threshold of will unleash an expansive future for America, a future far greater than anything we’ve seen before. The industrial machine was about hierarchies, big companies, The Weightless World 9 big unions, big cities, big government. The thrust of this new economy is more Jeffersonian. It gives power to individuals. It gives power to people.’14 Populism versus techno-populism, perhaps. For a while the Buchanan version made all the running. The New York Times ran a special series of long articles on corporate ‘downsizing’, and Time magazine made it a cover story in the early stages of the election campaign. According to the New York Times, more than 43 million jobs had been erased in the US since 1979, and nearly three-quarters of households had encountered a layoff.

Stephen Oliner and Daniel Sichel, Brookings Papers, Vol. 2, 1994. See Moths to the Flame, Gregory Rawlins, p 116. ‘The Dynamo and the Computer’, Paul David, American Economic Review, May 1990. ‘The Competitive Crash in Large Scale Computing’, Timothy Bresnahan and Shane Greenstein, NBER Working Paper No. 4901, 1995. October 1996 issue. New York Times Magazine, Sunday 29 September 1996. Both reported in ‘It’s The New Economy, Stupid’ by John Heilemann, Wired magazine, San Francisco, CA, March 1996. ‘The Downsizing of America’, New York Times special report, Times books, 1996. The New York Review, 3 October 1996. The State of Working America 1996-97, Employment Policy Institute, Washington DC. (http://epn.org/epi/epswa-ex.html). ‘The Economics of Superstars’, Sherwin Rosen, American Economic Review, December 1981.

From boom to bust in less than a decade — a decline and fall shared by all of the West’s industrial regions. The early 1980s recession brought more redundancies as old industries shrank, with bitterness and pain. The American commentator James Fallows The Weightless World 34 described, in a long article in The Atlantic Monthly in March 1985, the ruined lives left behind by South Chicago’s retreating steel industry. ‘To the steelworkers of South Chicago everything about the ‘new’ economy is bad. They see the movement of jobs to the American south-west or to Taiwan as just another way to undercut the workingman’s wage. Few of them see a way to adapt to the new order. Why should they even think of moving? Everyone has a story about the friend or nephew who drove to Houston or Denver, found himself stacking bottles at the Seven-Eleven or competing with illegal Mexican immigrants for construction jobs, and drove back home.’


pages: 283 words: 73,093

Social Democratic America by Lane Kenworthy

affirmative action, Affordable Care Act / Obamacare, barriers to entry, basic income, business cycle, Celtic Tiger, centre right, clean water, collective bargaining, corporate governance, David Brooks, desegregation, Edward Glaeser, endogenous growth, full employment, Gini coefficient, hiring and firing, Home mortgage interest deduction, illegal immigration, income inequality, invisible hand, Kenneth Arrow, labor-force participation, manufacturing employment, market bubble, minimum wage unemployment, new economy, postindustrial economy, purchasing power parity, race to the bottom, rent-seeking, rising living standards, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, school choice, shareholder value, sharing economy, Skype, Steve Jobs, too big to fail, Tyler Cowen: Great Stagnation, union organizing, universal basic income, War on Poverty, working poor, zero day

Domestic industries, such as restaurants and hotels, face more competitors too, as technological advances, falling construction and transportation costs, and deregulation have reduced barriers to entry. In addition, shareholders now want rapid appreciation in stock values. Whereas a generation ago they were happy with a consistent dividend payment and some long-term increase in the stock price, they now demand buoyant quarterly profits and constant growth. Robert Reich has an apt label for this new economy: “supercapitalism.” American firms, he notes, “now have little choice but to relentlessly pursue profits.”2 This shift benefits investors, consumers, and some employees. But it encourages companies to resist pay increases, drop health-insurance plans, cut contributions to employee pensions, move abroad, downsize, replace regular employees with temporary ones, and pursue a variety of other cost-cutting strategies that weaken economic security, limit opportunity for the less skilled, and reduce income growth for many ordinary Americans.3 For better or worse, the new hypercompetitive, risk-filled economy is here to stay.

Fewer children grow up in a home with both biological parents. Participation in local civic associations has declined. And barely one in ten employed Americans is a union member. Even more problematic, these changes have a class tilt: families, community organizations, and unions have weakened most among those with less education and income.4 Some believe the best way to address the stresses and strains of the new economy is to strengthen these institutions. It’s a laudable aim. It would be good if more American children grew up in intact families, if unions ensured stable jobs and rising wages for a significant share of workers, and if community organizations provided guidance and support to more people in difficult circumstances. But that’s not likely to happen.5 Advocates of revitalizing these institutions tend to offer lots of hope but little evidence that it can be done.

“Asymmetries in the Opportunity Structure: Intergenerational Mobility Trends in Europe.” Research in Social Stratification and Mobility 30: 473–487. Fair, Ray. 2012. Predicting Presidential Elections and Other Things. 2nd ed. Stanford, CA: Stanford University Press. Families USA. 2009. “Americans at Risk: One in Three Uninsured.” Washington, DC. Farber, Henry S. 2010. “Job Loss and the Decline in Job Security in the United States.” Pp. 223–262 in Labor in the New Economy. Edited by Katharine G. Abraham, James R. Spletzer, and Michael Harper. Chicago: University of Chicago Press. Feingold, Russ. 2013. “Building a Permanent Majority for Reform.” Democracy, Winter: 45–49. Ferguson, Thomas and Joel Rogers. 1986. Right Turn: The Decline of the Democrats and the Future of American Politics. New York: Hill and Wang. Ferrarini, Tommy and Ann-Zofie Duvander. 2010. “Earner-Carer Model at the Cross-Roads: Reforms and Outcomes of Sweden’s Family Policy in Comparative Perspective.”


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The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, winner-take-all economy, working poor, zero-sum game

Those who showed themselves to be unfit due to unemployment and poverty had no one to blame but themselves and, with the right incentives, could reenter the workforce or invest in an education that would propel them into middle-class jobs. This bargain was also touted as offering everyone an equal chance to become unequal in the competition for jobs, status, and income. Widening access to university was, for instance, presented as an extension of meritocratic competition giving all the opportunity to acquire knowledge and skills required in the new economy with credentials the currency of opportunity. Changes in employer demands for talent also pointed toward a fairer society, as companies could no longer rely on the established stereotypes of managerial leadership based on the Ivy League or Oxbridge man. Going to a top university and living as part of a cloistered elite were no longer seen as sufficient in an increasingly multicultural and global economic environment.

Bartlett, The Individualized Corporation: A Fundamentally New Approach to Management (London: Random House, 2000), 8. 12. Michael B. Arthur and Denise M. Rousseau (eds.), The Boundaryless Career: A New Employment Principle for a New Organizational Era (New York: Oxford University Press, 1996). 13. Ibid., 4 and 6. 14. Maureen S. Bogdanowicz and Elaine K. Bailey, “The Value of Knowledge and the Values of the New Worker: Generation X and the New Economy.” Journal of European Industrial Training, 26 (2002): 127. 15. Peter Sheahan, Generation Y: Thriving and Surviving with Generation Y at Work. Hardie Grant Books. http://www.managementbooks.com.au/bookweb/details. cgi?ITEMNO=9781740663175 166 Notes to Pages 16–19 16. Richard Rosecrance, The Rise of the Virtual State: Wealth and Power in the Coming Century (New York: Basic Books, 1999), xi. 17.

See “Motorola Eyes Research China 3G Market.” http://www.cn-c114.net/577/ a318213.html; see also http://www.motorola.com.cn/en/about/inchina/default. asp See United Nations Conference on Trade and Development, World Investment Report 2006: FDI from Developing and Transition Economies: Implications for Development (Geneva, UNCTAD, 2006), 56. http://www.unctad.org/Templates/Webflyer.asp?docID=6337&intItemID=2068 &lang=1 The Washington Times, November 24, 2008; see also, “U.S. Automakers Say Labor Costs Must Shrink to Compete,” June 20, 2007. www.workforce.com/ section/00/article/24/96/64.html See Steve Hargreaves, “The New ‘Good’ Job: 12 Bucks an Hour,” CNNMoney. com (2009). www.money.cnn.com/2009/06/04/news/economy/green_jobs/ Financial Times, July 9, 2007. Amy Lee, “Dr Reddy’s Charts New Path for Indian Drugmakers,” Financial Times, December 19, 2006. See http://money.cnn.com/magazines/fortune/global500/2009/ Ming Zeng and Peter J. Williamson, (2007) Dragons at Your Door: How Chinese Cost Innovation Is Disrupting Global Competition (Boston, Mass.: Harvard Business School Press, 2007), 2. Ibid., 89. Ibid., 14.


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Culture and Prosperity: The Truth About Markets - Why Some Nations Are Rich but Most Remain Poor by John Kay

"Robert Solow", Albert Einstein, Asian financial crisis, Barry Marshall: ulcers, Berlin Wall, Big bang: deregulation of the City of London, business cycle, California gold rush, complexity theory, computer age, constrained optimization, corporate governance, corporate social responsibility, correlation does not imply causation, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, Donald Trump, double entry bookkeeping, double helix, Edward Lloyd's coffeehouse, equity premium, Ernest Rutherford, European colonialism, experimental economics, Exxon Valdez, failed state, financial innovation, Francis Fukuyama: the end of history, George Akerlof, George Gilder, greed is good, Gunnar Myrdal, haute couture, illegal immigration, income inequality, industrial cluster, information asymmetry, intangible asset, invention of the telephone, invention of the wheel, invisible hand, John Meriwether, John Nash: game theory, John von Neumann, Kenneth Arrow, Kevin Kelly, knowledge economy, light touch regulation, Long Term Capital Management, loss aversion, Mahatma Gandhi, market bubble, market clearing, market fundamentalism, means of production, Menlo Park, Mikhail Gorbachev, money: store of value / unit of account / medium of exchange, moral hazard, Myron Scholes, Naomi Klein, Nash equilibrium, new economy, oil shale / tar sands, oil shock, Pareto efficiency, Paul Samuelson, pets.com, popular electronics, price discrimination, price mechanism, prisoner's dilemma, profit maximization, purchasing power parity, QWERTY keyboard, Ralph Nader, RAND corporation, random walk, rent-seeking, Right to Buy, risk tolerance, road to serfdom, Ronald Coase, Ronald Reagan, second-price auction, shareholder value, Silicon Valley, Simon Kuznets, South Sea Bubble, Steve Jobs, telemarketer, The Chicago School, The Market for Lemons, The Nature of the Firm, the new new thing, The Predators' Ball, The Wealth of Nations by Adam Smith, Thorstein Veblen, total factor productivity, transaction costs, tulip mania, urban decay, Vilfredo Pareto, Washington Consensus, women in the workforce, yield curve, yield management

General Motors, which had for long defined and exemplified the modern corporation, came under acute pressure from the growth of global competi- {10} John Kay tion. General Electric, whose strategic planning systems had been the envy of other businesses, prospered through being quick to dismantle them. 2 European states and underdeveloped countries pursued policies of privatization and deregulation. The United States economy performed well in the 1990s. Business Week proclaimed the "new economy": technology had transformed America's long-term growth potential. With the aid of Blootnberg television, this strong economic performance was translated into an extraordinary stock market boom. In 1996, the chairman of the Federal Reserve Board, Alan Greenspan, warned of "irrational exuberance." As he spoke the valuation of stocks was at the highest level ever recorded in American history-surpassing the records of 1929.

But the measurement ofGDP and the framework of national income accounts should be seen primarily as a way of organizing the information we have about the national economy, rather than as an attempt to measure welfare. It is difficult to maintain this position because economic data is widely used in political debate. In the 1990s the Bureau of Economic Analysis, which compiles the U.S. national accounts, was under obvious pressure, particularly from Chairman Greenspan, to support the assertions then made about the "new economy." On the other side of the political fence, those who argue that GDP should account for environmental costs or unpaid work are more concerned to make environmental or feminist arguments than to enhance the integrity of national accounting frameworks. GDP and other economic measurements are likely to be of greatest use to a wide range of users if as far as is possible the measurement relates to issues of objective fact.

Diversity is itself an important feature of economic life. In the decade since the Cold War ended, admiring eyes have switched from Japan, whose own boom ended with its own bubble in the late 1980s, to Germany, whose successful social market economy struggled with the burden of reunification in the 1990s. Attention was diverted to the Asian tigers-Singapore, Korea, Hong Kong-but ended with the financial crisis of 1997. And since then America's New Economy has occupied center stage. In superficial economic commentary, trends of a few years or even months are projected into an indefinite future with the transience of designer fashions. The really important observation is that differences in economic performance and experience among rich states are small and temporary, while differences between rich and poor states are large and enduring. Any theory of the relative success and failure of economic systems must explain this central fact.


pages: 450 words: 113,173

The Age of Entitlement: America Since the Sixties by Christopher Caldwell

1960s counterculture, affirmative action, Affordable Care Act / Obamacare, anti-communist, Bernie Sanders, big data - Walmart - Pop Tarts, blue-collar work, Cass Sunstein, choice architecture, computer age, crack epidemic, crony capitalism, Daniel Kahneman / Amos Tversky, David Attenborough, desegregation, disintermediation, disruptive innovation, Edward Snowden, Erik Brynjolfsson, Ferguson, Missouri, financial deregulation, financial innovation, Firefox, full employment, George Gilder, global value chain, Home mortgage interest deduction, illegal immigration, immigration reform, informal economy, Jeff Bezos, John Markoff, Kevin Kelly, libertarian paternalism, Mark Zuckerberg, Martin Wolf, mass immigration, mass incarceration, mortgage tax deduction, Nate Silver, new economy, Norman Mailer, post-industrial society, pre–internet, profit motive, reserve currency, Richard Thaler, Robert Bork, Robert Gordon, Robert Metcalfe, Ronald Reagan, Rosa Parks, Silicon Valley, Skype, South China Sea, Steve Jobs, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transatlantic slave trade, transcontinental railway, War on Poverty, Whole Earth Catalog, zero-sum game

This meant that conflict, when it eventually came, would be constitutional conflict, with all the gravity that the adjective “constitutional” implies. 7 Winners Outsourcing and global value chains—Politicized lending and the finance crisis—Civil rights as a ruling-class cause—Google and Amazon as governments in embryo—Eliot Spitzer, Edward Snowden, and surveillance—The culture of internet moguls—The affinity between high tech and civil rights—The rise of philanthropy—Obama: governing without government—Nudge and behavioral economics—From gay rights to gay marriage—Windsor: the convergence of elites—Obergefell: triumph of the de facto constitution It took a long time for Americans to realize that the New Economy was a new economy. They were accustomed to marketing hype. When politicians used the term “New Economy,” it was easy for voters to assume it was only a jazzed-up way of describing the process, familiar for centuries, by which mechanization was introduced into certain industrial tasks, creating limited short-term sectorial disruptions but offering rewards to those trained in the new technology. The globalization of the division of labor that gathered speed in the 1980s was more thoroughgoing.

Different things would be made in different places and by different people altogether, and the American social structure would be upended. Certain things would no longer be made in America at all. The country would therefore become an economic part rather than an economic whole, rendering nonsensical, at least for a while, all kinds of inherited cultural and political beliefs about sovereignty, national independence, and social cohesion. In this sense the New Economy was like the new constitution. Over the fifty years leading up to the election of 2016, those who found ways to use the newly unleashed powers flourished. Those who continued to believe they could trust in old traditions, or vote their way to the country they wanted, lost ground. Outsourcing and global value chains The high wages of industrial workforces in Western countries had once been invulnerable, because the capital-owning part of an economy was bound by the laws of the land and the laws of economics to the fate of its workforce.

Now the United States was operating in a larger, global economy. At a time when international competition was bidding down the price of industrial handwork, corporations retooled in order to capture the global economy’s ever-more-lucrative brainwork: the design, the marketing, the public relations. The problem was, and remains, that only a small fraction of people in any society is equipped to do brainwork. Big though the New Economy may have looked to American executives, professors, and philanthropists, American workers experienced it as smaller than the old one. They were in a catch-22: Until they consented to the outsourcing of their jobs, they were called pampered obstructionists, and berated; once their jobs had left and their consent was no longer needed, they were called nostalgic losers, and forgotten. Bill Clinton capitalized on the resulting unease.


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The Retreat of Western Liberalism by Edward Luce

"Robert Solow", 3D printing, affirmative action, Airbnb, basic income, Berlin Wall, Bernie Sanders, Boris Johnson, Branko Milanovic, Bretton Woods, business cycle, call centre, carried interest, centre right, Charles Lindbergh, cognitive dissonance, colonial exploitation, colonial rule, computer age, corporate raider, cuban missile crisis, currency manipulation / currency intervention, Dissolution of the Soviet Union, Doha Development Round, Donald Trump, double entry bookkeeping, Erik Brynjolfsson, European colonialism, everywhere but in the productivity statistics, Fall of the Berlin Wall, Francis Fukuyama: the end of history, future of work, George Santayana, gig economy, Gini coefficient, global pandemic, global supply chain, illegal immigration, imperial preference, income inequality, informal economy, Internet of things, Jaron Lanier, knowledge economy, lateral thinking, liberal capitalism, Marc Andreessen, Mark Zuckerberg, Martin Wolf, mass immigration, means of production, Monroe Doctrine, moral panic, more computing power than Apollo, mutually assured destruction, new economy, New Urbanism, Norman Mailer, offshore financial centre, one-China policy, Peace of Westphalia, Peter Thiel, plutocrats, Plutocrats, precariat, purchasing power parity, reserve currency, reshoring, Richard Florida, Robert Gordon, Ronald Reagan, Second Machine Age, self-driving car, sharing economy, Silicon Valley, Skype, Snapchat, software is eating the world, South China Sea, Steve Jobs, superstar cities, telepresence, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tyler Cowen: Great Stagnation, universal basic income, unpaid internship, Washington Consensus, We are the 99%, We wanted flying cars, instead we got 140 characters, white flight, World Values Survey, Yogi Berra

Tyler Cowen has coined a new acronym to replace Nimbys (Not in My Backyard): Bananas (Build Absolutely Nothing Anywhere Near Anything).50 Such risk aversion breeds its own failure. So deeply rooted is gentrification that Richard Florida has now modified his widely acclaimed thesis about the rise of the creative classes. Cities are becoming too successful for their own good. Until recently, he believed they would be the engine rooms of the new economy, embracing the diversity necessary to attract talent. That has certainly happened. Gay pride parades seem to get larger every year. A thousand multicultural flowers are blooming. Yet in squeezing out income diversity, the new urban economies are also shutting off the scope for serendipity. The West’s global cities are like tropical islands surrounded by oceans of resentment. Florida’s latest book is called The New Urban Crisis.

In 2014, it bought WhatsApp, with fifty-five employees, for $19 billion, at a staggering $345 million per employee.54 Such riches are little comfort to the thousands of engineers who cannot find work. Facebook’s data servers are now managed by Cyborg, a software program. It requires one human technician for every twenty thousand computers. Almost any job that involves sitting in front of a screen and manipulating information is disappearing, or will do soon. Software can now drive cars and mark student essays. By skewing the gains of the new economy to a few, robots also weaken the chief engine of growth: middle-class demand. As labour becomes pricier relative to machines, spending power falls. The US economy produces more than a third more today than it did in 1998 with the same-sized labour force and a significantly larger population. It still makes sense for people to obtain degrees. Graduates earn more than those who have completed only high school.

As the real value of pensions and social security goes down, the pressure to postpone retirement grows. Again, we should be careful not to generalise: some older people are working because they enjoy it. Yet we should not romanticise what is happening either. The age of automation is making labour increasingly dispensable, so companies are constantly on the lookout for ways to slim down. The new economy has created digital platforms that enable people to offer their services online. Yet what they find is generally far less secure than what they lost. Such work does not provide healthcare or matching retirement contributions. Nor does it always pay. Almost three-quarters of independent workers in the US report serious difficulties in chasing up what they are owed. Average arrears were $6000 – a large sum for those on the edge.


Speaking Code: Coding as Aesthetic and Political Expression by Geoff Cox, Alex McLean

4chan, Amazon Mechanical Turk, augmented reality, bash_history, bitcoin, cloud computing, computer age, computer vision, crowdsourcing, dematerialisation, Donald Knuth, Douglas Hofstadter, en.wikipedia.org, Everything should be made as simple as possible, finite state, Gödel, Escher, Bach, Jacques de Vaucanson, Larry Wall, late capitalism, means of production, natural language processing, new economy, Norbert Wiener, Occupy movement, packet switching, peer-to-peer, Richard Stallman, Ronald Coase, Slavoj Žižek, social software, social web, software studies, speech recognition, stem cell, Stewart Brand, The Nature of the Firm, Turing machine, Turing test, Vilfredo Pareto, We are Anonymous. We are Legion, We are the 99%, WikiLeaks

., 178. 107. radioqualia (Adam Hyde and Honor Harger), Free Radio Linux (2001); see http://www .radioqualia.net/documentation/frl/index.html. 108. Simon Yuill, “All Problems of Notation Will Be Solved by the Masses,” Mute (February 2008); available at http://www.metamute.org/en/All-Problems-of-Notation-Will-be-Solved-by -the-Masses. 109. Virno, A Grammar of the Multitude, 90. 110. In Christian Marazzi, Capital and Language: From the New Economy to the War Economy, trans. Gregory Conti (Los Angeles: Semiotext(e), 2008), 156. 111. Ibid., 34. 112. Berardi, The Soul at Work, 22. 113. Ibid., 117–118. Berardi refers to this as the “psychopathology of desire,” further developing Guattari’s use of desire as a field of operation, open to capture by Disney or Microsoft as well as by social movements. 114. Ibid., 90. 115. Franco “Bifo” Berardi, Precarious Rhapsody: Semiocapitalism and the Pathologies of the PostAlpha Generation (London: Minor Compositions, 2009), 43. 116.

Posted on consumerist.com and cited in Jessica E. Vascellaro, “Facebook’s About-Face on Data,” Wall Street Journal, 19 February 2009; available at http://online.wsj.com/article/ SB123494484088908625.html#ixzz1dCjqZGSk. Facebook’s Terms of Service are available at http://www.facebook.com/legal/terms. 91. Bauwens, “The Social Web and Its Social Contracts.” 92. See Thomas H. Davenport and John C. Beck, The Attention Economy: Understanding the New Economy of Business (Boston: Harvard Business School Press, 2001). 93. The figures are taken from the Financial Times, 6 January 2011, and from Facebook’s publicity material. Both are quoted in Adam Avidsson and Elanor Colleoni, “Value in Informational Capitalism and on the Internet: A Reply to Christian Fuchs,” Social Science Research Network, 28 February 2011; available at http://papers.ssrn.com/sol3/papers.cfm?

The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.” Available at http://en.wikipedia.org/wiki/Information_wants_to_be_free. 33. See Thomas H. Davenport and John C. Beck, The Attention Economy: Understanding the New Economy of Business (Boston: Harvard Business School Press, 2001). 34. Berardi, Precarious Rhapsody, 113. 35. Ibid., 54. 36. Available at http://www.digitalcraft.org/iloveyou/loveletter_reading.htm. The virus source code is available at http://www.cexx.org/loveletter.htm. 37. The virus also inspired the exhibition “I Love You [rev.eng],” curated by digitalcraft.org/ Franziska Nori in 2002, at the Museum für angewandte Kunst in Frankfurt am Main.


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Joel on Software by Joel Spolsky

AltaVista, barriers to entry, c2.com, commoditize, George Gilder, index card, Jeff Bezos, knowledge worker, Metcalfe's law, Mitch Kapor, Network effects, new economy, PageRank, Paul Graham, profit motive, Robert X Cringely, shareholder value, Silicon Valley, Silicon Valley startup, six sigma, slashdot, Steve Ballmer, Steve Jobs, the scientific method, thinkpad, VA Linux, web application

But wait, that's not even the amusing part; the amusing part was watching the worst business plans fail, as their stock went from 316 to 3/16. Take that, new economy blabbermouths! Ah, the schadenfreudef. Ah, the glee, when once again, Wired magazine proves that as soon as it puts something on the cover, that thing will be proven to be stupid and wrong within a few short months. And with this New Economy thing, Wired really blew it, because they should have known by then what a death kiss their cover was for any technology or company or meme, after years of touting smell-o-rama and doomed game companies and how PointCast was going to replace the Web,2 no, wait, PointCast already replaced the Web, in March 1997. But they tempted fate anyway, and didn't just put the New Economy on the cover, they devoted the whole goddamn issue to the New Economy,3 thus condemning the NASDAQ to plummet like a sheep learning to fly. __________ 2.

We're adding features we forgot about that became obviously necessary. And we're getting closer to shipping! Hurrah! And thankfully, we no longer have to contend with 37 companies, each with $25 million in VC, competing against us by giving away their product for free in exchange for agreeing to have a big advertisement tattooed on your forehead. In the post-new economy, everybody is trying to figure out how much they can get away with charging. There's nothing wrong with the post-new economy, if you're smart. But all the endless news about the "dot coma" says more about the lack of creativity of business press editors than anything else. Sorry, fuckedcompany.com, it was funny for a month or so, now it's just pathetic. We'll focus on improving our product, and we'll focus on staying in business, by listening to our customers and eating our own dog food, instead of flying all over the country trying to raise more venture capital.

See also Windows bill presentment system blunders business model management strategies–2nd master programmers–2nd opposing forces inside–2nd program managers–2nd Microsoft Project–2nd Microsoft Typography group mistakes in business strategies in programming questions money, substituting for time–2nd, 3rd monopolies, transition tipping points for–2nd mood swings morale and performance reviews Mozilla program completion of cross-platform problem in delays in, 2nd as open source size of switching to MSDN Magazine Camp at Microsoft–2nd victories of–2nd MSN Auctions site multiple-person interviews multitasking–2nd Murphy's Law week frozen pipes Linux server failure–2nd web server down–2nd Murray, Mike mystrcat function myths 80/20–2nd testers–2nd Unicode–2nd N Naked Chef–2nd native facilities with Java negative performance reviews .NET backward compatibility of for cell phones cross-language strategy hype for–2nd memory management in–2nd products using runtimes in–2nd, 3rd–4th strategy for moving to–2nd as upgrade product–2nd white paper for Netscape. See also Mozilla program mentoring in open sources for–2nd rewriting from scratch–2nd, 3rd Netscape Defense–2nd network effects network libraries network software network transparency–2nd neutralizing bozos–2nd Never Rewrite From Scratch rule .NET violation of Netscape example–2nd New Economy NFS-mounted drives, home directories on Nielsen, Jakob NIH (Not-Invented-Here) syndrome–2nd no-design idea, 2nd nongoals in functional specifications, 2nd nontechnical management types, dealing with–2nd nontraditional workers as testers Norton, Peter Not-Invented-Here (NIH) syndrome–2nd null characters null-terminated Pascal strings O object-oriented programming Oddpost application OEM character set–2nd old code, reusing benefits of–2nd vs.


The Metropolitan Revolution: How Cities and Metros Are Fixing Our Broken Politics and Fragile Economy by Bruce Katz, Jennifer Bradley

3D printing, additive manufacturing, Affordable Care Act / Obamacare, British Empire, business climate, carbon footprint, clean water, cleantech, collapse of Lehman Brothers, deindustrialization, demographic transition, desegregation, double entry bookkeeping, edge city, Edward Glaeser, global supply chain, immigration reform, income inequality, industrial cluster, intermodal, Jane Jacobs, jitney, Kickstarter, knowledge economy, lone genius, longitudinal study, Mark Zuckerberg, Masdar, megacity, Menlo Park, Moneyball by Michael Lewis explains big data, Network effects, new economy, New Urbanism, Occupy movement, place-making, postindustrial economy, purchasing power parity, race to the bottom, Richard Florida, Shenzhen was a fishing village, Silicon Valley, smart cities, smart grid, sovereign wealth fund, the built environment, The Death and Life of Great American Cities, the market place, The Spirit Level, Tony Hsieh, too big to fail, trade route, transit-oriented development, urban planning, white flight

In his 2012 TED talk, “Be the Entrepreneur of Your Own Life,” the venture capitalist Reid Hoffman, cofounder of LinkedIn, extolled the power of “network literacy,” which is, he said, “absolutely critical to how we’ll navigate the world.” He continued, “In a networked age, identity is not so simply determined. Your identity is actually multivariate, distributed, and partly out of your control. Who you know shapes who you are.”62 Northeast Ohio’s efforts to use networks to bring about a new economy—built on the foundations of its old economy—are aligned with powerful social, economic, and cultural forces. This feeling of alignment motivates people like Chris Thompson to go to all those meetings and bring all those doughnuts. He believes that his work and the work of the Fund for Our Economic Future reflects “the civic challenge of our time. We live in an era where power is diffuse and value is created through networks built on trust, not hierarchy.

Second, the launch of M1 Rail exemplifies the collaborative spirit and integrated nature of economy shaping and place making at the heart of the metropolitan revolution. Detroit’s revival is being inspired, accelerated, and supported by an intricate web of philanthropic and business leaders and a remarkable set of nonprofit and quasi-public intermediaries that are painstakingly connecting the dots between hundreds of separate actions and transactions. The New Economy Initiative for Southeast Michigan— a $100 million consortium of ten local and national foundations—is a major investor in Detroit’s midtown and downtown. Since its inception in 2007, the initiative has supported or created several investment funds for start-ups and provided capital for significant place-making infrastructure, particularly in TechTown in midtown and its surrounding area, and its grants have helped launch 417 new companies, create 6,700 jobs, and leverage $261 million in additional investment in start-up companies supported by its grantees.100 06-2151-2 ch6.indd 139 5/20/13 6:53 PM 140 THE RISE OF INNOVATION DISTRICTS Living Cities, another philanthropic consortium, has invested $22 million in the Woodward Corridor Initiative to “redensify” the corridor and realize the full potential of the transit investment.101 The Kresge Foundation alone committed $150 million over the next five years to implement the recommendations and strategies outlined in the Detroit Future City report, doubling down on the investments it has already made along the riverfront, in M1 Rail, in the planning for the Detroit Future City effort, and as part of both the New Economy Initiative and Living Cities.102 In 2011 the Henry Ford Health System, the Detroit Medical Center, and Wayne State University, along with state and philanthropic support, launched the Live Midtown initiative, which provides financial incentives for employees who move to the area and entices existing renters and homeowners to stay and reinvest.103 Based on the program’s success, a group of downtown corporations—Quicken Loans, Blue Cross Blue Shield, Compuware, Strategic Staffing Solutions, Marketing Associates, and DTE Energy—created the Live Downtown Initiative.

Since its inception in 2007, the initiative has supported or created several investment funds for start-ups and provided capital for significant place-making infrastructure, particularly in TechTown in midtown and its surrounding area, and its grants have helped launch 417 new companies, create 6,700 jobs, and leverage $261 million in additional investment in start-up companies supported by its grantees.100 06-2151-2 ch6.indd 139 5/20/13 6:53 PM 140 THE RISE OF INNOVATION DISTRICTS Living Cities, another philanthropic consortium, has invested $22 million in the Woodward Corridor Initiative to “redensify” the corridor and realize the full potential of the transit investment.101 The Kresge Foundation alone committed $150 million over the next five years to implement the recommendations and strategies outlined in the Detroit Future City report, doubling down on the investments it has already made along the riverfront, in M1 Rail, in the planning for the Detroit Future City effort, and as part of both the New Economy Initiative and Living Cities.102 In 2011 the Henry Ford Health System, the Detroit Medical Center, and Wayne State University, along with state and philanthropic support, launched the Live Midtown initiative, which provides financial incentives for employees who move to the area and entices existing renters and homeowners to stay and reinvest.103 Based on the program’s success, a group of downtown corporations—Quicken Loans, Blue Cross Blue Shield, Compuware, Strategic Staffing Solutions, Marketing Associates, and DTE Energy—created the Live Downtown Initiative.


pages: 246 words: 68,392

Gigged: The End of the Job and the Future of Work by Sarah Kessler

Affordable Care Act / Obamacare, Airbnb, Amazon Mechanical Turk, basic income, bitcoin, blockchain, business cycle, call centre, cognitive dissonance, collective bargaining, crowdsourcing, David Attenborough, Donald Trump, East Village, Elon Musk, financial independence, future of work, game design, gig economy, income inequality, information asymmetry, Jeff Bezos, job automation, law of one price, Lyft, Mark Zuckerberg, market clearing, minimum wage unemployment, new economy, payday loans, post-work, profit maximization, QR code, race to the bottom, ride hailing / ride sharing, Second Machine Age, self-driving car, shareholder value, sharing economy, Silicon Valley, Snapchat, TaskRabbit, Travis Kalanick, Uber and Lyft, Uber for X, uber lyft, union organizing, universal basic income, working-age population, Works Progress Administration, Y Combinator

Household income in the United States became noticeably more volatile between the early 1970s and the late 2000s,13 and a Federal Reserve study published in 2014 found that a third of American households experience volatile income swings, mostly due to unpredictable hours.14 In 2004, when the Los Angeles Times reported the results of a survey that followed 5,000 families for 40 years, it concluded that “a growing number of families have found themselves caught on a financial roller coaster ride, with their annual incomes taking increasingly wild leaps and plunges.”15 The paper compared the new economy to the stock market, with an unpredictable schedule of big payouts and big setbacks for workers. This was a theme park ride that few people enjoyed. Labor leader David Rolf and venture capitalist Nick Hanauer, writing in the journal Democracy, explained why: Economic security is what frees us from the fear that one job loss, one illness—one economic downturn amidst a business cycle guaranteed to produce economic downturns—could cost us our home, our car, our family, and our social status.

“If all these critiques [of Mechanical Turk] are true,” Trebor remembers the worker saying, “then why don’t we build our own platform?” The worker was Kristy. After the disappointment of Dynamo, the online organizing platform for Mechanical Turk workers Kristy had helped build, she had come to the conclusion that the only way to make sure the interests of crowd workers were considered was to have workers run the platform. To bring an old idea—cooperatives—into the new economy. Trebor agreed. It was an idea around which he eventually based a book and a conference that was attended by 1,500 people.2 He named it “platform cooperativism.” Typical arguments against cooperatives are that they are slow—voting on decisions takes time—and that they lack the means to market themselves. But, Kristy and Trebor both argued, technology could solve some of these problems. Voting could take place electronically, which would make it faster.

December 7, 2015. https://newsroom.uber.com/driver-partner-survey/. 6   Quoted in Hatton, Erin. The Rise of the Permanent Temp Economy. New York Times. January 26, 2013. https://opinionator.blogs.nytimes.com/2013/01/26/the-rise-of-the-permanent-temp-economy/. 7   Dey, Matthew, Susan Houseman, and Anne Polivka. What Do We Know about Contracting Out in the United States? Evidence from Household and Establishment Surveys. In Labor in the New Economy, eds. Katharine G. Abraham, James R. Spletzer, and Michael Harper. University of Chicago Press, October 2010. 8   Manyika, James, Susan Lund, Jacques Bughin, Kelsey Robinson, Jan Mischke, and Deepa Mahajan. Independent Work: Choice, Necessity, and the Gig Economy. McKinsey Global Institute. October 2016. 9   General Accounting Office. Contingent Workforce: Size, Characteristics, Earnings, and Benefits, GAO-15-168R.


pages: 299 words: 91,839

What Would Google Do? by Jeff Jarvis

23andMe, Amazon Mechanical Turk, Amazon Web Services, Anne Wojcicki, barriers to entry, Berlin Wall, business process, call centre, cashless society, citizen journalism, clean water, commoditize, connected car, credit crunch, crowdsourcing, death of newspapers, different worldview, disintermediation, diversified portfolio, don't be evil, fear of failure, Firefox, future of journalism, G4S, Google Earth, Googley, Howard Rheingold, informal economy, inventory management, Jeff Bezos, jimmy wales, Kevin Kelly, Mark Zuckerberg, moral hazard, Network effects, new economy, Nicholas Carr, old-boy network, PageRank, peer-to-peer lending, post scarcity, prediction markets, pre–internet, Ronald Coase, search inside the book, Silicon Valley, Skype, social graph, social software, social web, spectrum auction, speech recognition, Steve Jobs, the medium is the message, The Nature of the Firm, the payments system, The Wisdom of Crowds, transaction costs, web of trust, WikiLeaks, Y Combinator, Zipcar

Google Rules New Relationship • Give the people control and we will use it • Dell hell • Your worst customer is your best friend • Your best customer is your partner New Architecture • The link changes everything • Do what you do best and link to the rest • Join a network • Be a platform • Think distributed New Publicness • If you’re not searchable, you won’t be found • Everybody needs Googlejuice • Life is public, so is business • Your customers are your ad agency New Society • Elegant organization New Economy • Small is the new big • The post-scarcity economy • Join the open-source, gift economy • The mass market is dead—long live the mass of niches • Google commodifies everything • Welcome to the Google economy New Business Reality • Atoms are a drag • Middlemen are doomed • Free is a business model • Decide what business you’re in New Attitude • There is an inverse relationship between control and trust • Trust the people • Listen New Ethic • Make mistakes well • Life is a beta • Be honest • Be transparent • Collaborate • Don’t be evil New Speed • Answers are instantaneous • Life is live • Mobs form in a flash New Imperatives • Beware the cash cow in the coal mine • Encourage, enable, and protect innovation • Simplify, simplify • Get out of the way If Google Ruled the World Media • The Google Times: Newspapers, post-paper • Googlewood: Entertainment, opened up • GoogleCollins: Killing the book to save it Advertising • And now, a word from Google’s sponsors Retail • Google Eats: A business built on openness • Google Shops: A company built on people Utilities • Google Power & Light: What Google would do • GT&T: What Google should do Manufacturing • The Googlemobile: From secrecy to sharing • Google Cola: We’re more than consumers Service • Google Air: A social marketplace of customers • Google Real Estate: Information is power Money • Google Capital: Money makes networks • The First Bank of Google: Markets minus middlemen Public Welfare • St.

A large proportion of its ad revenue also comes from Google. About.com might as well be a division of Google, but it’s not. It’s merely built on Google’s platform. About.com is owned by The New York Times Company, which bought it in 2005 for $410 million (and hired me to consult there). I’ll confess I was dubious about the acquisition when it occurred, but I was wrong. Today, as papers struggle in the new economy, About.com is one of the rare bright spots in any newspaper company’s P&L. About.com at first wanted to compete with Google or even to be Google. Started by Scott Kurnit as The Mining Company in 1997—a year before Google was incorporated—its goal was to provide a human-powered guide to the internet. But as Yahoo also learned, that was hard and expensive, especially as the internet grew so unfathomably large.

We also have new ethics and attitudes that spring from this new organization and change society in ways we cannot yet see, with openness, generosity, collaboration, efficiency. We are using the internet’s connective tissue to leap over borders—whether they surround countries or companies or demographics. We are reorganizing society. This is Google’s—and Facebook’s and craigslist’s—new world order. New Economy Small is the new big The post-scarcity economy Join the open-source, gift economy The mass market is dead—long live the mass of niches Google commodifies everything Welcome to the Google economy Small is the new big Mind you, big is still big. Wal-Mart is the largest company on earth. Bigbox stores such as Home Depot continue to drive mom-and-pop hardware shops out of business. Media companies are conglomerating.


pages: 327 words: 90,542

The Age of Stagnation: Why Perpetual Growth Is Unattainable and the Global Economy Is in Peril by Satyajit Das

"Robert Solow", 9 dash line, accounting loophole / creative accounting, additive manufacturing, Airbnb, Albert Einstein, Alfred Russel Wallace, Anton Chekhov, Asian financial crisis, banking crisis, Berlin Wall, bitcoin, Bretton Woods, BRICs, British Empire, business cycle, business process, business process outsourcing, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, Clayton Christensen, cloud computing, collaborative economy, colonial exploitation, computer age, creative destruction, cryptocurrency, currency manipulation / currency intervention, David Ricardo: comparative advantage, declining real wages, Deng Xiaoping, deskilling, disintermediation, disruptive innovation, Downton Abbey, Emanuel Derman, energy security, energy transition, eurozone crisis, financial innovation, financial repression, forward guidance, Francis Fukuyama: the end of history, full employment, gig economy, Gini coefficient, global reserve currency, global supply chain, Goldman Sachs: Vampire Squid, happiness index / gross national happiness, Honoré de Balzac, hydraulic fracturing, Hyman Minsky, illegal immigration, income inequality, income per capita, indoor plumbing, informal economy, Innovator's Dilemma, intangible asset, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, John Maynard Keynes: technological unemployment, Kenneth Rogoff, knowledge economy, knowledge worker, light touch regulation, liquidity trap, Long Term Capital Management, low skilled workers, Lyft, Mahatma Gandhi, margin call, market design, Marshall McLuhan, Martin Wolf, Mikhail Gorbachev, mortgage debt, mortgage tax deduction, new economy, New Urbanism, offshore financial centre, oil shale / tar sands, oil shock, old age dependency ratio, open economy, passive income, peak oil, peer-to-peer lending, pension reform, plutocrats, Plutocrats, Ponzi scheme, Potemkin village, precariat, price stability, profit maximization, pushing on a string, quantitative easing, race to the bottom, Ralph Nader, Rana Plaza, rent control, rent-seeking, reserve currency, ride hailing / ride sharing, rising living standards, risk/return, Robert Gordon, Ronald Reagan, Satyajit Das, savings glut, secular stagnation, seigniorage, sharing economy, Silicon Valley, Simon Kuznets, Slavoj Žižek, South China Sea, sovereign wealth fund, TaskRabbit, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, the market place, the payments system, The Spirit Level, Thorstein Veblen, Tim Cook: Apple, too big to fail, total factor productivity, trade route, transaction costs, uber lyft, unpaid internship, Unsafe at Any Speed, Upton Sinclair, Washington Consensus, We are the 99%, WikiLeaks, Y2K, Yom Kippur War, zero-coupon bond, zero-sum game

Gordon, “Is US Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” Centre for Economic Policy Research, Policy Insight, no. 63 (September 2012). 10 Robert Salow, “We'd Better Watch Out,” New York Times Book Review, 12 July 1987. 11 See Founders Fund, “What Happened to the Future?” www.foundersfund.com/the-future. 12 Andy Xie, “Mirage of the ‘New Economy,’” Marketwatch, 26 March 2014. www.marketwatch.com/story/mirage-of-the-new-economy-2014-03-26. 13 Suzanne Woolley, “Amazon May Have Just Created a Weapon of Mass Consumption,” Financial Times, 21 June 2014. 14 Jill Lepore, “The Disruption Machine: What the Gospel of Innovation Gets Wrong,” New Yorker, 23 June 2014. www.newyorker.com/reporting/2014/06/23/140623fa_fact_lepore?currentPage=all. 15 Alfred North Whitehead, Science and the Modern World, Macmillan, 1925, p. 96. 16 Jonathan Huebner, “A Possible Declining Trend for Worldwide Innovation,” Technological Forecasting & Social Change, vol. 72, no. 8 (2005), pp. 980–86. 17 Mentioned in a conference about automation held by the UAW–CIO union in November 1954. http://quoteinvestigator.com/2011/11/16/robots-buy-cars/. 18 John Steinbeck, The Grapes of Wrath, Penguin (1939) 1992, p. 44. 5.

One commentator wryly dismissed social networking sites as “just places for people to express their narcissism cheaply.”12 In June 2014, Amazon announced its latest innovation, a smartphone that uses image-recognition technology to allow customers to purchase products by pointing it at more than 70 million objects in its online store. Designed to minimize barriers to spending, it exemplifies the instantaneous gratification that passes for innovation in the new economy. Critics have branded it a weapon of mass consumption that allows you to point and shoot yourself in the foot.13 Many new technologies displace existing industries, limiting the effect on growth and productivity. Recent innovations have focused on marketing and distributing existing goods and services, rather than on creating entirely new industries. Smartphones and tablets have cannibalized desktop and laptop computers.

Emerging nations combined their cheap labor and local or imported resources with foreign technology or capital to manufacture and export goods and services to developed countries. Improvements in technology, telecommunications, and transport allowed cheaper emerging nations to compete with advanced economies. One-off events were important. The Y2K software problems fueled the development of India's software industry. The new economy was centered on China, now the world's factory, exporting around 50 percent of its output. It imported resources and parts that were then assembled or processed and shipped out again. Smaller emerging economies, especially in Asia, became integrated into new Sino-centric global supply chains. Consultant David Rothkopf highlighted the uneven balance of power within emerging markets: “Without China, the BRICs are just the BRI, a bland, soft cheese that is primarily known for the whine [sic] that goes with it…”8 China was now the largest purchaser of iron ore and other metals, and one of the biggest purchasers of cotton and soybeans.


pages: 457 words: 125,329

Value of Everything: An Antidote to Chaos The by Mariana Mazzucato

"Robert Solow", activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, Airbnb, bank run, banks create money, Basel III, Berlin Wall, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, business cycle, butterfly effect, buy and hold, Buy land – they’re not making it any more, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, carried interest, cleantech, Corn Laws, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, debt deflation, European colonialism, fear of failure, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, financial repression, full employment, G4S, George Akerlof, Google Hangouts, Growth in a Time of Debt, high net worth, Hyman Minsky, income inequality, index fund, informal economy, interest rate derivative, Internet of things, invisible hand, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, knowledge economy, labour market flexibility, laissez-faire capitalism, light touch regulation, liquidity trap, London Interbank Offered Rate, margin call, Mark Zuckerberg, market bubble, means of production, money market fund, negative equity, Network effects, new economy, Northern Rock, obamacare, offshore financial centre, Pareto efficiency, patent troll, Paul Samuelson, peer-to-peer lending, Peter Thiel, profit maximization, quantitative easing, quantitative trading / quantitative finance, QWERTY keyboard, rent control, rent-seeking, Sand Hill Road, shareholder value, sharing economy, short selling, Silicon Valley, Simon Kuznets, smart meter, Social Responsibility of Business Is to Increase Its Profits, software patent, stem cell, Steve Jobs, The Great Moderation, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, transaction costs, two-sided market, very high income, Vilfredo Pareto, wealth creators, Works Progress Administration, zero-sum game

Keller, ‘Explaining the transformation in the US innovation system: The impact of a small government program', Socioeconomic Review 11(4) (2013), pp. 629-56: https://doi.org/10.1093/ser/mws021 8. S. W. Leslie, The Cold War and American Science: The Military-Industrial-Academic Complex at MIT and Stanford (New York: Columbia University Press, 1993). 9. See W. Lazonick, Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (Kalamazoo, MI: W. E. Upjohn Institute for Employment Research, 2009), ch. 2: doi: https://doi.org/10.17848/9781441639851 10. Business Week, 1960, cited in H. Lazonick, Sustainable Prosperity in the New Economy? Business Organization and High-tech Employment in the United States (Kalamazoo, MI: Upjohn Press, 2009), p. 79. 11. W. Lazonick and M. Mazzucato, ‘The risk-reward nexus in the innovation-inequality relationship: Who takes the risks? Who gets the rewards?'

Silicon Valley's entrepreneurs are often viewed as heroic do-gooders. Indeed, Google's stated mission is Do No Evil. In April 2016 a front cover of the Economist showed the Facebook founder Mark Zuckerberg dressed like a Roman emperor under the headline ‘Imperial Ambition'. Meanwhile, innovation is seen as the new force in modern capitalism, not just in Silicon Valley but globally. Phrases like the ‘new economy', ‘the innovation economy', ‘the information society' or ‘smart growth' encapsulate the idea that it is entrepreneurs, garage tinkerers and their patents that unleash the ‘creative destruction' from which the jobs of the future come. We are told to welcome the likes of Uber and Airbnb because they are the forces of renewal that sweep away the old incumbents, whether black cabs in London or ‘dinosaur' hotel chains like Hilton.

United Nations, A System of National Accounts and Supporting Tables , Studies in Methods, series F, no. 2, rev. 1 (New York, 1953). 13. http://unstats.un.org/unsd/nationalaccount/docs/SNA2008.pdf 14. SNA 2008, p. 2. 15. Ibid. 16. P. S. Sunga, ‘An alternative to the current treatment of interest as transfer in the United Nations and Canadian systems of national accounts', Review of Income and Wealth, 30(4) (1984), p. 385: http://doi.org/10.1111/j.1475-4991.1984.tb00487.x 17. B. R. Moulton, The System of National Accounts for the New Economy: What Should Change? (Washington DC: Bureau of Economic Analysis, US Dept. of Commerce, 2003), p. 17: http://www.bea.gov/about/pdf/sna_neweconomy_1003.pdf 18. The development of income and growth estimation is sometimes depicted as a purely empirical affair that is barely influenced by theory (R. Reich, The Work of Nations: Preparing Ourselves for 21st-Century Capitalism (New York: Knopf, 1991)).


Financial Statement Analysis: A Practitioner's Guide by Martin S. Fridson, Fernando Alvarez

business cycle, corporate governance, credit crunch, discounted cash flows, diversification, Donald Trump, double entry bookkeeping, Elon Musk, fixed income, information trail, intangible asset, interest rate derivative, interest rate swap, negative equity, new economy, offshore financial centre, postindustrial economy, profit maximization, profit motive, Richard Thaler, shareholder value, speech recognition, statistical model, time value of money, transaction costs, Y2K, zero-coupon bond

Their valuations derived from business models purporting to promise vast profits far in the future. Building up subscriber bases through heavy consumer advertising was an expensive proposition, but one day, investors believed, a large, loyal following would translate into rich revenue streams. Much of the dot-coms’ stock market value disappeared during the tech wreck of 2000, but the perceived mismatch between the information-intensive New Economy and traditional notions of assets persisted. Prominent accounting theorists argued that financial reporting practices rooted in an era more dominated by heavy manufacturing grossly understated the value created by research and development outlays, which GAAP was resistant to capitalizing. They observed further that traditional accounting generally permitted assets to rise in value only if they were sold.

In the fourth quarter of 2000, Sherwin-Williams recognized an impairment charge of $352 million ($293.6 million after taxes). Most of the write-off represented a reduction of goodwill that the manufacturer of paint and related products had created through a string of acquisitions. Even after the huge hit, goodwill represented 18.8 percent of Sherwin-Williams's assets and accounted for 47.9 percent of shareholders’ equity. Both Old Economy and New Economy companies, in short, are vulnerable to a sudden loss of stated asset value. Therefore, users of financial statements should not assume that balance sheet figures invariably correspond to the current economic worth of the assets they represent. A more reasonable expectation is that the numbers have been calculated in accordance with GAAP. The trick is to understand the relationship between these accounting conventions and reality.

To be sure, if a company wrote off a billion dollars’ worth of goodwill, its ratio of assets to liabilities declined. Its ratio of tangible assets to liabilities did not change, however. The rating agencies monitored both ratios but had customarily attached greater significance to the version that ignored intangible assets such as goodwill. HOW GOOD IS GOODWILL? By maintaining a skeptical attitude to the value of intangible assets throughout the New Economy excitement of the late nineties, Moody's and Standard & Poor's were bucking the trend. The more stylish view was that balance sheets constructed according to GAAP seriously understated the value of corporations in dynamic industries such as computer software and e-commerce. Their earning power, so the story went, derived from inspired ideas and improved methods of doing business, not from the bricks and mortar for which conventional accounting was designed.


pages: 356 words: 51,419

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle

asset allocation, backtesting, buy and hold, creative destruction, diversification, diversified portfolio, financial intermediation, fixed income, index fund, invention of the wheel, Isaac Newton, new economy, passive investing, Paul Samuelson, random walk, risk tolerance, risk-adjusted returns, Sharpe ratio, stocks for the long run, survivorship bias, transaction costs, Upton Sinclair, Vanguard fund, William of Occam, yield management, zero-sum game

For example, the returns provided to investors from 2008 to 2016 by 186 of the 200 largest equity funds were lower than the returns that they reported to investors! This lag was especially evident during the “new economy” craze of the late 1990s. Then, the fund industry organized more and more funds, usually funds that carried considerably higher risk than the stock market itself, and magnified the problem by heavily advertising the eye-catching past returns earned by the hottest funds. As the market soared, investors poured ever larger sums of money into equity funds. They invested a net total of only $18 billion in 1990 when stocks were cheap, but $420 billion in 1999 and 2000, when stocks were substantially overvalued (Exhibit 7.2). EXHIBIT 7.2 The Timing and Selection Penalties: Net Flow into U.S. Equity Funds What’s more, investors also overwhelmingly chose “new economy” funds, technology funds, and the hottest-performing growth funds, to the virtual exclusion of more conservative value-oriented funds.

If you put those two policies together and emphasize low-cost index funds—as so many advisers do—so much the better for the client. If you can avoid jumping on the bandwagon . . . And if professional investment consultants are wise enough—or lucky enough—to keep their clients from jumping on the latest and hottest bandwagon (for example, the tech-stock craze of the late 1990s, reflected in the mania for funds investing in “new economy” stocks), their clients may earn returns that easily surpass the disappointing returns achieved by fund investors as a group. Remember the additional shortfall of about one and one-half percentage points per year relative to the average equity fund that we estimated in Chapter 7? To remind you, the average nominal investor return came to just 6.3 percent per year during 1991–2016, despite a strong stock market in which a simple S&P 500 Index fund earned an annual return of 9.1 percent.

He was describing the so-called performance funds of the mid-1960s Go-Go era, in which a “new breed that had a spectacular knack for coming up with winners . . . [funds managed by] bright, energetic, young people who promised to perform miracles with other people’s money . . . [but] who have inevitably brought losses to their public in the end.” Graham could have as easily been presciently describing the hundreds of risky “new economy” mutual funds formed during the great technology-stock-driven bull market of the late 1990s, and the utter collapse in their asset values, far worse than the 50 percent market crash that followed. (See Exhibit 7.2 in Chapter 7.) “The real money in investment will have to be made . . . not out of buying and selling but of owning and holding securities . . . [for their] dividends and benefitting from their long-term increase in value.”


pages: 345 words: 75,660

Prediction Machines: The Simple Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans, Avi Goldfarb

"Robert Solow", Ada Lovelace, AI winter, Air France Flight 447, Airbus A320, artificial general intelligence, autonomous vehicles, basic income, Bayesian statistics, Black Swan, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, collateralized debt obligation, computer age, creative destruction, Daniel Kahneman / Amos Tversky, data acquisition, data is the new oil, deskilling, disruptive innovation, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, Google Glasses, high net worth, ImageNet competition, income inequality, information retrieval, inventory management, invisible hand, job automation, John Markoff, Joseph Schumpeter, Kevin Kelly, Lyft, Minecraft, Mitch Kapor, Moneyball by Michael Lewis explains big data, Nate Silver, new economy, On the Economy of Machinery and Manufactures, pattern recognition, performance metric, profit maximization, QWERTY keyboard, race to the bottom, randomized controlled trial, Ray Kurzweil, ride hailing / ride sharing, Second Machine Age, self-driving car, shareholder value, Silicon Valley, statistical model, Stephen Hawking, Steve Jobs, Steven Levy, strong AI, The Future of Employment, The Signal and the Noise by Nate Silver, Tim Cook: Apple, Turing test, Uber and Lyft, uber lyft, US Airways Flight 1549, Vernor Vinge, Watson beat the top human players on Jeopardy!, William Langewiesche, Y Combinator, zero-sum game

Freshly minted MBA graduates turned down lucrative traditional jobs to prospect on the web. As the effects of the internet began to spread across industries and up and down the value chain, technology advocates stopped referring to the internet as a new technology and began referring to it as the “New Economy.” The term caught on. The internet transcended the technology and permeated human activity at a fundamental level. Politicians, corporate executives, investors, entrepreneurs, and major news organizations started using the term. Everyone began referring to the New Economy. Everyone, that is, except economists. We did not see a new economy or a new economics. To economists, this looked like the regular old economy. To be sure, some important changes had occurred. Goods and services could be distributed digitally. Communication was easy. And you could find information with the click of a search button.

See also uncertainty AI canvas for, 134–138 AI’s impact on, 3 centrality of, 73–74 cheap prediction and, 29 complexity and, 103–110 decomposing, 133–140 on deployment timing, 184–187 elements of, 74–76, 134–138 experiments and, 99–100 fully automated, 111–119 human strengths in, 98–102 human weaknesses in prediction and, 54–58 judgment in, 74, 75–76, 78–81, 83–94, 96–97 knowledge in, 76–78 modeling and, 99, 100–102 predicting judgment and, 95–102 preferences and, 88–90 satisficing in, 107–109 work flow analysis and, 123–131 decision trees, 13, 78–81 Deep Genomics, 3 deep learning approach, 7, 13 back propagation in, 38 flexibility in, 36 to language translation, 26–27 security risks with, 203–204 DeepMind, 7–8, 183, 187, 222, 223 Deep Thinking (Kasporov), 63 demand management, 156–157 dependent variables, 45 deployment decisions, 184–187 deskilling, 192–193 deterministic programming, 38, 40 Didi, 219 disparate impact, 197 disruptive technologies, 181–182 diversity, 201–202 division of labor, 53–69 human/machine collaboration, 65–67 human weaknesses in prediction and, 54–58 machine weaknesses in prediction and, 58–65 prediction by exception and, 67–68 dog fooding, 184 drone weapons, 116 Dropbox, 190 drug discovery, 28, 134–138 Dubé, J. P., 93–94 Duke University Teradata Center, 35 earthquakes, 59–60 eBay, 199 economics, 3 of AI, 8–9 of cost reductions, 9–11 data collection and, 49–50 on externalities, 116–117 New Economy and, 10–11 economies of scale, 49–50, 215–217 Edelman, Ben, 196–197 education, income inequality and, 214 electricity, cost of light and, 11 emergency braking, automatic, 111–112 error, tolerance for, 184–186 ethical dilemmas, 116 Etzioni, Oren, 220 Europe, privacy regulation in, 219–220 exceptions, prediction by, 67–68 Executive Office of the US President, 222–223 experience, 191–193 experimentation, 88, 99–100 AI tool development and, 159–160 expert prediction, 55–58 externalities, 116–117 Facebook, 176, 190, 195–196, 215, 217 facial recognition, 190, 219–220 Federal Aviation Administration, 185 Federal Trade Commission, 195 feedback data, 43, 46 in decision making, 74–76, 134–138 experience and, 191–193 risks with, 204–205 financial crisis of 2008, 36–37 flexibility, 36 Forbes, Silke, 168–169 Ford, 123–134, 164 Frankston, Bob, 141, 164 fraud detection, 24–25, 27, 84–88, 91 Frey, Carl, 149 fulfillment industry, 105, 143–145 Furman, Jason, 213 Gates, Bill, 163, 210, 213, 221 gender discrimination, 196–198 Gildert, Suzanne, 145 Glozman, Ron, 53–54 Goizueta, Robert, 43 Goldin, Claudia, 214 Goldman Sachs, 125 Google, 7–8, 43, 50, 187, 215, 223 advertising, 176, 195–196, 198–199 AI-first strategy at, 179–180 AI tool development at, 160 anti-spam team sting, 202–203 bias in ads and, 195–196 China, 219 Inbox, 185, 187 market share of, 216–217 Now, 106 privacy policy, 190 search engine optimization and, 64 search tool, 19 translation service, 25–26 video content algorithm, 200 Waymo, 95 Waze and, 89–90 Grammarly, 96 Greece, ancient, 23 Griliches, Zvi, 159 Grove, Andy, 155 hackers, 200 Hacking, Ian, 40 Hammer, Michael, 123–134 Harford, Tim, 192–193 Harvard Business School cases, 141 Hawking, Stephen, 8, 210–211, 221 Hawkins, Jeff, 39 health insurance, 28 heart disease, diagnosing, 44–45, 47–49 Heifets, Abraham, 135, 136 Hemingway, Ernest, 25–26 heuristics, 55 Hinton, Geoffrey, 145 hiring, 58, 98 ZipRecruiter and, 93–94, 100 Hoffman, Mitchell, 58 homogeneity, data, 201–202 hotel industry, 63–64 Houston Astros, 161 Howe, Kathryn, 14 human resource (HR) management, 172–173 IBM’s Watson, 146 identity verification, 201, 219–220 iFlytek, 26–27 if-then logic, 91, 104–109 image classification, 28–29 ImageNet, 7 ImageNet Challenge, 28–29 imitation of algorithms, 202–204 income inequality, 19, 212–214 independent variables, 45 inequality, 19, 212–214 initial public offerings (IPOs), 9–10, 125 innovation, 169–170, 171, 218–219 innovator’s dilemma, 181–182 input data, 43 in decision making, 74–76, 134–138 identifying required, 139 Integrate.ai, 14 Intel, 15, 215 intelligence churn prediction and, 32–36 human, 39 prediction as, 2–3, 29, 31–41 internet advertising, 175–176 browsers, 9–10 delivery time uncertainty and commerce via, 157–158 development of the commercial, 9–10 inventory management, 28, 105 Iowa, hybrid corn adoption in, 158–160, 181 iPhone, 129–130, 155 iRobot, 104 James, Bill, 56 Jelinek, Frederick, 108 jobs, 19.

See also jobs “Lady Lovelace’s Objection,” 13 Lambrecht, Anja, 196 language translation, 25–27, 107–108 laws of robotics, 115 learning -by-using, 182–183 in the cloud vs. on the ground, 188–189, 202 experience and, 191 in-house and on-the-job, 185 language translation, 26–27 pathways to, 182–184 privacy and data for, 189–190 reinforcement, 13, 145, 183–184 by simulation, 187–188 strategy for, 179–194 supervised, 183 trade-offs in performance and, 181–182 when to deploy and, 184–187 Lederman, Mara, 168–169 Lee, Kai-Fu, 219 Lee Se-dol, 8 legal documents, redacting, 53–54, 68 legal issues, 115–117 Lewis, Michael, 56 Li, Danielle, 58 liability, 117, 195–198 lighting, cost of, 11 London cabbies, 76–78 Lovelace, Ada, 12, 13 Lyft, 88–89 Lytvyn, Max, 96 machine learning, 18 adversarial, 187–188 churn prediction and, 32–36 complexity and, 103–110 from data, 45–47 feedback for, 46–47 flexibility in, 36 judgment and, 83 one-shot, 60 regression compared with, 32–35 statistics and prediction and, 37–40 techniques, 8–9 transformation of prediction by, 37–40 Mailmobile, 103 management AI’s impact on, 3 by exception, 67–68 Mastercard, 25 mathematics, made cheap by computers, 12, 14 Mazda, 124 MBA programs, student recruitment for, 127–129, 133–139 McAfee, Andrew, 91 Mejdal, Sig, 161 Microsoft, 9–10, 176, 180, 202–204, 215, 217 Tay chatbot, 204–205 mining, automation in, 112–114 Misra, Sanjog, 93–94 mobile-first strategy, 179–180 Mobileye, 15 modeling, 99, 100–102 Moneyball (Lewis), 56, 161–162 monitoring of predictions, 66–67 multivariate regression, 33–34 music, digital, 12, 61 Musk, Elon, 209, 210, 221 Mutual Benefit Life, 124–125 Napster, 61 NASA, 14 National Science and Technology Council (NSTC), 222–223 navigation apps, 77–78, 88–90, 106 Netscape, 9–10 neural networks, 13 New Economy, 10 New York City Fire Department, 197 New York Times, 8, 218 Nordhaus, William, 11 Norvig, Peter, 180 Nosko, Chris, 199 Novak, Sharon, 169–170 Numenta, 223 Nymi, 201 Oakland Athletics, 56, 161–162 Obama, Barack, 217–218 objectives, identifying, 139 object recognition, 7, 28–29 Olympics, Rio, 114–115 omitted variables, 62 one-shot learning, 60 On Intelligence (Hawkins), 39 Open AI, 210 optimization, search engine, 64 oracles, 23 organizational structure, 161–162 Osborne, Michael, 149 Otto, 157–158 outcomes in decision making, 74–76, 134–138 job redesign and, 142 outsourcing, 169–170, 171 Page, Larry, 179 Paravisini, Daniel, 66–67 pattern recognition, 145–147 Pavlov, Ivan, 183 payoff calculations, 78–81 in drug discovery, 136 judgment in, 87–88 Pell, Barney, 2 performance, trade-offs between learning and, 181–182, 187 performance reviews, 172–173 photography digital, 14 sports, automation of, 114–115 Pichai, Sundar, 179–180 Piketty, Thomas, 213 Pilbara, Australia, mining in, 112–114 policy, 3, 210 power calculations, 48 prediction, 23–30 about the present, 23–24 behavior affected by, 23 bias in, 34–35 complements to, 15 consequences of cheap, 29 credit card fraud prevention and, 24–25 in decision making, 74–76, 134–138 definition of, 13, 24 by exception, 67–68 human strengths in, 60 human weaknesses in, 54–58 improvements in, 25–29 as intelligence, 2–3, 29, 31–41 in language translation, 25–27 machine weaknesses in, 58–65 made cheap, 13–15 selling, 176–177 techniques, 13 unanticipated correlations and, 36–37 of what a human would do, 95–102 predictive text, 130 preferences, 88–90, 96–97, 98 selling consumer, 176–177 presidential elections, 59 prices effects of reduced AI, 9–11 human judgment in, 100 sales causality and, 63–64 for ZipRecruiter, 93–94 privacy issues, 19, 49, 98 China and, 219–220 country differences in, 219–221 data collection, 189–190 probabilistic programming, 38, 40 processes.


pages: 277 words: 80,703

Revolution at Point Zero: Housework, Reproduction, and Feminist Struggle by Silvia Federici

Community Supported Agriculture, declining real wages, equal pay for equal work, feminist movement, financial independence, fixed income, global village, illegal immigration, informal economy, invisible hand, labor-force participation, land tenure, mass incarceration, means of production, microcredit, neoliberal agenda, new economy, Occupy movement, planetary scale, Scramble for Africa, statistical model, structural adjustment programs, the market place, trade liberalization, UNCLOS, wages for housework, Washington Consensus, women in the workforce, World Values Survey

Pyle, “Transnational Migration and Gendered Care Work: Introduction,” Globalizations 3, no. 3 (2006): 289; Arlie Hochschild and Barbara Ehrenreich, Global Women: Nannies, Maids and Sex Workers in the New Economy (New York: Holt, 2002). 13. Dario Di Vico, “Le badanti, il nuovo welfare privato. Aiutano gli anziani e lo Stato risparmia,” Corriere della Sera, June 13, 2004, 15. 14. Arlie Hochschild, “Global Care Chains and Emotional Surplus Value,” in Global Capitalism, eds. Will Hutton and Anthony Giddens (New York: The New Press, 2000); Arlie Hochschild and Barbara Ehrenreich, Global Women: Nannies, Maids and Sex Workers in the New Economy (New York: Holt, 2002), 26-27. 15. New York Times, January 28, 2009. 16. The Bill of Rights Domestic Workers United campaigned for and won in 2010 in New York State was the first in the country that recognized that care workers are workers, entitled to the same rights that other categories of workers have. 17.

This is not a utopia, but a process already under way in many parts of the world and likely to expand in the face of a collapse of the world financial system. Governments are now attempting to use the crisis to impose stiff austerity regimes on us for years to come. But through land takeovers, urban farming, community-supported agriculture, through squats, the creation of various forms of barter, mutual aid, alternative forms of healthcare—to name some of the terrains on which this reorganization of reproduction is more developed—a new economy is beginning to emerge that may turn reproductive work from a stifling, discriminating activity into the most liberating and creative ground of experimentation in human relations. As I stated, this is not a utopia. The consequences of the globalized world economy would certainly have been far more nefarious except for the efforts that millions of women have made to ensure that their families would be supported, regardless of their value on the capitalist labor market.

In Witchcraft Beliefs and Accusations in Contemporary Africa, edited by Gerrie Ter Haar, 229-46. Trenton, NJ: Africa World Press, 2007. Hochschild, Adam. King Leopold’s Ghost, Boston: Houghton Mifflin Co., 1998. Hochschild, Arlie. “Global Care Chains and Emotional Surplus Value.” In Global Capitalism, edited by Will Hutton and Anthony Giddens. New York: The New Press, 2000. Hochschild, Arlie, and Barbara Ehrenreich. Global Women: Nannies, Maids and Sex Workers in the New Economy. New York: Holt, 2002. Holloway, John. Change the World Without Taking Power. London: Pluto Press, 2002. _. Crack Capitalism. London: Pluto Press, 2010. Holmstrom, Nancy, ed. The Socialist Feminist Project: A Contemporary Reader in Theory and Politics. New York: Monthly Review Press, 2002. hooks, bell. Yearning: Race, Gender, and Cultural Politics. Boston: South End Press, 1990. Human Rights Watch (Africa).


pages: 336 words: 95,773

The Theft of a Decade: How the Baby Boomers Stole the Millennials' Economic Future by Joseph C. Sternberg

Affordable Care Act / Obamacare, Airbnb, American Legislative Exchange Council, Asian financial crisis, banking crisis, Basel III, Bernie Sanders, blue-collar work, centre right, corporate raider, Detroit bankruptcy, Donald Trump, Edward Glaeser, employer provided health coverage, Erik Brynjolfsson, eurozone crisis, future of work, gig economy, Gordon Gekko, hiring and firing, Home mortgage interest deduction, housing crisis, job satisfaction, job-hopping, labor-force participation, low skilled workers, Lyft, Marc Andreessen, Mark Zuckerberg, minimum wage unemployment, mortgage debt, mortgage tax deduction, Nate Silver, new economy, obamacare, oil shock, payday loans, pension reform, quantitative easing, Richard Florida, Ronald Reagan, Saturday Night Live, Second Machine Age, sharing economy, Silicon Valley, sovereign wealth fund, TaskRabbit, total factor productivity, Tyler Cowen: Great Stagnation, uber lyft, unpaid internship, women in the workforce

The “death of American manufacturing” is mired in controversy—by some measures manufacturing has declined steadily as a proportion of total GDP since the 1950s; by other measures it’s holding more or less steady—but America still is very much an economy that produces physical things in addition to all those services.32 And it’s clear that the nature of American manufacturing has changed significantly, as has the nature of employment within manufacturing industries. This work has become progressively higher skilled and more productive, while many workers who couldn’t keep up with the transformation (or, far more often, whose employers couldn’t keep up) have struggled to navigate the new economy. Manufacturing’s share of employment has fallen from above 30 percent in the 1950s to less than 10 percent now.33 Countless economists going back forty years or more have tried to dig into what’s driving this transformation. Commonly cited culprits include technological advances, especially the computing revolution; foreign trade, especially with super-efficient industrial powerhouses such as Germany or Japan or low-wage behemoths such as China; US domestic tax policies and economic regulations; other policy failures such as deteriorating public education—you name it, someone has probably thought of it as an explanation for this switch.

In the course of doing so, they would make labor ever more expensive, and investments requiring more labor ever less attractive, at precisely the moment capital investment was becoming cheaper and cheaper—at least for some investors in some industries. To see why that approach was such a disaster, look no further than the Affordable Care Act, or Obamacare. Obamacare was an attempt to solve a glaring problem: in a new economy of constant employment churn (and where there were fewer and fewer mid-paying jobs to support health benefits for large tranches of the working population) it just doesn’t make a lot of sense to tie insurance to employment. It never made sense anyway. America’s system of employment-based insurance developed the way it did only by accident. During World War II, wage controls made it hard for employers to compete for the ever shrinking portion of the population that wasn’t engaged in fighting the war.

Among twenty-five- to thirty-four-year-olds, three-quarters of those who lived at home as of 2016 had actual work or were studying.9 An oft-repeated reason for living at home is that rents are unaffordably high, especially in vibrant urban areas where the job market tends to be strongest for creative, highly educated Millennials.* A paradox is that many of America’s most expensive places to live have become so pricy because they’re magnets for the kinds of creative, new-economy jobs that attract hyper-educated Millennials like moths to a flame (or like avocado to toast)—yet Millennials struggle to afford to live in these hubs partly as a result of rising rents and partly because our pay doesn’t keep pace. The moving-back-in-with-Mom-and-Dad trend represents an enormous backward step in the evolution of modern American adulthood. Sociologists and demographers have spent a hundred fifty years studying the question of why kids started moving out of their family homes—or more precisely, those researchers were studying why elderly parents stopped living with their children.


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Value Investing: From Graham to Buffett and Beyond by Bruce C. N. Greenwald, Judd Kahn, Paul D. Sonkin, Michael van Biema

Andrei Shleifer, barriers to entry, Berlin Wall, business cycle, capital asset pricing model, corporate raider, creative destruction, Daniel Kahneman / Amos Tversky, discounted cash flows, diversified portfolio, Eugene Fama: efficient market hypothesis, fixed income, index fund, intangible asset, Long Term Capital Management, naked short selling, new economy, place-making, price mechanism, quantitative trading / quantitative finance, Richard Thaler, shareholder value, short selling, Silicon Valley, stocks for the long run, Telecommunications Act of 1996, time value of money, tulip mania, Y2K, zero-sum game

Modern value investors have had to develop new approaches to discovering and valuing assets that allow them to move beyond cash, accounts receivables, and inventory while still making their investment decisions on the basis of the value of the assets today, rather than earnings, cash flow, or whatever in the future. In the last years of the last century, it looked as if value investors were an endangered species. The "New Economy," based on digital technologies and biotechnologies in all their manifestations, was thought to cultivate companies with prospects for unlimited growth in sales and even more growth in income. By now it is clear that at least some of these premises were mistaken. There is no need to review the history of those miraculous initial public offerings (IPOs) that came public at $20, spiked to $120, and then drifted or thudded back to earth, on the basis of earnings that no one had seen but were promised four or five years hence. The most fervid proponents of the New Economy hypothesis argued that some of the funda mental truths of economics had been repealed, such as the theory that competitors would be drawn to profitable industries and ultimately force profit margins down into a normal range.

Conversely, if Intel's net PPE number understated the real (market) value of its fixed assets, Intel would not have needed to spend the equivalent sum every five years. The net PPE figure stands up as a reasonable amount when measured against capital outlays. Figure 7.3 Intel Capital Expenditures and PPE, 1975-1998 If there are assets that a competitor would have needed to produce to compete with Intel, they are not found on the balance sheet for 1975. That does not mean that they didn't exist. Intel, we should not forget, was a New Economy stock long before the New Economy had a name (at least in its post-1920s incarnation). As an early and major manufacturer of memory chips and then microprocessors, Intel invested in knowledge-based resources-the science and engineering skills needed to design and fabricate semiconductors-and supplied knowledge-enhancing products, which were the memory and brains of computers and industrial equipment, to its customers.

The most fervid proponents of the New Economy hypothesis argued that some of the funda mental truths of economics had been repealed, such as the theory that competitors would be drawn to profitable industries and ultimately force profit margins down into a normal range. This intellectual environment, when coupled with stock markets that for three or four years only went up, and up substantially, was not friendly to value investors. Even those whose long-term performance records were the stuff of legend fell behind those who either understood the New Economy or, more likely, were able to anticipate how other investors would respond to its prospects. At the end of the decade (and century and millennium), the debate between those who saw the current market level as tulip mania revisited and those who saw it as a stepping stone to 36,000 on the Dow was still raging. It has diminished, at least for the moment, as the year 2000 reminded investors that everything that rises may not rise forever.


pages: 519 words: 148,131

An Empire of Wealth: Rise of American Economy Power 1607-2000 by John Steele Gordon

accounting loophole / creative accounting, bank run, banking crisis, Bretton Woods, British Empire, business cycle, buttonwood tree, California gold rush, clean water, collective bargaining, Corn Laws, corporate governance, cuban missile crisis, disintermediation, double entry bookkeeping, failed state, financial independence, Frederick Winslow Taylor, full employment, global village, imperial preference, informal economy, interchangeable parts, invisible hand, Isaac Newton, Jacquard loom, James Hargreaves, James Watt: steam engine, joint-stock company, joint-stock limited liability company, lone genius, Louis Pasteur, margin call, Marshall McLuhan, means of production, Menlo Park, Mikhail Gorbachev, money market fund, money: store of value / unit of account / medium of exchange, moral hazard, new economy, New Urbanism, postindustrial economy, price mechanism, Ralph Waldo Emerson, RAND corporation, rent control, rent-seeking, reserve currency, rolodex, Ronald Reagan, spinning jenny, The Wealth of Nations by Adam Smith, trade route, transaction costs, transcontinental railway, undersea cable, Yom Kippur War

There was still much land that was unoccupied, but it was fragmented, and there was no longer an identifiable line across the continent that marked the end of civilization and the beginning of the once boundless wilderness. The United States was now a continental nation in geopolitical reality as well as nominal geographic fact. The need to devise the new rules and institutions that would allow this new economy to flourish, and to assure that its fruits were equitably enjoyed by all segments of society, would dominate domestic American politics for the next century, just as preserving the Union and slavery had dominated the politics of the antebellum period. Many of the devices adopted to govern the new economy in this time would come through governmental and legislative action, especially in the latter decades. But, in fact, just as many would emerge out of the private sector, as the lawyers, bankers, brokers, railroaders, labor leaders, and industrialists sought to advance their own long-term self-interests, which were by no means always identical.

Chapter Fourteen: A Cross of Gold Part IV The American Century Begins Transition: The First World War Chapter Fifteen: Getting Prices Down to the Buying Power Chapter Sixteen: Fear Itself Chapter Seventeen: Converting Retreat into Advance Part V A New Economic Revolution Transition: The Second World War Chapter Eighteen: The Great Postwar Boom Chapter Nineteen: The Crisis of the New Deal Order Chapter Twenty: A New Economy, a New World, a New War Notes Bibliography Searchable Terms About the Author Praise Other Books by John Steele Gordon Copyright About the Publisher ACKNOWLEDGMENTS MY FIRST THANKS, needless to say, are due to my editor, Tim Duggan; his assistant, John Williams; and my agent, Katinka Matson. Eleanor Mikucki did an excellent job of copyediting.

The reason that the nineteenth century seems so peculiarly scandal-ridden, perhaps, is that there was so much economic, technological, and social change in that century. With the reforms brought about by the scandals of the immediate post–Civil War era, the American economy and American politics settled into a more law-abiding period while the economy continued to evolve at breakneck speed. But many of the men who would play a central role in shaping the new economy, men such as J. P. Morgan, John D. Rockefeller, and Andrew Carnegie, came of age in the era of unprecedented government corruption and would never be able to conceive of government as a suitable instrument for reforming and regulating the economy. To them, government was part of the problem, not the solution. They thought it was up to men like themselves to put the new American economy on a sound and honorable basis and keep it there.


pages: 116 words: 31,356

Platform Capitalism by Nick Srnicek

3D printing, additive manufacturing, Airbnb, Amazon Mechanical Turk, Amazon Web Services, Capital in the Twenty-First Century by Thomas Piketty, cloud computing, collaborative economy, collective bargaining, deindustrialization, deskilling, disintermediation, future of work, gig economy, Infrastructure as a Service, Internet of things, Jean Tirole, Jeff Bezos, knowledge economy, knowledge worker, liquidity trap, low skilled workers, Lyft, Mark Zuckerberg, means of production, mittelstand, multi-sided market, natural language processing, Network effects, new economy, Oculus Rift, offshore financial centre, pattern recognition, platform as a service, quantitative easing, RFID, ride hailing / ride sharing, Robert Gordon, self-driving car, sharing economy, Shoshana Zuboff, Silicon Valley, Silicon Valley startup, software as a service, TaskRabbit, the built environment, total factor productivity, two-sided market, Uber and Lyft, Uber for X, uber lyft, unconventional monetary instruments, unorthodox policies, Zipcar

In what would come to characterise the internet-based sector to this day, it appeared a requirement that companies aim for monopolistic dominance. In the cut-throat early stages investors enthusiastically joined, in hopes of picking the eventual winner. Many companies did not have to rely on VC either, as the equity markets swooned over tech stocks. Initially driven by declining borrowing costs and rising corporate profits,14 the stock market boom came unmoored from the real economy when it latched onto the ‘new economy’ promised by internet-based companies. During its peak period between 1997 and 2000, technology stocks rose 300 per cent and took on a market capitalisation of $5 trillion.15 This excitement about the new industry translated into a massive injection of capital into the fixed assets of the internet. While investment in computers and information technology had been going on for decades, the level of investment in the period between 1995 and 2000 remains unprecedented to this day.

If this analysis is right, then capitalist competition is driving the internet to fragment. There is no necessity to this outcome, as political efforts can stall or reverse it; but within a capitalist mode of production there are strong competitive pressures towards this end. Challenges For all the rhetoric of having overcome capitalism and of transitioning to a new mode of production – a rhetoric inherent in the postindustrial thesis of the 1960s, in the ideas of ‘new economy’ disciples in the 1990s, and in the radical and conservative paeans to the sharing economy of today – we still remain bound to a system of competition and profitability. Platforms offer new forms of competition and control, but in the end profitability is the great arbiter of success. Given these constraints, we must now open platforms up onto the wider economy. We can begin by returning to the scene of the long downturn and the problem of global manufacturing overcapacity.

Paper presented at the Annual Dinner and Francis Boyer Lecture of the American Enterprise, Institute for Public Policy Research, Washington, DC, 5 December 5. https://www.federalreserve.gov/boarddocs/speeches/1996/19961205.htm (accessed 25 May 2016). Harris, Seth, and Alan Krueger. 2015. ‘A Proposal for Modernizing Labor Laws for Twenty-First-Century Work: The “Independent Worker”.’ The Hamilton Project. Discussion paper 2015-10. December. http://www.hamiltonproject.org/assets/files/modernizing_labor_laws_for_twenty_first_century_work_krueger_harris.pdf (accessed 25 May 2016). Henwood, Doug. 2003. After the New Economy. New York: New Press. Henwood, Doug. 2015. ‘What the Sharing Economy Takes’. The Nation, 27 January. http://www.thenation.com/article/what-sharing-economy-takes (accessed 25 May 2016). Herrman, John. 2016. ‘Media Websites Battle Faltering Ad Revenue and Traffic’. The New York Times, 17 April. http://www.nytimes.com/2016/04/18/business/media-websites-battle-falteringad-revenue-and-traffic.html (accessed 30 June 2016).


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Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

affirmative action, barriers to entry, Bonfire of the Vanities, borderless world, business process, Charles Lindbergh, Corn Laws, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, hiring and firing, industrial cluster, invisible hand, James Watt: steam engine, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, mittelstand, new economy, North Sea oil, race to the bottom, railway mania, Ronald Coase, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, tulip mania, wage slave, William Shockley: the traitorous eight

Yet, over the next forty years, its great companies enabled it to replace Britain as Europe’s leading industrial power. In the late nineteenth century, the finest examples of the “new economy” in Europe were all in Germany: the vast electrical-equipment producing complex at Siemenstadt, the huge chemical works of Leverkusen, Ludwigshafen, and Frankfurt, the massive machinery works and steel mills in the Ruhr and along the Rhine. When Alfred Krupp died in 1887, his company employed twenty thousand people, and boasted its own hospitals and schools. Britain had nothing comparable to offer. Germany’s companies were similar to America’s in their focus on the new economy: almost two-thirds of the top two hundred dealt with metals, chemicals, and machinery. But they embodied a rather different sort of capitalism—one that emphasized cooperation rather than competition and that gave a leading role to the state.

Worried by the buccaneering spirit that deregulation had unleashed and by the piratical excesses of some corporate captains, governments sporadically tried to call the bosses of companies more firmly to account. In some cases, regulators breached the corporate veil—holding directors personally responsible for their firms’ actions. In Britain, for instance, the 1986 Insolvency Act made directors liable for the debts a company incurred after the point when they might reasonably be expected to have closed it down. But the real onslaught occurred in America, after the New Economy bubble burst. ENRON AND BEYOND The 1990s was a decade of infatuation with companies. The number of magazines devoted to business multiplied, even as the ages of the smiling chief executives on their covers plummeted. But the adoration went well beyond young whippersnappers. When Roberto Goizueta, the veteran boss of Coca-Cola, tried to justify his $80 million pay packet to a shareholder meeting, he was interrupted four times—with applause.

The spread of mutual funds and the change from defined-benefit to defined-contribution retirement plans meant that this was a truly democratic crash: most of the households in America lost money directly. The specific catalyst was, ironically enough, one of the firms that Bush had turned to to design his energy policy. Enron was a darling of the 1990s—a new form of energy company that did not rely on drilling and gas stations but on teams of financial traders. A Harvard Business School case study was approvingly titled “Enron’s Transformation: From Gas Pipelines to New Economy Powerhouse.” Unfortunately, the energy trading company took its penchant for innovation just a little too far. Its managers used highly complicated financial engineering—convoluted partnerships, off-the-books debt, and exotic hedging techniques—to hide huge losses. And when those losses emerged, they sold millions in company stock while their employees were prohibited from doing likewise. All the corporate overseers who were employed to monitor Enron on behalf of its shareholders—the outside directors, auditors, regulators, and stockbroking analysts—were found wanting.


pages: 313 words: 84,312

We-Think: Mass Innovation, Not Mass Production by Charles Leadbeater

1960s counterculture, Andrew Keen, barriers to entry, bioinformatics, c2.com, call centre, citizen journalism, clean water, cloud computing, complexity theory, congestion charging, death of newspapers, Debian, digital Maoism, disruptive innovation, double helix, Douglas Engelbart, Edward Lloyd's coffeehouse, frictionless, frictionless market, future of work, game design, Google Earth, Google X / Alphabet X, Hacker Ethic, Hernando de Soto, hive mind, Howard Rheingold, interchangeable parts, Isaac Newton, James Watt: steam engine, Jane Jacobs, Jaron Lanier, Jean Tirole, jimmy wales, Johannes Kepler, John Markoff, John von Neumann, Joi Ito, Kevin Kelly, knowledge economy, knowledge worker, lateral thinking, lone genius, M-Pesa, Mark Shuttleworth, Mark Zuckerberg, Marshall McLuhan, Menlo Park, microcredit, Mitch Kapor, new economy, Nicholas Carr, online collectivism, planetary scale, post scarcity, Richard Stallman, Shoshana Zuboff, Silicon Valley, slashdot, social web, software patent, Steven Levy, Stewart Brand, supply-chain management, The Death and Life of Great American Cities, the market place, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Whole Earth Catalog, Zipcar

The Whole Earth Catalog contained elements now recognisable in trendy Web 2.0-style businesses like eBay and Craigslist. Much of the content was submitted by readers, and those who were first to recommend something interesting got their names listed in the magazine. Brand went on to help create the Whole Earth ’Lectronic Link, an early Internet bulletin board, which in turn spawned the Electronic Frontier Foundation, which campaigns for freedom of speech online, and Wired magazine, the bible of the New Economy. More than any other magazine, Wired lionised technology entrepreneurs as the carriers of revolution. By 1971, however, the workload on the Whole Earth Catalog was taking its toll on Brand and he decided to close the magazine down with a Demise Party, held on 21 June at the Palace of Fine Arts in the centre of San Francisco. The entertainment included clowns, belly dancers, trampolinists and a band called Golden Toad who played Irish jigs and Tibetan temple music.

They are collaborative individualists – they have a strong sense of their individual rights, ambitions and aspirations but they have grown up being highly social, thanks to the web and mobile phones. When my stepdaughter Henrietta organises her friends with text messages they are like an electronic herd grazing across north London until they converge on the same bar. Worries that they are over-socialised are wide of the mark, especially as most critics of the new economy, such as Richard Sennett,complain of exactly the opposite: that young people are too individualistic and atomised. If Sennett is right, we need more social tethering, not less. The web is certainly changing how young people establish their sense of individuality; it is not extinguishing it. Our freedom as consumers has also grown, not only because we can now search more easily across many more products but also because the digital economy allows a far greater diversity of products to co-exist.

Clark, Design Rules (Cambridge, MA/London: MIT Press, 2000) Chapter 4 1 Richard Sennett, The Culture of the New Capitalism (New Haven, CT/London: Yale University Press, 2006) 2 Mitch Kapor, blog.kapor.com 3 Henry Chesbrough, Wim Vanhaverbeke and Joel West (Eds), Open Innovation: Researching a New Paradigm (Oxford University Press, 2006) 4 John Hartley, ‘Culture Business and the Value Chain of Meaning’, The New Economy, Creativity and Consumption – A Symposium (Brisbane: Queensland University of Technology Publications, 2002), pp. 39–46 5 http://www.blizzard.com/inblizz/profile.shtml 6 Nicolas Ducheneaut, Nicholas Yee, Eric Nickell and Robert J. Moore, ‘Alone Together? Exploring the Social Dynamics of Massively Multiplayer Online Games’, Conference on Human Factors in Computing Systems,2006, p. 3. Available from http://www.parc.xerox.com/ research/publications/files/5599.pdf 7 David Barboza, ‘Ogre to Slay?


pages: 403 words: 87,035

The New Geography of Jobs by Enrico Moretti

assortative mating, Bill Gates: Altair 8800, business climate, call centre, cleantech, cloud computing, corporate raider, creative destruction, desegregation, Edward Glaeser, financial innovation, global village, hiring and firing, income inequality, industrial cluster, Jane Jacobs, Jeff Bezos, Joseph Schumpeter, knowledge economy, labor-force participation, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, medical residency, Menlo Park, new economy, peer-to-peer lending, Peter Thiel, Productivity paradox, Richard Florida, Sand Hill Road, Silicon Valley, Skype, special economic zone, Startup school, Steve Jobs, Steve Wozniak, thinkpad, Tyler Cowen: Great Stagnation, Wall-E, Y Combinator, zero-sum game

. [>] Shenzhen’s population has grown: According to the Shenzhen government’s official website, the city population was 30,000 in 1979 and 10.36 million in 2010. [>] Essentially this is why: Kraemer, Linden, and Dedrick, “Capturing Value in Global Networks.” [>] About a third of Americans work: My calculations are based on County Business Patterns data from the U.S. Census Bureau. [>] “the New Economy gives both companies and workers”: Atkinson and Gottlieb, “The Metropolitan New Economy Index,” 2001. 1. AMERICAN RUST [>] American Rust: American Rust is the title of a novel by Philipp Meyer. [>] Consider Figure 1: My analysis is based on data from County Business Patterns, U.S. Census Bureau. [>] Nineteen out of twenty sectors: U.S. Bureau of Labor Statistics, “Industry Output and Employment Projections to 2018.” [>] “the United States no longer”: Jacoby, “Made in the USA.” [>] In the decade after World War II: Glaeser, Triumph of the City. [>] “People think China is cheap”: Fallows, “China Makes, the World Takes.” [>] An important new study: Autor, Dorn, and Hanson, “The China Syndrome.” [>] A recent study by Nicholas Bloom: Bloom, Draca, and Van Reenen, “Trade Induced Technical Change?”

The three Americas are growing apart at an accelerating rate. The paradox is that the very success of the country’s engine of growth is generating a deep and growing inequality among American communities. As we will discover, the winners and losers in this process are not always the people we expect. It wasn’t supposed to be this way. At the peak of the dot-com frenzy in 2000, observers of all stripes almost unanimously concluded that “the New Economy gives both companies and workers more locational freedom.” In The World Is Flat, one of the most influential books about globalization, Thomas Friedman famously argued that cell phones, e-mail, and the Internet lowered communication barriers so much that location was irrelevant. Distance was dead. Geography didn’t matter. This argument has continued to resonate. The idea is that no matter where people live, they can share knowledge and move products at virtually no cost.

While American graduate schools and research institutions remain the best in the world, the country’s elementary and secondary schools lag behind those of many European countries and a growing number of developing countries, while college graduation rates have slowed down. If human capital was the key to economic prosperity in the twentieth century, it is even more important in the twenty-first. In the coming decades, successful societies will be the ones that can attract and nurture the most creative workers and entrepreneurs. The United States needs to choose how it wants to increase its human capital to stay competitive in this new economy. There are two ways to supply America’s innovative businesses with the educated workers they need while reducing the economic divide between those with skills and those without. One avenue is to dramatically reform immigration policy in favor of workers with college and postgraduate degrees. This policy, already adopted by such countries as Canada and Australia, would increase America’s human capital at little expense to American taxpayers.


pages: 318 words: 85,824

A Brief History of Neoliberalism by David Harvey

affirmative action, Asian financial crisis, Berlin Wall, Bretton Woods, business climate, business cycle, capital controls, centre right, collective bargaining, creative destruction, crony capitalism, debt deflation, declining real wages, deglobalization, deindustrialization, Deng Xiaoping, Fall of the Berlin Wall, financial deregulation, financial intermediation, financial repression, full employment, George Gilder, Gini coefficient, global reserve currency, illegal immigration, income inequality, informal economy, labour market flexibility, land tenure, late capitalism, Long Term Capital Management, low-wage service sector, manufacturing employment, market fundamentalism, mass immigration, means of production, Mexican peso crisis / tequila crisis, Mont Pelerin Society, mortgage tax deduction, neoliberal agenda, new economy, Pearl River Delta, phenotype, Ponzi scheme, price mechanism, race to the bottom, rent-seeking, reserve currency, Ronald Reagan, Silicon Valley, special economic zone, structural adjustment programs, the built environment, The Chicago School, transaction costs, union organizing, urban renewal, urban sprawl, Washington Consensus, Winter of Discontent

Since degree of neoliberalization was increasingly taken by the IMF and the World Bank as a measure of a good business climate, the pressure on all states to adopt neoliberal reforms ratcheted upwards.2 Thirdly, the Wall Street–IMF–Treasury complex that came to dominate economic policy in the Clinton years was able to persuade, cajole, and (thanks to structural adjustment programmes administered by the IMF) coerce many developing countries to take the neoliberal road.3 The US also used the carrot of preferential access to its huge consumer market to persuade many countries to reform their economies along neoliberal lines (in some instances through bilateral trade agreements). These policies helped produce a boom in the US in the 1990s. The US, riding a wave of technological innovation that underpinned the rise of a so-called ‘new economy’, looked as if it had the answer and that its policies were worthy of emulation, even though the relatively full employment achieved was at low rates of pay under conditions of diminishing social protections (the number of people without health insurance grew). Flexibility in labour markets and reductions in welfare provision (Clinton’s draconian overhaul of ‘the welfare system as we know it’) began to pay off for the US and put competitive pressures on the more rigid labour markets that prevailed in most of Europe (with the exception of Britain) and Japan.

The most immediate question concerns what sort of crisis might serve the US best in resolving its own situation, for that choice is indeed within the realm of policy options. In presenting these options it is important to recall that the US has not been immune to financial difficulties over the last twenty years. The stock market crash of 1987 deleted nearly 30 per cent of asset values, and at the trough of the crash that followed the bursting of the new economy bubble in the late 1990s more that $8 trillion in paper assets was lost, before the recovery to former levels. The bank and savings and loan failures of 1987 cost nearly $200 billion to remedy, and in that year matters became so bad that William Isaacs, chairman of the Federal Deposit Insurance Corporation, warned that ‘the US may be headed towards the nationalization of banking’. And the huge bankruptcies of Long Term Capital Management, Orange County, and others who speculated and lost, followed by the collapse of several major companies in 2001–2 in the midst of astonishing accounting lapses, not only cost the public dear but also demonstrated how fragile and fictitious much of neoliberal financialization has become.

The story of Thatcher’s path to neoliberalism is outlined in D. Yergin and J. Stanislaw, The Commanding Heights: The Battle Between Government and Market Place that is Remaking the Modern World (New York: Simon & Schuster, 1999). 18. L. Panitch and S. Gindin, ‘Finance and American Empire’, in The Empire Reloaded: Socialist Register 2005 (London: Merlin Press, 2005) 46–81. 19. D. Henwood, After the New Economy (New York: New Press, 2003), 208. 20. L. Alvarez, ‘Britain Says U.S. Planned to Seize Oil in ’73 Crisis’, New York Times, 4 Jan. 2004, A6. On the Saudi agreement to recycle petrodollars through the US see P. Gowan, The Global Gamble: Washington’s Faustian Bid for World Dominance (London: Verso, 1999), 20. 21. D. Harvey, The New Imperialism (Oxford: Oxford University Press, 2003); N. Smith, American Empire, Roosevelt’s Geographer and the Prelude to Globalization (Berkeley: University of California Press, 2003); N.


pages: 263 words: 80,594

Stolen: How to Save the World From Financialisation by Grace Blakeley

"Robert Solow", activist fund / activist shareholder / activist investor, asset-backed security, balance sheet recession, bank run, banking crisis, banks create money, Basel III, basic income, battle of ideas, Berlin Wall, Big bang: deregulation of the City of London, bitcoin, Bretton Woods, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, collapse of Lehman Brothers, collective bargaining, corporate governance, corporate raider, credit crunch, Credit Default Swap, cryptocurrency, currency peg, David Graeber, debt deflation, decarbonisation, Donald Trump, eurozone crisis, Fall of the Berlin Wall, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, financial intermediation, fixed income, full employment, G4S, gender pay gap, gig economy, Gini coefficient, global reserve currency, global supply chain, housing crisis, Hyman Minsky, income inequality, inflation targeting, Intergovernmental Panel on Climate Change (IPCC), Kenneth Rogoff, Kickstarter, land value tax, light touch regulation, low skilled workers, market clearing, means of production, money market fund, Mont Pelerin Society, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, Northern Rock, offshore financial centre, paradox of thrift, payday loans, pensions crisis, Ponzi scheme, price mechanism, principal–agent problem, profit motive, quantitative easing, race to the bottom, regulatory arbitrage, reserve currency, Right to Buy, rising living standards, risk-adjusted returns, road to serfdom, savings glut, secular stagnation, shareholder value, Social Responsibility of Business Is to Increase Its Profits, sovereign wealth fund, the built environment, The Great Moderation, too big to fail, transfer pricing, universal basic income, Winter of Discontent, working-age population, yield curve, zero-sum game

Marx showed that every kind of capitalist system is subject to its own contradictions: strains that arise from the normal functioning of the economic model — from businesses trying to make money, politicians trying to get votes, and people trying to survive.21 These dynamics have characterised the development of capitalism for centuries. Each and every capitalist model must end in crisis, and moments of crisis are moments of adaption — moments when, out of the ashes of the old, the new economy can be born. They are also, as the Italian theorist Antonio Gramsci pointed out, very dangerous moments indeed. Each crisis of capitalism doesn’t simply threaten to bring down the dominant economic model, but the institutions that govern politics and society too. When people no longer expect to be made better off by the status quo, they withdraw their support for it. The guardians of our governing institutions double down as a result, defending their model even as it fails to deliver gains for the majority of the population.

In just over a decade, it will be too late for us to deal with one of the greatest challenges humanity has ever faced, and before that, elites are likely to have reasserted their control by foisting upon us a new order that maintains all the powers of the old. But between now and then lies an extended moment of crisis — a moment of contingency and uncertainty — a moment during which the logic of capitalism has once again been brought into question. A new economy, and a new society, is slowly being born in the minds of those who know that history will never end. It is up to us to bring that new world into being. CHAPTER ONE THE GOLDEN AGE OF CAPITALISM In 1944, the great and the good met in Bretton Woods, New Hampshire, to discuss rebuilding the world economy in the wake of the bloodiest war in history.1 The American delegation, led by Harry Dexter White, had been sent to ensure that the reins of the global economy were handed from the UK to the US in an orderly fashion.

But like many dumb ideas that enrich the powerful, shareholder value took off in the 1980s — and nowhere more so than in the City of London. Corporate Raiders, Hostile Takeovers, and Activist Investors Lord Hanson — aka “Lord Moneybags” — is famous for many things.35 He was engaged to Audrey Hepburn, had a fling with Joan Collins, and also happens to be one of the UK’s most notorious corporate raiders. Although he made his money in the new economy, Hanson didn’t exactly come from humble beginnings. Born into a family that made its money during the industrial revolution, he built multiple successful business ventures on the back of his family’s wealth before teaming up with Lord Gordon White to start Hanson Trust in 1964. At its height, Hanson Trust was worth £11bn. Over the course of the 1980s, its share price outperformed the rest of the FTSE100 by a staggering 370%.


pages: 319 words: 106,772

Irrational Exuberance: With a New Preface by the Author by Robert J. Shiller

Andrei Shleifer, asset allocation, banking crisis, Benoit Mandelbrot, business cycle, buy and hold, computer age, correlation does not imply causation, Daniel Kahneman / Amos Tversky, demographic transition, diversification, diversified portfolio, equity premium, Everybody Ought to Be Rich, experimental subject, hindsight bias, income per capita, index fund, Intergovernmental Panel on Climate Change (IPCC), Joseph Schumpeter, Long Term Capital Management, loss aversion, mandelbrot fractal, market bubble, market design, market fundamentalism, Mexican peso crisis / tequila crisis, Milgram experiment, money market fund, moral hazard, new economy, open economy, pattern recognition, Ponzi scheme, price anchoring, random walk, Richard Thaler, risk tolerance, Robert Shiller, Robert Shiller, Ronald Reagan, Small Order Execution System, spice trade, statistical model, stocks for the long run, survivorship bias, the market place, Tobin tax, transaction costs, tulip mania, urban decay, Y2K

“Investors Bet on a Kennedy-Sparked Upturn,” Business Week, February 4, 1961, p. 84; Dean S. Ammer, “Entering the New Economy,” Harvard Business Review (1967), pp. 3–4. 25. “Investors Bet on a Kennedy-Sparked Upturn,” p. 84; “The Bull Market,” Business Week, March 18, 1961, p. 142. 26. “Battling Toward 900,” Business Week, January 23, 1965, p. 26; “Year of the White Chips?” Newsweek, February 1, 1965, p. 57; “On Toward 1000,” Time, January 14, 1966, p. 78. 27. E. S. Browning and Danielle Sessa, “Stocks Pass 10,000 before Slipping Back,” Wall Street Journal, March 17, 1999, p. C1. 250 NOT ES TO PAGES 111–119 28. This is a geometric average real return on the S&P Composite Index. 29. Michael Mandel, “The Triumph of the New Economy,” Business Week, December 30, 1996, pp. 68–70. 30. See Michael Bruno and William Easterly, “Inflation Crises and Long-Run Growth,” Journal of Monetary Economics, 41(1) (1998): 2–26.

The most prominent business news in the papers in recent years had been about the formation of numerous combinations, trusts, and mergers in a wide variety of businesses, stories such as the formation of U.S. Steel out of a number of smaller steel companies. Many stock market forecasters in 1901 saw these developments as momentous, and the term community of interest was commonly used to describe the new economy dominated by them. An April 1901 editorial in the New York Daily Tribune explained: But a new era has come, the era of “community of interest,” whereby it is hoped to avoid ruinous price cutting and to avert the destruction which has in the past, when business depression occurred, overtaken so many of the competing concerns in every branch of industry. In the great iron and steel industry, for example, which, as Andrew Carnegie has said, has been the prince and the pauper of the industrial world, now highly prosperous again and again deeply depressed, consolidations of scores of scattered concerns into a dozen larger ones within the last two years have now been followed by the combination of the latter into the most gigantic combination the world has ever known, a combination which, if the expectations of its projectors are fulfilled, will result in the avoiding of much economic waste through eliminating the possibility of the erection of unnecessary plants for competitive reasons, in the effecting of many economies through the abolishing of duplicate official positions and establishment of a uniform price list, and in the enlargement of export trade by reason of the lower prices which can be fixed in consequence of the various economies coincident to consolidation.

Americans expected that such an achievement would be remembered for centuries, marking as it would humankind’s first escape from its planet of origin. Kennedy was viewed as the incarnation of our national optimism and of the strength of the stock market: “Wall Street has a simple description for the phenomenal strength of stock prices, ‘The Kennedy Market.’” The confidence inspired by the Kennedy economic program led some to conclude that the country was entering a “new economy” in which “businessmen can enjoy reasonably continuous prosperity indefinitely” and that there was “more justification for confidence” in monetary policy than in times past.24 The Kennedy initiatives were expanded on by the “Great Society” program of his successor, Lyndon Johnson, beginning in 1964; Johnson’s program set as its primary goals nothing less than an end to poverty and urban decay. In the 1960s, the theory that the stock market is the “best investment” was prominent: “Investors feel that stocks are the best investment medium—as a hedge against possible inflation, as a means of participating in the future growth of business.”


pages: 382 words: 107,150

We Are All Fast-Food Workers Now: The Global Uprising Against Poverty Wages by Annelise Orleck

airport security, American Legislative Exchange Council, anti-communist, Bernie Sanders, big-box store, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, card file, clean water, collective bargaining, corporate social responsibility, deindustrialization, Deng Xiaoping, Donald Trump, Ferguson, Missouri, financial deregulation, Food sovereignty, gig economy, global supply chain, global value chain, immigration reform, indoor plumbing, Kickstarter, land reform, land tenure, Mahatma Gandhi, mass immigration, McJob, means of production, new economy, payday loans, precariat, race to the bottom, Rana Plaza, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Reagan, Rosa Parks, shareholder value, Skype, special economic zone, Triangle Shirtwaist Factory, union organizing, War on Poverty, women in the workforce, working poor

And Gap, the world’s third-largest chain, drove its explosive growth by producing heavily in Asia.8 The flood of low-cost clothing from China, Bangladesh, Cambodia, and elsewhere has generated incredible profits. In 2015, annual profits in global apparel and textile production were $1.2 trillion, the total net worth of the industry, $4.4 trillion. As oil prices dropped and global oil profits fell, the garment industry continued to boom. Like consumer electronics, which also employs millions of migrant women, fast fashion is one of the main drivers of the new global economy.9 That new economy relies heavily on forced labor. In 2015, unfree and child labor was found in garment factories in Argentina, Bangladesh, Brazil, Cambodia, China, Vietnam, Thailand, India, Nepal, and Ethiopia. Sexual violence is endemic in garment shops. So are beatings. In 2014, 90 percent of garment workers surveyed by the AFL-CIO said they had been physically punished for making errors or for not meeting quotas.

And yet, as the young Filipina labor activist Em Atienza says, there is no time. There is too much work to be done. This book has highlighted the successes of many different low-wage workers’ movements but also noted the costs of struggle. In the end, they leave us with this: Change is possible on small and large scales, even against overwhelming odds. But progress is neither linear nor easy. Los Angeles Alliance for a New Economy cofounder Madeline Janis feels there is little to be gained by mourning what’s been lost. To win progressive change, she argues, we must look forward. LAANE has achieved significant victories, in Los Angeles and nationally. They’ve built broad coalitions linking labor, community, academic, and environmental groups; registered new voters and marshaled them to push through groundbreaking policies; tapped urban development projects and cutting-edge manufacturing technologies and turned them to aid poor and working people.

They are pieces of potentially transformative activist projects. We can use these and other flashes of light to strike sparks, to build models, to cast seeds of change to nourish a new world. Maria Elena Durazo has described the 2010s as a time of activist convergences. From the confluences of many movements—for labor, gender, race, immigrant, and environmental justice—visions and practical plans are taking shape. The “new economy” movement is working to create more humane local, national, and global economies driven by renewable energy. Roots of Change, Food Policy Councils, Via Campesina, Food First, and others are laying the groundwork for healthier, more inclusive farm, food, and water systems. The Worker Rights Consortium, International Labor Rights Forum, and global unions including the ITUC, IUF, UNI Global Union, and IndustriALL are constructing new global values chains—built on fair trade and worker justice.


pages: 484 words: 136,735

Capitalism 4.0: The Birth of a New Economy in the Aftermath of Crisis by Anatole Kaletsky

"Robert Solow", bank run, banking crisis, Benoit Mandelbrot, Berlin Wall, Black Swan, bonus culture, Bretton Woods, BRICs, business cycle, buy and hold, Carmen Reinhart, cognitive dissonance, collapse of Lehman Brothers, Corn Laws, correlation does not imply causation, creative destruction, credit crunch, currency manipulation / currency intervention, David Ricardo: comparative advantage, deglobalization, Deng Xiaoping, Edward Glaeser, Eugene Fama: efficient market hypothesis, eurozone crisis, experimental economics, F. W. de Klerk, failed state, Fall of the Berlin Wall, financial deregulation, financial innovation, Financial Instability Hypothesis, floating exchange rates, full employment, George Akerlof, global rebalancing, Hyman Minsky, income inequality, information asymmetry, invisible hand, Isaac Newton, Joseph Schumpeter, Kenneth Arrow, Kenneth Rogoff, Kickstarter, laissez-faire capitalism, Long Term Capital Management, mandelbrot fractal, market design, market fundamentalism, Martin Wolf, money market fund, moral hazard, mortgage debt, Nelson Mandela, new economy, Northern Rock, offshore financial centre, oil shock, paradox of thrift, Pareto efficiency, Paul Samuelson, peak oil, pets.com, Ponzi scheme, post-industrial society, price stability, profit maximization, profit motive, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, rising living standards, Robert Shiller, Robert Shiller, Ronald Reagan, shareholder value, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, statistical model, The Chicago School, The Great Moderation, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, Vilfredo Pareto, Washington Consensus, zero-sum game

Then, forty years after the Great Depression, another enormous economic crisis—the global inflation of the late 1960s and 1970s—inspired the free-market revolution of Margaret Thatcher and Ronald Reagan, creating a third version of capitalism, clearly distinct from the previous two. Forty years after the great inflation of the late 1960s, the global economy was hit by another systemic crisis, in 2007-09. The argument of this book is that this crisis is creating a fourth version of the capitalist system, a new economy as different from the designs of Reagan and Thatcher as those were from the New Deal. Hence the birth of a new economy in the subtitle of this book. The concept of capitalism as an evolutionary system, whose economic rules and political institutions are subject to profound change, may seem controversial and even subversive from the standpoint of precrisis thinking. The Thatcher-Reagan revolution of the early 1980s was widely proclaimed as a rediscovery of true capitalism after the cryptosocialist heresies and deviations of the Keynesian period—and this worldview is still held by most conservative politicians and business leaders.

The propensity of modern economic theory for unjustified and oversimplified assumptions allowed politicians, regulators, and bankers to create for themselves the imaginary world of market fundamentalist ideology, in which financial stability is automatic, involuntary unemployment is impossible, and efficient, omniscient markets can solve all economic problems, if only the government will stand aside. In the new economy emerging from the 2007-09 crisis, the self-serving assumptions of efficient, self-stabilizing markets have been discredited, but something will have to be put in their place. Since the eighteenth century, each transformation of the capitalist system has coincided with a transformed understanding of economics—Smith and Ricardo from 1780 to 1820; the marginalist revolution of Mill, Jevons, and Walras in the 1870s; Keynes in the 1930s; and Friedman in the 1970s.

The third essential feature of the new economics, both as a cause and consequence of the other two, will be a focus on the inherent unpredictability of human behavior and economic events. The emphasis on unpredictability introduced by Keynes, Schumpeter, and Frank Knight will be a guiding principle of the new theories competing for leadership in the intellectual marketplace during the next phase of economic thinking. In the new economy emerging from the 2007-09 crisis, all participants will recognize that the markets and the government are both liable to be wrong. In a world where the future is indeterminate and depends on reflexive interactions between human behavior, expectations, and reality, the concept of a single correct model of how the economy operates, assumed by rational expectations, is an absurd delusion. In an indeterminate world, both economic and institutional decisions will have to proceed by a zigzag process of trial and error.


pages: 457 words: 128,838

The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order by Paul Vigna, Michael J. Casey

Airbnb, altcoin, bank run, banking crisis, bitcoin, blockchain, Bretton Woods, buy and hold, California gold rush, capital controls, carbon footprint, clean water, collaborative economy, collapse of Lehman Brothers, Columbine, Credit Default Swap, cryptocurrency, David Graeber, disintermediation, Edward Snowden, Elon Musk, Ethereum, ethereum blockchain, fiat currency, financial innovation, Firefox, Flash crash, Fractional reserve banking, hacker house, Hernando de Soto, high net worth, informal economy, intangible asset, Internet of things, inventory management, Joi Ito, Julian Assange, Kickstarter, Kuwabatake Sanjuro: assassination market, litecoin, Long Term Capital Management, Lyft, M-Pesa, Marc Andreessen, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, money: store of value / unit of account / medium of exchange, Nelson Mandela, Network effects, new economy, new new economy, Nixon shock, offshore financial centre, payday loans, Pearl River Delta, peer-to-peer, peer-to-peer lending, pets.com, Ponzi scheme, prediction markets, price stability, profit motive, QR code, RAND corporation, regulatory arbitrage, rent-seeking, reserve currency, Robert Shiller, Robert Shiller, Ross Ulbricht, Satoshi Nakamoto, seigniorage, shareholder value, sharing economy, short selling, Silicon Valley, Silicon Valley startup, Skype, smart contracts, special drawing rights, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, supply-chain management, Ted Nelson, The Great Moderation, the market place, the payments system, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, tulip mania, Turing complete, Tyler Cowen: Great Stagnation, Uber and Lyft, uber lyft, underbanked, WikiLeaks, Y Combinator, Y2K, zero-sum game, Zimmermann PGP

One solution that the Film Annex is now pursuing in conjunction with bitcoin-trading platform Atlas ATS is a Pakistan-based exchange for swapping bitcoins into traditional currencies. But Rulli only reluctantly went along with this; it was too soft an option, he felt. He wanted the exchange to be solely in bitcoin for other digital currencies, with no option to buy rupees or dollars: “The belief I have is that if you lock these people into this new economy, they will make that new economy as efficient as possible. If you start giving people opportunities to get out of the economy, they will just cut it down, whereas if the only way for you to enrich yourself is by trading bitcoins for litecoins and dogecoins, you are going to become an expert in that … you will become the best trader in Pakistan.” Rulli prefers to focus on another route that the Film Annex has pursued to give his contributors spending options.

If you believe the copy of this e-book you are reading infringes on the authors’ copyright, please notify the publisher at: us.macmillanusa.com/piracy. For Elizabeth —PV For Mum and Dad —MC Contents Title Page Copyright Notice Dedication Introduction: Digital Cash for a Digital Age 1. From Babylon to Bitcoin 2. Genesis 3. Community 4. Roller Coaster 5. Building the Blockchain 6. The Arms Race 7. Satoshi’s Mill 8. The Unbanked 9. The Everything Blockchain 10. Square Peg Meets Round Hole 11. A New New Economy Conclusion: Come What May Acknowledgments Notes Index Also by Michael J. Casey About the Authors Copyright Introduction DIGITAL CASH FOR A DIGITAL AGE Money won’t create success, the freedom to make it will. —Nelson Mandela Even though Parisa Ahmadi was in the top of her class at the all-girls Hatifi High School in Herat, Afghanistan, her family was initially against her enrolling in classes being offered by a private venture that promised to teach young girls Internet and social-media skills—and even pay them for their efforts.

And society itself is already undergoing profound change, the result of sweeping technological, demographic, and global economic shifts. In this evolving environment, cryptocurrencies are poised to play a highly disruptive role. It will be up to us, the citizens, voters, and economic agents of this future society, to figure out how much of a role we want this technology to take and thus which of the two cryptocurrency models ends up dominant. Eleven A NEW NEW ECONOMY Progress is a comfortable disease. —E. E. Cummings Until now, we’ve largely focused on how cryptocurrencies have developed and the benefits and challenges they pose to society. But these new forms of money and ways of organizing commercial activity are not landing in a static, dormant society, as if human beings were just waiting to be woken by a new monetary idea. Society itself is changing, rapidly.


pages: 443 words: 112,800

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

"Robert Solow", 3D printing, additive manufacturing, Albert Einstein, American ideology, barriers to entry, borderless world, carbon footprint, centre right, collaborative consumption, collaborative economy, Community Supported Agriculture, corporate governance, decarbonisation, distributed generation, en.wikipedia.org, energy security, energy transition, global supply chain, hydrogen economy, income inequality, industrial cluster, informal economy, Intergovernmental Panel on Climate Change (IPCC), invisible hand, Isaac Newton, job automation, knowledge economy, manufacturing employment, marginal employment, Martin Wolf, Masdar, megacity, Mikhail Gorbachev, new economy, off grid, oil shale / tar sands, oil shock, open borders, peak oil, Ponzi scheme, post-oil, purchasing power parity, Ray Kurzweil, Ronald Reagan, scientific worldview, Silicon Valley, Simon Kuznets, Skype, smart grid, smart meter, Spread Networks laid a new fibre optics cable between New York and Chicago, supply-chain management, the market place, The Wealth of Nations by Adam Smith, Thomas Malthus, too big to fail, transaction costs, trickle-down economics, urban planning, urban renewal, Yom Kippur War, Zipcar

The new, second-generation electricity communication, by contrast, is distributed in nature and ideally suited to manage distributed forms of energy—that is, renewable energy—and the lateral kinds of business activity that accompany such an energy regime. The new distributed communications technologies would have to wait another two decades to hook up with distributed energies and create the basis for a new infrastructure and a new economy. In the 1990s and the first decade of the twenty-first century, the Information and Communication Technology (ICT) revolution was grafted on to the older, centralized Second Industrial Revolution. It was, from the start, an unnatural fit. While ICT enhanced productivity, streamlined practices, and created some new business opportunities and jobs—which probably extended the useful life of an aging industrial model—it could never achieve its full distributed communication potential because of the inherent constraints that come with being attached to a centralized energy regime and commercial infrastructure.

The funds will be used to install digital electric meters, transmission grid sensors, and energy storage technologies to enable high-tech electricity distribution; this will transform the existing power grid into an Internet of energy. CPS Energy in San Antonio, Texas; Xcel Utility in Boulder, Colorado; and PG&E, Sempra, and Southern ConEdison in California will be laying down parts of the smart grid over the next several years. The smart grid is the backbone of the new economy. Just as the Internet created thousands of new businesses and millions of new jobs, so too will the intelligent electricity network—except “this network will be 100 or 1,000 times larger than the Internet,” says Marie Hattar, vice president of marketing in Cisco’s network systems solutions group. Hattar points out that while “some homes have Internet access, . . . some don’t. Everyone has electricity access—all of those homes could potentially be connected.”39 For twenty years, heads of state and global business leaders asked me, “How do you expect to manage the energy needs of a complex global economy with ‘soft’ renewable energies?”

Again, this assumes that the city takes a systems approach in laying out a new infrastructure. The real multiplier effect occurs when the interaction between pillars gives rise to a new emergent paradigm. While each of the five pillars that make up the Third Industrial Revolution infrastructure, taken alone, would add only marginal value to the economy, when they are connected in an interactive system that acts like an evolving organism, the new economy takes off. And just like any organism, it passes through a juvenile, mature, and senescent stage. I stress this because our team ran up against a miscommunication that threatened to undermine our efforts in the weeks just before CPS was to formally release the master plan to the public. CPS told news sources that our Third Industrial Revolution plan was going to cost a whopping $16 billion and significantly increase electricity bills.


When the Money Runs Out: The End of Western Affluence by Stephen D. King

Albert Einstein, Asian financial crisis, asset-backed security, banking crisis, Basel III, Berlin Wall, Bernie Madoff, British Empire, business cycle, capital controls, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, congestion charging, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, crony capitalism, cross-subsidies, debt deflation, Deng Xiaoping, Diane Coyle, endowment effect, eurozone crisis, Fall of the Berlin Wall, financial innovation, financial repression, fixed income, floating exchange rates, full employment, George Akerlof, German hyperinflation, Hyman Minsky, income inequality, income per capita, inflation targeting, invisible hand, John Maynard Keynes: Economic Possibilities for our Grandchildren, joint-stock company, Kickstarter, liquidationism / Banker’s doctrine / the Treasury view, liquidity trap, London Interbank Offered Rate, loss aversion, market clearing, mass immigration, moral hazard, mortgage debt, new economy, New Urbanism, Nick Leeson, Northern Rock, Occupy movement, oil shale / tar sands, oil shock, old age dependency ratio, price mechanism, price stability, quantitative easing, railway mania, rent-seeking, reserve currency, rising living standards, South Sea Bubble, sovereign wealth fund, technology bubble, The Market for Lemons, The Spirit Level, The Wealth of Nations by Adam Smith, Thomas Malthus, Tobin tax, too big to fail, trade route, trickle-down economics, Washington Consensus, women in the workforce, working-age population

The second, predating the financial crisis that began in 2007, was simply a loss of momentum following the exuberance associated 28 4099.indd 28 29/03/13 2:23 PM Taking Progress for Granted with the so-­called ‘new economy’ in the 1990s. This seemingly miraculous development offered an intoxicating mix of rapid productivity gains (particularly in the US), technological advance, strong growth, low inflation and ever higher stock prices. The elixir of ever rising wealth that, temporarily, had been Japan’s monopoly to enjoy in the 1980s had been uncovered by the US and, in patchy fashion, by Europe too. Technology companies with only the vaguest of business plans found that money grew on trees, a repeat of the extraordinary events first seen in the 1720 South Sea Bubble when, famously, a company hoped to raise money ‘for carrying out an undertaking of great advantage, but nobody to know what it is’. Such was the enthusiasm for the new economy that Business Week ran the following story at the end of January 2000 under the headline ‘The New Economy: It works in America: Will it go global?’

Such was the enthusiasm for the new economy that Business Week ran the following story at the end of January 2000 under the headline ‘The New Economy: It works in America: Will it go global?’ It seems almost too good to be true. With the information technology sector leading the way, the U.S. has enjoyed almost 4% growth since 1994. Unemployment has fallen from 6% to about 4%, and inflation just keeps getting lower and lower. Leaving out food and energy, consumer inflation in 1999 was only 1.9%, the smallest increase in 34 years. This spectacular boom was not built on smoke and mirrors. Rather, it reflects a willingness to undertake massive risky investments in innovative information technology, combined with a decade of retooling U.S. financial markets, governments, and corporations to cut costs and increase flexibility and efficiency. The result is the so-­called New Economy: faster growth and lower inflation.

L. 41 Knickerbocker Trust Company 131 Korea 14, 193, 195, 202–4, 205 Krugman, Paul 112–15, 117, 118–19 labour market 115–16, 252 productivity 53 Landes, David 26 Latin American debt crisis 216 Layard, Richard 114, 117 Lehman Brothers 30, 255 Leveson inquiry 148 Libor 126 life expectancy 47 liquidity 84, 90 liquidity trap 72 Liquidity Coverage Ratio (LCR) 83 Little Dorrit (Dickens) 138–9 living standards 11, 27, 158, 169, 180–1 belief in ever rising 13, 34 China 27 Indonesia 197 Japan 23 Korea 195 late 19th century 185, 186 Malaysia 198 post-Second World War 139 US 11, 163 loan-to-value ratios, mortgage 51–2 Long Depression 189–90 loss aversion 40–1 lotteries 164–5 Macroeconomic Imbalance Procedure (MIP) 233 macroeconomic policies 32, 60, 121, 181, 253 Japan 21 macroprudential rules 256 Madoff, Bernie 35 Mahathir Mohamad 198–201, 205 Malaysia 193, 198–201, 205 Malthus, Thomas 37–9 Manchester United 165–6 Marr, Wilhelm 189 Marx, Karl 57, 179–80 Mary Poppins 131–2 May Report 98 Megawati Sukarnoputri 197 Mellon, Andrew 106, 108 Mexico 158 Mieno, Yasushi 21 miners 103–4 Mississippi 163 mistrust creditors and debtors 141 cross-border 176 endemic 147–9 governments 140, 217–18 of money 219–21 and political extremism 227 monetarism 59 monetary policy 58, 68–74, 77–9, 87–9, 97, 111–12 a new monetary framework 245–50 see also Gold Standard; interest rates; quantitative easing (QE) Monetary Policy Committee 90–1 monetary unions 236–7 see also eurozone moral hazard 62 mortgage-backed securities 30, 65, 136–7 mortgages 51–2, 63–5 Napoleon Bonaparte 156 Napoleon III 182 National Bank of North America 131 national incomes 32, 49–50, 141–2, 247 Germany 33 Japan 32 UK 33, 110–11, 112 US 33, 70, 109, 115, 117–18 284 4099.indd 284 29/03/13 2:23 PM Index National Lottery 164–5 nationalism 228 the Netherlands 48 New Deal 108–9 ‘new economy’ of the 1990s 29–30 New Order (Indonesia) 197 New Zealand 187 Nicholson, Viv 50 Nigeria 19 Northern Rock 30, 51–2, 129, 255 Norway 158 Occupy movement 162, 170–1 Office for Budget Responsibility 33 Oliver Twist (Dickens) 43 Osborne, George 231 Overend, Gurney and Co. 131 painkillers 70–1, 89 ‘The Panic of 1873’ 186 Paul, Ron 93 Peasants’ Revolt 213 Pension Protection Fund (PPF) 172 pensioners’ voting patterns 88 pensions 47, 51, 75, 171–3, 174 per capita incomes 27, 49, 159–60, 163 Argentina and Germany 14 China 251 France 101, 105 Germany 101, 105 India 27, 251 Indonesia 197 Japan 21 Korea 202 Malaysia 198 UK 1, 44, 101, 105 US 14, 101, 105 Perón, Eva 16 Perón, Juan 16–17 Pew Center report 173 Pickett, Kate 159 Pigou, Arthur 59 policies and central bankers 65 fiscal 58, 66–7, 69–70, 77–8, 246–7 macroeconomic 21, 32, 60, 121, 181, 253 monetary 58, 68–74, 77–9, 87–9, 97, 111–12 new monetary framework 245–50 political extremism 226–9 politics and central bankers 78, 89–90, 91–5 and economics 24–6, 34, 102, 191–2, 217 and the eurozone 224–5, 237 and expectations 152–3 and income inequality 160–1 and lack of trust 147–8, 149 and monetary regimes 119–20 voters 50, 78, 88, 222, 242–4 poll tax 211 populations, ageing 78, 88, 250 age-related expenditure 48 generational divide 171–4, 241, 243–5 Germany 136 Japan 23, 25 Portugal 50, 146, 158, 191 precious metal standards 183–4 see also Gold Standard prices asset 73 commodity 77, 109, 116–17 rising 157 see also deflation; inflation property sector see housing markets protectionism 214–15 capital controls 16, 199–200, 201, 234 tariffs 16 Protestant work ethic 26, 28 public sector see governments public spending 49–50, 66, 142, 147–8, 203 government spending 58, 109, 119 social spending 45–7 quantitative easing (QE) 72–82, 84–6, 91, 97, 176–7 ratings agencies 234–5 rationing 114–15, 142–3 recessions 2 recovery from the Asian crisis 195–6, 204–5, 206, 208–9 UK in the 1930s 101–2 redistribution by stealth 90 Reform Acts 222, 242–3 regulation 125, 256 dangers of further 214, 251 dollar transactions 177 reduction 168 the regulatory trap 83–4 Statute of Labourers 213 renminbi (currency) 177 Réveillon, Jean-Baptiste 155–6 Ricardo, David 183–4 Richard II 211–12 ringgit (currency) 198 285 4099.indd 285 29/03/13 2:23 PM When the Money Runs Out risk and banks 255–6 creditors and debtors imbalance 234 and financial services 168 and rapid economic change 170 risk aversion 216 Roosevelt, Franklin Delano 107–9, 117–18, 119, 219 Royal Bank of Scotland 30 Royal Navy 99 Russia 117, 135 Rwanda 19 Samuel, Herbert 104 Saudi Arabia 117, 135 savers and banks 136 confidence 65 and illusions 137 and income inequality 162–3 and interest rates 90, 91, 97 and the subprime boom 133–4 schisms between debtors and creditors 174–7, 191 generational 170–4 income inequality 158–70 Schwartz, Anna 59, 106, 188 second-hand car market 123–4 Sierra Leone 163 silver standard 183 SIVs (structured investment vehicles) 129–30 Skidelsky, R. and E. 37 Smith, Adam 39–40, 207 melancholy state 42, 124–5, 159–60 Snowden’s budget 99–102, 105 soccer 165 social contract, between generations 244–5 social insurance 44–8 social security systems 12 social spending 45–7 Soros, George 200 South Korea 14, 193, 195, 202–4, 205 South Sea Bubble 29 space exploration 9–10, 35 Spain deficit 54, 134 and the eurozone 191, 235–6 exports 82 fiscal position 85 government borrowing 144 interest rates 146 political disenfranchisement 95 property bubble 140 suicide of Amaia Egana 153 spending government 58, 109, 119 public sector 49–50, 66, 142, 147–8, 203 social 45–7 stagnation 37–43, 50, 52–3, 158, 219 and political extremism 227–8 Standard & Poor’s 80 ‘stately home’ effect 221–3 Statute of Labourers 211, 213 sterling 98–106, 110 Stern Review 38–9 stimulus 3–4 and jobs 116 monetary and fiscal 30, 57–8, 181 Paul Krugman 112–15, 118–19 policy 32, 69–70, 82 political debate 205 prior to the financial crisis 67 stock markets 20–1, 30, 193 stock-market crashes 18, 61–2, 66, 99, 186 Straw, Jack 212 structured investment vehicles (SIVs) 129–30 subprime boom 130, 133–4 crisis 190 Suharto 196–7, 205 surpluses 66, 135–7, 204, 232–4 Sweden 158, 204 Switzerland 158, 184 Taiwan 14 Takeshita, Noburo 24 Tanzania 19 tariffs 16 tax avoidance 49, 211, 214 taxation ancien régime and the French Revolution 154–5 death duties 139 medieval poll tax 211 taxpayers 145, 170, 174, 215, 254 technological progress 2–3, 10–11 dotcom bubble 169 and financial industry wages 167 Industrial Revolution 38 Thailand 193, 195 Thaler, R.


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The Option of Urbanism: Investing in a New American Dream by Christopher B. Leinberger

addicted to oil, American Society of Civil Engineers: Report Card, asset allocation, big-box store, centre right, commoditize, credit crunch, David Brooks, desegregation, Donald Trump, drive until you qualify, edge city, full employment, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, knowledge economy, McMansion, mortgage tax deduction, new economy, New Urbanism, peak oil, Ponzi scheme, postindustrial economy, RAND corporation, Report Card for America’s Infrastructure, reserve currency, Richard Florida, Seaside, Florida, the built environment, transit-oriented development, urban planning, urban renewal, urban sprawl, walkable city, white flight

The next American Dream is not based upon nostalgic memory of what we have lost—the memory of 1955 Hill Valley—in our rush to build drivable sub-urban development. Nor is it just the recognition that the unintended consequences of 1985 Hill Valley, drivable sub-urbanism, including a myriad of social, environmental, fiscal, and economic issues, need to be addressed and solved. The next American Dream is based upon the recognition that the market wants a built environment that provides choice, lines up with the new economy that is emerging and is more environmentally, fiscally, and economically sustainable. This book also points out some of the probable unintended consequences of this next American Dream—it wouldn’t be fair if we didn’t leave our grandchildren some problems to solve. 1 F UTUR AMA AND THE 20 TH -C ENTURY A MERICAN D REAM I magine yourself living a middle-class life in 1939 in one of America’s cities, such as Philadelphia, Chicago, or Seattle.

This second version of the American Dream manifested itself far differently than the agricultural version in its effect on the built environment, because a suburban subdivision obviously is laid out on the ground far differently than is a farm. However, this change showed that the American Dream is not immutable; its physical development could be fundamentally modified. In 1920, manufacturing jobs caught up with agricultural jobs; each sector had about twenty-six percent of the total jobs in the economy. This signaled the shift to the then new economy, the industrial economy, which was primarily based in metropolitan areas. In the 1920 U.S. Census, for the first time in American history, a majority of Americans were living in metropolitan areas, not in rural areas.24 24 | THE OPTION OF URBANISM Manufacturing jobs stayed at about twenty-six percent of all U.S. jobs until 1970, the peak of the industrial economy. But it was not just an industrial economy, it was a car-based industrial economy.25 At the 1970s peak, the automotive sector of the economy (car manufacturing and suppliers) held 1.7 percent of all jobs and accounted for two percent of the economy.26 However, these figures do not count the other sectors of the economy necessary for automotive manufacturing, maintenance, operations, and finance—the oil industry, steel, mining, car sales and repair, car finance and insurance, road building and repair, etc., which multiplies those totals many times.27 In total, the direct impact of automobile manufacturing and the many ancillary businesses was at least ten percent of all jobs at its peak and, therefore, possibly a third of all jobs when the indirect impact (the “ripple effect”) is considered.

The late sociologist Robert Nisbet was convinced that boredom is a major cause in motivating societal actions—people got bored with the negative consequences. The boredom of having only the option of drivable sub-urban life, including the unintended consequences of ever longer and more congested commutes and the running of nearly every errand in a car, is not to be underestimated. T H E M A R K E T R E D I S C OV E R S WA L K A B L E U R B A N I S M | 9 1 Alongside these demographic changes, the economy has made a fundamental change. The new economy has been called many things: the virtual economy, the service economy, the postindustrial economy, the knowledge economy, and the creative economy. This has come to mean a focus on the up front, creative portion of a product or service development and the back-end marketing and distribution of that product or service. The actual production may be outsourced abroad, or it may be accomplished with fewer employees in this country due to advances in technology, which lead to increased productivity.


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The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin

"Robert Solow", 3D printing, active measures, additive manufacturing, Airbnb, autonomous vehicles, back-to-the-land, big-box store, bioinformatics, bitcoin, business process, Chris Urmson, clean water, cleantech, cloud computing, collaborative consumption, collaborative economy, Community Supported Agriculture, Computer Numeric Control, computer vision, crowdsourcing, demographic transition, distributed generation, en.wikipedia.org, Frederick Winslow Taylor, global supply chain, global village, Hacker Ethic, industrial robot, informal economy, Intergovernmental Panel on Climate Change (IPCC), intermodal, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Julian Assange, Kickstarter, knowledge worker, longitudinal study, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, market design, mass immigration, means of production, meta analysis, meta-analysis, natural language processing, new economy, New Urbanism, nuclear winter, Occupy movement, off grid, oil shale / tar sands, pattern recognition, peer-to-peer, peer-to-peer lending, personalized medicine, phenotype, planetary scale, price discrimination, profit motive, QR code, RAND corporation, randomized controlled trial, Ray Kurzweil, RFID, Richard Stallman, risk/return, Ronald Coase, search inside the book, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, smart grid, smart meter, social web, software as a service, spectrum auction, Steve Jobs, Stewart Brand, the built environment, The Nature of the Firm, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transaction costs, urban planning, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog, Whole Earth Review, WikiLeaks, working poor, zero-sum game, Zipcar

While I suspect that capitalism will remain part of the social schema for at least the next half century or so, I doubt that it will be the dominant economic paradigm by the second half of the twenty-first century. Although the indicators of the great transformation to a new economic system are still soft and largely anecdotal, the Collaborative Commons is ascendant and, by 2050, it will likely settle in as the primary arbiter of economic life in most of the world. An increasingly streamlined and savvy capitalist system will continue to soldier on at the edges of the new economy, finding sufficient vulnerabilities to exploit, primarily as an aggregator of network services and solutions, allowing it to flourish as a powerful niche player in the new economic era, but it will no longer reign. I understand that this seems utterly incredible to most people, so conditioned have we become to the belief that capitalism is as indispensable to our well-being as the air we breathe.

[companies] must be able to anticipate selling their products at a profit to someone.11 Summers and DeLong opposed government subsidies to cover the upfront costs, arguing that the shortcomings of “administrative bureaucracy,” “group-think,” and “red-tape” “destroy the entrepreneurial energy of the market.”12 In lieu of government intervention, the two distinguished economists reluctantly suggested that perhaps the best way to protect innovation in an economy where “goods are produced under conditions of substantial increasing returns to scale” was to favor short-term natural monopolies.13 Summers and DeLong made the point that “temporary monopoly power and profits are the reward needed to spur private enterprise to engage in such innovation.”14 They both realized the bind this put private enterprise in, admitting that “natural monopoly does not meet the most basic conditions for economic efficiency: that price equal marginal cost.”15 Indeed, the modus operandi of a monopoly, as every economist knows, is to hold back would-be competitors from introducing new innovations that increase productivity, reduce marginal costs, and lower the price to customers. Nonetheless, Summers and DeLong concluded that in the “new economy” this might be the only way forward. In an incredible admission, the two acknowledged that “the right way to think about this complex set of issues is not clear, but it is clear that the competitive paradigm cannot be fully appropriate . . . but we do not yet know what the right replacement paradigm will be.”16 Summers and DeLong found themselves hopelessly trapped. Although economists and entrepreneurs never intended for the capitalist system to self-destruct (they expected it to reign forever), a careful look at its operating logic reveals the inevitability of a future of near zero marginal cost.

They are also sharing cars, homes, and even clothes with one another via social media sites, rentals, redistribution clubs, and cooperatives, at low or near zero marginal cost. An increasing number of people are collaborating in “patient-driven” health-care networks to improve diagnoses and find new treatments and cures for diseases, again at near zero marginal cost. And young social entrepreneurs are establishing ecologically sensitive businesses, crowdfunding new enterprises, and even creating alternative social currencies in the new economy. The result is that “exchange value” in the marketplace is increasingly being replaced by “shareable value” on the Collaborative Commons. When prosumers share their goods and services on a Collaborative Commons, the rule book that governs a market-exchange economy becomes far less relevant to the life of society. The current debate among economists, business leaders, and public officials on what appears to be a new type of long-term economic stagnation emerging around the world is an indicator of the great transformation taking place as the economy shifts from exchange value in the marketplace to sharable value on the Collaborative Commons.


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Zero to One: Notes on Startups, or How to Build the Future by Peter Thiel, Blake Masters

Airbnb, Albert Einstein, Andrew Wiles, Andy Kessler, Berlin Wall, cleantech, cloud computing, crony capitalism, discounted cash flows, diversified portfolio, don't be evil, Elon Musk, eurozone crisis, income inequality, Jeff Bezos, Lean Startup, life extension, lone genius, Long Term Capital Management, Lyft, Marc Andreessen, Mark Zuckerberg, minimum viable product, Nate Silver, Network effects, new economy, paypal mafia, Peter Thiel, pets.com, profit motive, Ralph Waldo Emerson, Ray Kurzweil, self-driving car, shareholder value, Silicon Valley, Silicon Valley startup, Singularitarianism, software is eating the world, Steve Jobs, strong AI, Ted Kaczynski, Tesla Model S, uber lyft, Vilfredo Pareto, working poor

If you can identify a delusional popular belief, you can find what lies hidden behind it: the contrarian truth. Consider an elementary proposition: companies exist to make money, not to lose it. This should be obvious to any thinking person. But it wasn’t so obvious to many in the late 1990s, when no loss was too big to be described as an investment in an even bigger, brighter future. The conventional wisdom of the “New Economy” accepted page views as a more authoritative, forward-looking financial metric than something as pedestrian as profit. Conventional beliefs only ever come to appear arbitrary and wrong in retrospect; whenever one collapses, we call the old belief a bubble. But the distortions caused by bubbles don’t disappear when they pop. The internet craze of the ’90s was the biggest bubble since the crash of 1929, and the lessons learned afterward define and distort almost all thinking about technology today.

In mid-2000, G7 central bankers had to prop it up with a multibillion-dollar intervention. So the backdrop for the short-lived dot-com mania that started in September 1998 was a world in which nothing else seemed to be working. The Old Economy couldn’t handle the challenges of globalization. Something needed to work—and work in a big way—if the future was going to be better at all. By indirect proof, the New Economy of the internet was the only way forward. MANIA: SEPTEMBER 1998–MARCH 2000 Dot-com mania was intense but short—18 months of insanity from September 1998 to March 2000. It was a Silicon Valley gold rush: there was money everywhere, and no shortage of exuberant, often sketchy people to chase it. Every week, dozens of new startups competed to throw the most lavish launch party. (Landing parties were much more rare.)

Kaczynski, Ted Karim, Jawed Karp, Alex, 11.1, 12.1 Kasparov, Garry Katrina, Hurricane Kennedy, Anthony Kesey, Ken Kessler, Andy Kurzweil, Ray last mover, 11.1, 13.1 last mover advantage lean startup, 2.1, 6.1, 6.2 Levchin, Max, 4.1, 10.1, 12.1, 14.1 Levie, Aaron lifespan life tables LinkedIn, 5.1, 10.1, 12.1 Loiseau, Bernard Long-Term Capital Management (LTCM) Lord of the Rings (Tolkien) luck, 6.1, 6.2, 6.3, 6.4 Lucretius Lyft MacBook machine learning Madison, James Madrigal, Alexis Manhattan Project Manson, Charles manufacturing marginal cost marketing Marx, Karl, 4.1, 6.1, 6.2, 6.3 Masters, Blake, prf.1, 11.1 Mayer, Marissa Medicare Mercedes-Benz MiaSolé, 13.1, 13.2 Michelin Microsoft, 3.1, 3.2, 3.3, 4.1, 5.1, 14.1 mobile computing mobile credit card readers Mogadishu monopoly, monopolies, 3.1, 3.2, 3.3, 5.1, 7.1, 8.1 building of characteristics of in cleantech creative dynamism of new lies of profits of progress and sales and of Tesla Morrison, Jim Mosaic browser music recording industry Musk, Elon, 4.1, 6.1, 11.1, 13.1, 13.2, 13.3 Napster, 5.1, 14.1 NASA, 6.1, 11.1 NASDAQ, 2.1, 13.1 National Security Agency (NSA) natural gas natural secrets Navigator browser Netflix Netscape NetSecure network effects, 5.1, 5.2 New Economy, 2.1, 2.2 New York Times, 13.1, 14.1 New York Times Nietzsche, Friedrich Nokia nonprofits, 13.1, 13.2 Nosek, Luke, 9.1, 14.1 Nozick, Robert nutrition Oedipus, 14.1, 14.2 OfficeJet OmniBook online pet store market Oracle Outliers (Gladwell) ownership Packard, Dave Page, Larry Palantir, prf.1, 7.1, 10.1, 11.1, 12.1 PalmPilots, 2.1, 5.1, 11.1 Pan, Yu Panama Canal Pareto, Vilfredo Pareto principle Parker, Sean, 5.1, 14.1 Part-time employees patents path dependence PayPal, prf.1, 2.1, 3.1, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 8.1, 9.1, 9.2, 10.1, 10.2, 10.3, 10.4, 11.1, 11.2, 12.1, 12.2, 14.1 founders of, 14.1 future cash flows of investors in “PayPal Mafia” PCs Pearce, Dave penicillin perfect competition, 3.1, 3.2 equilibrium of Perkins, Tom perk war Perot, Ross, 2.1, 12.1, 12.2 pessimism Petopia.com Pets.com, 4.1, 4.2 PetStore.com pharmaceutical companies philanthropy philosophy, indefinite physics planning, 2.1, 6.1, 6.2 progress without Plato politics, 6.1, 11.1 indefinite polling pollsters pollution portfolio, diversified possession power law, 7.1, 7.2, 7.3 of distribution of venture capital Power Sellers (eBay) Presley, Elvis Priceline.com Prince Procter & Gamble profits, 2.1, 3.1, 3.2, 3.3 progress, 6.1, 6.2 future of without planning proprietary technology, 5.1, 5.2, 13.1 public opinion public relations Pythagoras Q-Cells Rand, Ayn Rawls, John, 6.1, 6.2 Reber, John recession, of mid-1990 recruiting, 10.1, 12.1 recurrent collapse, bm1.1, bm1.2 renewable energy industrial index research and development resources, 12.1, bm1.1 restaurants, 3.1, 3.2, 5.1 risk risk aversion Romeo and Juliet (Shakespeare) Romulus and Remus Roosevelt, Theodore Royal Society Russia Sacks, David sales, 2.1, 11.1, 13.1 complex as hidden to non-customers personal Sandberg, Sheryl San Francisco Bay Area savings scale, economies of Scalia, Antonin scaling up scapegoats Schmidt, Eric search engines, prf.1, 3.1, 5.1 secrets, 8.1, 13.1 about people case for finding of looking for using self-driving cars service businesses service economy Shakespeare, William, 4.1, 7.1 Shark Tank Sharma, Suvi Shatner, William Siebel, Tom Siebel Systems Silicon Valley, 1.1, 2.1, 2.2, 2.3, 5.1, 5.2, 6.1, 7.1, 10.1, 11.1 Silver, Nate Simmons, Russel, 10.1, 14.1 singularity smartphones, 1.1, 12.1 social entrepreneurship Social Network, The social networks, prf.1, 5.1 Social Security software engineers software startups, 5.1, 6.1 solar energy, 13.1, 13.2, 13.3, 13.4 Solaria Solyndra, 13.1, 13.2, 13.3, 13.4, 13.5 South Korea space shuttle SpaceX, prf.1, 10.1, 11.1 Spears, Britney SpectraWatt, 13.1, 13.2 Spencer, Herbert, 6.1, 6.2 Square, 4.1, 6.1 Stanford Sleep Clinic startups, prf.1, 1.1, 5.1, 6.1, 6.2, 7.1 assigning responsibilities in cash flow at as cults disruption by during dot-com mania economies of scale and foundations of founder’s paradox in lessons of dot-com mania for power law in public relations in sales and staff of target market for uniform of venture capital and steam engine Stoppelman, Jeremy string theory strong AI substitution, complementarity vs.


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The Innovation Illusion: How So Little Is Created by So Many Working So Hard by Fredrik Erixon, Bjorn Weigel

"Robert Solow", Airbnb, Albert Einstein, American ideology, asset allocation, autonomous vehicles, barriers to entry, Basel III, Bernie Madoff, bitcoin, Black Swan, blockchain, BRICs, Burning Man, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Cass Sunstein, Clayton Christensen, Colonization of Mars, commoditize, corporate governance, corporate social responsibility, creative destruction, crony capitalism, dark matter, David Graeber, David Ricardo: comparative advantage, discounted cash flows, distributed ledger, Donald Trump, Elon Musk, Erik Brynjolfsson, fear of failure, first square of the chessboard / second half of the chessboard, Francis Fukuyama: the end of history, George Gilder, global supply chain, global value chain, Google Glasses, Google X / Alphabet X, Gordon Gekko, high net worth, hiring and firing, Hyman Minsky, income inequality, income per capita, index fund, industrial robot, Internet of things, Jeff Bezos, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kevin Kelly, knowledge economy, laissez-faire capitalism, Lyft, manufacturing employment, Mark Zuckerberg, market design, Martin Wolf, mass affluent, means of production, Mont Pelerin Society, Network effects, new economy, offshore financial centre, pensions crisis, Peter Thiel, Potemkin village, price mechanism, principal–agent problem, Productivity paradox, QWERTY keyboard, RAND corporation, Ray Kurzweil, rent-seeking, risk tolerance, risk/return, Robert Gordon, Ronald Coase, Ronald Reagan, savings glut, Second Machine Age, secular stagnation, Silicon Valley, Silicon Valley startup, Skype, sovereign wealth fund, Steve Ballmer, Steve Jobs, Steve Wozniak, technological singularity, telemarketer, The Chicago School, The Future of Employment, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, total factor productivity, transaction costs, transportation-network company, tulip mania, Tyler Cowen: Great Stagnation, uber lyft, University of East Anglia, unpaid internship, Vanguard fund, Yogi Berra

The fact that a lot of entertainment and information is free at marginal cost is because the marginal value of those services is pretty low. It is a standard lesson of microeconomics that marginal cost equals marginal value – and new digital services are better than offline services in exploiting the relation between costs and value for consumers, especially at the margin. Present criticism of GDP standards often resembles the idea some 20 years ago about a “new economy” that would change the way the economy works. Like the belief in the new economy, there are charges of GDP mismeasurement that confuse definitions of GDP and value-added creation in the economy. Some of it goes back to corporate valuation: the high valuation of companies is a sign of markets understanding the real value generation of, say, free online services that statistical authorities are not capturing. However, despite high corporate valuations, many technology firms clearly struggle to develop sustainable business models.

., “Growth and Renewal in the United States,” 28–9. 57.OECD, “Growing Income Inequality in OECD Countries.” 58.Mui, “Companies Have Found Something to Give their Workers.” 59.Mui, “Companies Have Found Something to Give their Workers.” 60.Lawrence, “The Growing Gap between Real Wages and Labor Productivity.” 61.Shapiro, “Income Growth and Decline.” 62.Karabarbounis and Neiman, “The Global Decline of the Labor Share.” 63.Benzell et al., “Robots Are Us.” 64.Groemling, “Falling Labor Share in Germany,” 1–20. 65.Feldstein, “Did Wages Reflect Growth in Productivity?” 66.Bridgam, “Is Labor’s Loss Capital’s Gain?” 67.Diewert and Fox. “The New Economy and an Old Problem.” 68.Lawrence, “Recent Declines in Labor’s Share in US Income.” 69.Acemoglu and Robinson, “The Rise and Decline of General Laws of Capitalism.” 70.Pessoa and Van Reenen, “Decoupling of Wage Growth and Productivity Growth?” 71.Roine and Waldenström, “On the Role of Capital Gains in Swedish Income Inequality.” 72.Konjunktur Institutet, “Lönebildningsrapporten,” 30. 73.US President, “Economic Report,” 34. 74.US President, “Economic Report,” 34. 75.Mokyr, “What Today’s Economic Gloomsayers Are Missing.” 76.Marvin, When Old Technologies Were New. 77.Frey and Osborne, “The Future of Employment,” 45. 78.Ford, Rise of the Robots, 284. 79.Kan, “Foxconn Expects Robots to Take over More Factory Work.” 80.Kan, “Foxconn Expects Robots to Take over More Factory Work.” 81.Kan, “Foxconn’s CEO Backpedals on Robot Takeover at Factories.” 82.IFR, “Robots Improve Manufacturing Success and Create Jobs.” 83.Graetz and Michaels, “Robots at Work.” 84.Fox Nation, “Obama Blames ATMs for High Unemployment.” 85.Bessen, Learning by Doing, 108. 86.Approximately in 1745 in England, and one year later in France. 87.Joyce, Ulysses, 82. 88.Rothschild, “The Sourdough Hotel.” 89.Marx and Engels, The Communist Manifesto, 12. 90.Haltiwanger, Hathaway, and Miranda, “Declining Business Dynamism in the US High-Technology Sector,” 1. 91.Andrews, Criscuolo, and Gal, “Frontier Firms, Technology Diffusion and Public Policy,” 14. 9 The Future and How to Prevent It 1.Toynbee, A Study of History: Abridgement of Volumes I–VI, 273. 2.Buiter, Rahbari, and Seydl, “The Long-Run Decline in Advanced-Economy Investment.” 3.Kotlikoff and Burns, The Clash of Generations, 229. 4.Wilson and Purushothaman, “Dreaming with BRICs.” 5.Xie, “Goldman’s BRIC Era Ends.” 6.Das, India Grows at Night. 7.Magnus, “Hitting a BRIC Wall.” 8.IMF, “Adjusting to Lower Commodity Prices.” 9.Hoenig, “Back to Basics.” 10.The Economist, “One Regulator to Rule Them All.” 11.Zingales, “Does Finance Benefit Society?”

World Economy, 32.9 (2009): 1271–90. Dettmer, Bianka, Fredrik Erixon, Andrea Freytag, and Pierre-Olivier Legault Tremblay, “The Dynamics of Structural Change: Trade between the European Union and China.” Chinese Economy, 44.4 (2011): 42–74. DOI:10.2753/CES1097-1475440403. Diamandis, Peter H., and Steven Kotler, Abundance: The Future Is Better Than You Think. Free Press, 2012. Diewert, W. Erwin, and Kevin J. Fox, “The New Economy and an Old Problem: Net versus Gross Output.” Center for Applied Economic Research, Jan. 2005. Doidge, Craig, G. Andrew Karolyi, and René M. Stulz, “The US Listing Gap.” NBER Working Paper No. 21181. National Bureau of Economic Research, May 2015. Downes, Larry, “Fewer, Faster, Smarter.” Democracy, No. 38 (Fall 2015). At http://www.democracyjournal.org/38/fewer-faster-smarter.php?page=all, page 41.


pages: 480 words: 123,979

Dawn of the New Everything: Encounters With Reality and Virtual Reality by Jaron Lanier

4chan, augmented reality, back-to-the-land, Buckminster Fuller, Burning Man, carbon footprint, cloud computing, collaborative editing, commoditize, cosmological constant, creative destruction, crowdsourcing, Donald Trump, Douglas Engelbart, Douglas Hofstadter, El Camino Real, Elon Musk, Firefox, game design, general-purpose programming language, gig economy, Google Glasses, Grace Hopper, Gödel, Escher, Bach, Hacker Ethic, Howard Rheingold, impulse control, information asymmetry, invisible hand, Jaron Lanier, John von Neumann, Kevin Kelly, Kickstarter, Kuiper Belt, lifelogging, mandelbrot fractal, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Minecraft, Mitch Kapor, Mother of all demos, Murray Gell-Mann, Netflix Prize, Network effects, new economy, Norbert Wiener, Oculus Rift, pattern recognition, Paul Erdős, profit motive, Ray Kurzweil, recommendation engine, Richard Feynman, Richard Stallman, Ronald Reagan, self-driving car, Silicon Valley, Silicon Valley startup, Skype, Snapchat, stem cell, Stephen Hawking, Steve Jobs, Steven Levy, Stewart Brand, technoutopianism, Ted Nelson, telemarketer, telepresence, telepresence robot, Thorstein Veblen, Turing test, Vernor Vinge, Whole Earth Catalog, Whole Earth Review, WikiLeaks, wikimedia commons

So you must trust an intelligent algorithm, sifting through an endless ocean of news sources to bring each person the very best, most relevant news. But the New Economy is in the process of gutting investigative journalism. The tech companies have won most of the cash that used to flow to newspapers for ads and subscriptions. Therefore, there are few genuine, high-integrity primary news sources, compared to antebellum days. There is almost no remaining local investigative reporting. There are occasional bloggers who accomplish real investigative work, but mostly they can only comment. Steve Bannon claimed that “if The New York Times didn’t exist, CNN and MSNBC would be a test pattern. The Huffington Post and everything else is predicated on The New York Times … That was our opening.”6 He couldn’t have said this before the rise of the New Economy. The investigative press, which is distinct from the commenting class, used to be large and diverse.

Supreme Court, at the same time that corporations have become algorithms. The algorithms running companies like Google and Facebook are among the only bits that have never been hacked, because they are the only definitive assets in the New Economy. All other bits are somebody else’s problem, but the algorithms are seriously protected. After all the talk about open source and sharing, the algorithms are the only successfully kept secrets left on the planet. Every other asset—the content, in other words—is provided by third parties so that these companies can avoid responsibilities and liabilities. So doesn’t the combination of Supreme Court rulings together with New Economy conventions mean that America has already backed into declaring algorithms to not only be people, but superhuman? Whether or not we realize we’ve done it? 15.   A related formulation is that AI is like VR, but with time and space exchanged.

n) Do worry about power dynamics and potentials for confusion or abuse. But not at the expense of daring thoughts about how the future can be better. Be tactically pessimistic and strategically optimistic. o) Don’t necessarily agree with me or anyone else. Think for yourself. * * * Forty-third VR Definition: A new art form that must escape the clutches of gaming, cinema, traditional software, New Economy power structures, and maybe even the ideas of its pioneers. * * * Flags Planted It’s often said that I coined the term “virtual reality.” It depends on how you think about the boundaries between context, languages, and history. There’s a wonderful argument that I did not. Before World War II, the radical dramatist Antonin Artaud used the French phrase réalité virtuelle in his discussions of a “theater of cruelty.”


pages: 255 words: 75,172

Sleeping Giant: How the New Working Class Will Transform America by Tamara Draut

affirmative action, Affordable Care Act / Obamacare, always be closing, American ideology, battle of ideas, big-box store, blue-collar work, collective bargaining, creative destruction, David Brooks, declining real wages, deindustrialization, desegregation, Detroit bankruptcy, Donald Trump, Edward Glaeser, ending welfare as we know it, Ferguson, Missouri, financial deregulation, full employment, immigration reform, income inequality, invisible hand, job satisfaction, knowledge economy, knowledge worker, low skilled workers, mass incarceration, minimum wage unemployment, mortgage tax deduction, new economy, obamacare, occupational segregation, payday loans, pink-collar, plutocrats, Plutocrats, Powell Memorandum, profit motive, race to the bottom, Ralph Nader, rent-seeking, rising living standards, Ronald Reagan, shared worldview, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trickle-down economics, union organizing, upwardly mobile, War on Poverty, white flight, women in the workforce, young professional

The most profound impact of globalization and technology has been the upheaval experienced by workers without college degrees. With so many factories shuttered, typical “men’s work” steadily eroded and lower-paying service jobs took its place. As the economic contribution of these former working-class heroes to our nation dwindled, millions of men became zeroes in many people’s minds. They seemed to be a dusty anachronism in a sparkling new economy. Meanwhile, the ranks of women in the workforce grew steadily during the 1980s and 1990s, and waves of immigration began to change the ethnic and racial composition of the workforce. Seeking refuge from the economic dislocation, millions of Americans earned bachelor’s and advanced degrees, a process that perversely exacerbated already hardened lines of privilege, with whites earning college degrees at a much greater rate than blacks or Latinos.

Department of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook, 2014–15, Food and Beverage Serving and Related Workers, at http://www.​bls.​gov/​ooh/​food-​preparation-​and-​serving/​food-​and-​beverage-​serving-​and-​related-​workers.​htm#tab-1. Chapter Two: The New Indignity of Work 1. Annalyn Kurtz, “Subway Leads Fast Food in Under-Paying Workers,” CNN Money, May 1, 2014, at http://money.​cnn.​com/​2014/​05/​01/​news/​economy/​subway-​labor-​violations/; http://www.​nelp.​org/​page/​-/​Justice/​2014/​Whos-​the-​Boss-​Restoring-​Accoun​tability-​Labor-​Standards-​Outsourced-​Work-​Report.​pdf​?nocdn=1. 2. Author’s analysis of Department of Labor’s “Wage and Hour Compliance Action Database,” at http://ogesdw.​dol.​gov/​views/​data_​summary.​php. 3. Hart Research Memorandum, “Key Findings for Survey of Fast Food Workers, April 1, 2014,” at http://big.​assets.​huffing​tonpost.​com/​National​Wage​The​ftPoll​Memo.​pdf; Tiffany Hsu, “Nearly 90% of Fast-Food Workers Allege Wage Theft, Survey Finds,” Los Angeles Times, April 1, 2014, at http://articles.​latimes.​com/​2014/​apr/​01/​business/​la-​fi-​mo-​wage-​theft-​survey-​fast-​food-​20140331. 4.

Hart Research Memorandum, “Key Findings for Survey of Fast Food Workers, April 1, 2014,” at http://big.​assets.​huffing​tonpost.​com/​National​Wage​The​ftPoll​Memo.​pdf; Tiffany Hsu, “Nearly 90% of Fast-Food Workers Allege Wage Theft, Survey Finds,” Los Angeles Times, April 1, 2014, at http://articles.​latimes.​com/​2014/​apr/​01/​business/​la-​fi-​mo-​wage-​theft-​survey-​fast-​food-​20140331. 4. U.S. Department of Labor, Wage and Hour Division, “Fiscal Year Statistics for WHD, FY 1997-FY2014,” at http://www.​dol.​gov/​whd/​statistics/​statstables.​htm#flsa. 5. Kurtz, “Subway Leads Fast Food Industry.” 6. Annalyn Kurtz, “10 Big Overtime Pay Violators,” CNN Money, August 5, 2014, at http://money.​cnn.​com/​gallery/​news/​economy/​2014/​03/​13/​overtime-​violations/​?iid=EL. 7. Ibid. 8. Ross Eisenbrey, “Improving the Quality of Jobs Through Better Labor Standards,” Full Employment, April 2, 2014, at http://www.​pathto​fullem​ployment.​org/​wp-​content/​uploads/​2014/​04/​eisenbrey.​pdf. 9. Brady Meixell and Ross Eisenbrey, “An Epidemic of Wage Theft Is Costing Workers Hundreds of Millions of Dollars a Year,” Economic Policy Institute, September 11, 2014, at https://docs.​google.​com/​viewer?​


pages: 270 words: 79,068

The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz

Airbnb, Ben Horowitz, business intelligence, cloud computing, financial independence, Google Glasses, hiring and firing, Isaac Newton, Jeff Bezos, Marc Andreessen, Mark Zuckerberg, move fast and break things, move fast and break things, new economy, nuclear winter, Peter Thiel, Productivity paradox, random walk, Ronald Reagan, Silicon Valley, six sigma, Steve Ballmer, Steve Jobs

More than that, the IPO was an earthquake in the business world. As my friend and investment banker Frank Quattrone said at the time, “No one wanted to tell their grandchildren that they missed out on this one.” The deal changed everything. Microsoft had been in business for more than a decade before its IPO; we’d been alive for sixteen months. Companies began to get defined as “new economy” or as “old economy.” And the new economy was winning. The New York Times called the Netscape IPO “world-shaking.” But there was a crack in our armor: Microsoft announced that it would be bundling its browser, Internet Explorer, with its upcoming breakthrough operating system release, Windows 95—for free. This posed a huge problem to Netscape, because nearly all of our revenue came from browser sales, and Microsoft controlled more than 90 percent of operating systems.

We deconstructed IIS and found that it had every feature that we had—including the security in our high-end product—and was five times faster. Uh-oh. I figured that we had about five months before Microsoft released IIS to solve the problem or else we would be toast. In the “old economy,” product cycles typically took eighteen months to complete, so this was an exceptionally short time frame even in the “new economy.” So I went to see our department head, Mike Homer. With the possible exception of Marc, Mike Homer was the most significant creative force behind Netscape. More important, the worse a situation became, the stronger Mike would get. During particularly brutal competitive attacks, most executives would run from the press. Mike, on the other hand, was always front and center. When Microsoft unveiled its famous “embrace and extend” strategy—a dramatic pivot to attack Netscape—Mike took every phone call, sometimes even talking to two reporters at once with a phone in each hand.

The NASDAQ peaked at 5,048.62 on March 10, 2000—more than double its value from the year before—and then fell by 10 percent ten days later. A Barron’s cover story titled “Burning Up” predicted what was to come. By April, after the government declared Microsoft a monopoly, the index plummeted even further. Startups lost massive value, investors lost massive wealth, and dot-coms, once heralded as the harbinger of a new economy, went out of business almost overnight and became known as dot-bombs. The NASDAQ eventually fell below 1,200, an 80 percent drop from its peak. We thought our business might have been the fastest growing of all time at that point. That was the good news. The bad news was that we needed to raise even more money in this disastrous climate; nearly all of the $66 million in equity and debt we had raised had already been deployed in our quest to build the number-one cloud service and to support our now fast-growing set of customers.


pages: 230 words: 76,655

Choose Yourself! by James Altucher

Airbnb, Albert Einstein, Bernie Madoff, bitcoin, cashless society, cognitive bias, dark matter, Elon Musk, estate planning, Mark Zuckerberg, money market fund, Network effects, new economy, PageRank, passive income, pattern recognition, payday loans, Peter Thiel, Ponzi scheme, Rodney Brooks, rolodex, Saturday Night Live, sharing economy, short selling, side project, Silicon Valley, Skype, software as a service, Steve Jobs, superconnector, Uber for X, Vanguard fund, Y2K, Zipcar

The old ladder metaphor has shifted. There’s no longer a ladder. It’s more like an amusement park. And we are all invited to play in it. There’s more opportunity for abundance than ever. This is the new paradigm of this century, a century where ideas take precedence over money in terms of creating abundance. These are the new rules. And this book will show you they work in your favor, and how you can succeed in this new economy. A person who still follows the old way will get an education through graduate school, get a great job, get the promotions—but will at some point feel stuck, lost, may even betrayed if he is fired or unhappy or if the world didn’t turn out as he had hoped it would, or if the ladder he imagined turned out to be missing a rung and he fell down, broke a leg, and had to start from scratch, slightly more broken than he was before.

And I’m on the boards of several others, including a billion-revenues company in the employment sector. Basically, people’s salaries are going down versus inflation, versus healthcare costs, versus housing costs, versus everything. A salary will not keep your family afloat. Two salaries won’t even keep your family afloat. You have to master the rules taught in this book. You have to learn how to live in the new economy. There is no single style of business that works for everyone. If it were that easy, then there would be too much competition and there will be no money left. I do know that when I began living by the idea matrix principles of abundance outlined in these pages, they worked for me and they began working for the people I described them to. Some people quit their jobs and are now making a steadily rising income doing that they love.

See books like Breakthrough Advertising, The Architecture of Persuasion, and Kevin Harrington’s (from AsSeenOnTV and Shark Tank) book Act Now, where he discusses the power of testimonials and infomercials. I had one friend a few years ago who lost his job as a TV show anchor. He was depressed and verging on broke. He moved to his hometown and went into virtual isolation. He finally wrote an article about stocks he thought would go up in the new economy. I told him, “You’re crazy. Don’t make this a free article. Sell it for two hundred dollars and call it, “One Hundred Stocks That Will Go Up 1000 percent.” He did it and sold two thousand copies and then bought a fifty-acre farm and wrote his next ten books and newsletters. I’m not insinuating that free is bad. In fact you want to write for free as much as possible and for as many sites as possible to build up your brand.


pages: 448 words: 142,946

Sacred Economics: Money, Gift, and Society in the Age of Transition by Charles Eisenstein

Albert Einstein, back-to-the-land, bank run, Bernie Madoff, big-box store, Bretton Woods, capital controls, clean water, collateralized debt obligation, commoditize, corporate raider, credit crunch, David Ricardo: comparative advantage, debt deflation, deindustrialization, delayed gratification, disintermediation, diversification, fiat currency, financial independence, financial intermediation, fixed income, floating exchange rates, Fractional reserve banking, full employment, global supply chain, God and Mammon, happiness index / gross national happiness, hydraulic fracturing, informal economy, invisible hand, Jane Jacobs, land tenure, land value tax, Lao Tzu, liquidity trap, McMansion, means of production, money: store of value / unit of account / medium of exchange, moral hazard, mortgage debt, new economy, off grid, oil shale / tar sands, Own Your Own Home, Paul Samuelson, peak oil, phenotype, Ponzi scheme, profit motive, quantitative easing, race to the bottom, Scramble for Africa, special drawing rights, spinning jenny, technoutopianism, the built environment, Thomas Malthus, too big to fail

Chapter 15: Local and Complementary Currency The Catch-22 of Local Currency Experiments in Local Money Reclaiming the Credit Commons Chapter 16: Transition to Gift Economy Chapter 17: Summary and Roadmap 1. Negative-Interest Currency 2. Elimination of Economic Rents, and Compensation for Depletion of the Commons 3. Internalization of Social and Environmental Costs 4. Economic and Monetary Localization 5. The Social Dividend 6. Economic Degrowth 7. Gift Culture and P2P Economics PART III: LIVING THE NEW ECONOMY Chapter 18: Relearning Gift Culture Chapter 19: Nonaccumulation Chapter 20: Right Livelihood and Sacred Investing The Dharma of Wealth Robbing Peter to Pay Paul Old Accumulations to New Purposes Right Livelihood Chapter 21: Working in the Gift Trusting Gratitude Business in the Gift The Sacred Professions Chapter 22: Community and the Unquantifiable Chapter 23: A New Materialism Conclusion: The More Beautiful World Our Hearts Tell Us Is Possible Appendix: Quantum Money and the Reserve Question Bibliography About the Author INTRODUCTION The purpose of this book is to make money and human economy as sacred as everything else in the universe.

Obviously, if we are to make money into something sacred, nothing less than a wholesale revolution in money will suffice, a transformation of its essential nature. It is not merely our attitudes about money that must change, as some self-help gurus would have us believe; rather, we will create new kinds of money that embody and reinforce changed attitudes. Sacred Economics describes this new money and the new economy that will coalesce around it. It also explores the metamorphosis in human identity that is both a cause and a result of the transformation of money. The changed attitudes of which I speak go all the way to the core of what it is to be human: they include our understanding of the purpose of life, humanity’s role on the planet, the relationship of the individual to the human and natural community; even what it is to be an individual, a self.

Are people happier living in prefab units or McMansions than they were in old New England stone farmhouses or wigwams? Are we happier? Has any new need been met? Even if it has not, I won’t discard the entire corpus of technology, despite all the ruin it has wrought upon nature and humanity. In fact, the achievements of science and technology do meet important needs, needs that are key drivers of sacred economics. They include the need to explore, to play, to know, and to create what we in the New Economy movement call “really cool stuff.” In a sacred economy, science, technology, and the specialization of labor that goes along with them will continue to be among the agents for the meeting of these needs. We can see this higher purpose of science and technology already, like a recessive gene that crops up irrepressibly in spite of its endless commercialization. It is in the heart of every true scientist and inventor: the spirit of wonder, excitement, and the thrill of novelty.


pages: 460 words: 131,579

Masters of Management: How the Business Gurus and Their Ideas Have Changed the World—for Better and for Worse by Adrian Wooldridge

affirmative action, barriers to entry, Black Swan, blood diamonds, borderless world, business climate, business cycle, business intelligence, business process, carbon footprint, Cass Sunstein, Clayton Christensen, cloud computing, collaborative consumption, collapse of Lehman Brothers, collateralized debt obligation, commoditize, corporate governance, corporate social responsibility, creative destruction, credit crunch, crowdsourcing, David Brooks, David Ricardo: comparative advantage, disintermediation, disruptive innovation, don't be evil, Donald Trump, Edward Glaeser, Exxon Valdez, financial deregulation, Frederick Winslow Taylor, future of work, George Gilder, global supply chain, industrial cluster, intangible asset, job satisfaction, job-hopping, joint-stock company, Joseph Schumpeter, Just-in-time delivery, Kickstarter, knowledge economy, knowledge worker, lake wobegon effect, Long Term Capital Management, low skilled workers, Mark Zuckerberg, McMansion, means of production, Menlo Park, mobile money, Naomi Klein, Netflix Prize, Network effects, new economy, Nick Leeson, Norman Macrae, patent troll, Ponzi scheme, popular capitalism, post-industrial society, profit motive, purchasing power parity, Ralph Nader, recommendation engine, Richard Florida, Richard Thaler, risk tolerance, Ronald Reagan, science of happiness, shareholder value, Silicon Valley, Silicon Valley startup, Skype, Social Responsibility of Business Is to Increase Its Profits, Steve Jobs, Steven Levy, supply-chain management, technoutopianism, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Hsieh, too big to fail, wealth creators, women in the workforce, young professional, Zipcar

YouTube, which adds twenty hours’ worth of new video every minute, throws up a few unmissable videos every day, funny, tragic, or riveting, among all the dross. “Talent is not universal,” Anderson argued, “but it’s widely spread. Give enough people the capacity to create, and inevitably gems will emerge.”10 Whatever you think of the cultural impact of the long tail, there is no doubt that it is producing a new economy, with new giants emerging to take advantage of the world of micro-markets. eBay, which was born as recently as 1996, is now worth in excess of $35 billion, with more than 200 million registered users shifting more than $40 billion of merchandise every year. The new economy is also creating new marketing opportunities (and new marketing nightmares). Top-down messaging is losing influence while bottom-up buzz is gaining power. People are less and less likely to trust traditional advertisers and more and more likely to trust people who write online reviews or generate links on social networks.

Anderson made his name with The Long Tail: How the Future of Business Lies in Selling More of Less (2006). The Long Tail is the product of a melding of the new business culture and the old one. The book started life as a blog in which Anderson conducted a sort of online seminar with his readers. It ended up as an old-fashioned business best-seller: a carefully packaged “big idea” that was supposed to reveal the secret of prospering in the new economy and that also includes a business tool that managers can apply to their businesses, the “long tail” of the title. This was Silicon Valley repackaged for the business traveler class. Anderson’s big idea was that we are moving from a world of big hits to a world of niche products. Technological innovation (particularly the Internet) is removing bottlenecks in distribution that forced companies to focus on a few products.

What does it mean to protect the “American” car industry when the components of the average car are made all around the world? In The Work of Nations (1991) he argued that a country’s competitiveness depends on its human capital—on the education and skills of its population—rather than on the profitability of the companies that happen to have their headquarters within its borders. The United States had embraced a “new economy” based on high value rather than high volume and on customization rather than standardization, he argued, in phrases that have resounded through his later work, and companies had been transformed from nation-bound pyramids into world-spanning networks. In this new world, the only “industrial policy” worth bothering with is to invest in education and training: countries with the highest-quality human capital will act as magnets to the highest-value-added jobs.


pages: 561 words: 157,589

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

4chan, Affordable Care Act / Obamacare, Airbnb, Alvin Roth, Amazon Mechanical Turk, Amazon Web Services, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, blockchain, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, corporate governance, corporate raider, creative destruction, crowdsourcing, Danny Hillis, data acquisition, deskilling, DevOps, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, Filter Bubble, Firefox, Flash crash, full employment, future of work, George Akerlof, gig economy, glass ceiling, Google Glasses, Gordon Gekko, gravity well, greed is good, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Kelly, Khan Academy, Kickstarter, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, move fast and break things, Network effects, new economy, Nicholas Carr, obamacare, Oculus Rift, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, strong AI, TaskRabbit, telepresence, the built environment, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

ie=UTF8&node=1600 8589011. 81 income and demographics: Sizing the Internet Opportunity (Sebastopol, CA: O’Reilly, 2004). 82 till the end of 1993: “Robert McCool,” Wikipedia, retrieved March 30, 2017, https://en.wikipedia.org/wiki/Robert_McCool. 82 opposed to the idea of third-party apps on the iPhone: Killian Bell, “Steve Jobs Was Originally Dead Set Against Third-Party Apps for the iPhone,” Cult of Mac, October 21, 2011, http://www.cultofmac.com/125180/steve-jobs-was-originally-dead-set-against-third-party-apps-for-the-iphone/. 81 skeptical of the peer-to-peer model: Stone, The Upstarts, 199–200. 86 “how the world *does* work”: Aaron Levie, Twitter update, August 22, 2013, https://twitter.com/levie/status/370776444013510656. CHAPTER 5: NETWORKS AND THE NATURE OF THE FIRM 90 “Apps can do now what managers used to do”: Esko Kilpi, “The Future of Firms,” Medium, February 6, 2015, https://medium.com/@EskoKilpi/movement-of-thought-that-led-to-airbnb-and-uber-9d4da5e3da3a. 90 “support megacorporations”: Hal Varian, “If There Was a New Economy, Why Wasn’t There a New Economics?,” New York Times, January 17, 2002, http://www.nytimes.com/2002/01/17/business/economic-scene-if-there-was-a-new-economy-why-wasn-t-there-a-new-economics.html. 90 largest media company in the world: “Google Strengthens Its Position as World’s Largest Media Owner,” Zenith Optimedia, retrieved March 30, 2017, https://www.zenithmedia.com/google-strengthens-position-worlds-largest-media-owner-2/. 90 surpassed those of the largest traditional media companies: Tom Dotan, “Facebook Ad Revenue (Finally) Tops Media Giants,” The Information, November 22, 2016, https://www.theinformation.com/facebook-ad-revenue-finally-tops-media-giants?

Stephens II, “I Often Can’t Afford Groceries Because of Volatile Work Schedules at Gap,” Guardian, August 17, 2015, https://www.theguardian.com/commentisfree/2015/aug/17/cant-afford-groceries-volatile-work-schedules-gap. 191 Starbucks: Jodi Cantor, “Working Anything but 9 to 5,” New York Times, August 13, 2014, https://www.nytimes.com/interactive/2014/08/13/us/star bucks-wor