The New Economy blues

The Dow dives and bobs, behaving the way stocks generally do before a major meltdown. Wholesale component exchanges in Europe and Asia have watched prices plunge, while macroeconomists are studying historical oil price shifts.

Meanwhile, industrial giants and financiers alike are asking the same question:

"Would you people just buy something?"

In essence, that's what the current state of economic turmoil is all about. Individuals just aren't buying as much electronic gadgetry as they're supposed to. The entrepreneurial juggernaut has stubbed its enormous toe on the decorative lawn gnome of customer indifference.

Upgrade your small-business infrastructure to view supplier inventory levels on a real-time basis to compete more effectively in the international market? No way, man. I'm going to buy this three-pack of boxer shorts.

Although this means that I might start collecting unemployment in a few months ("The yellow line is for visitors with scheduled appointments"), the shift is refreshing. For the past four years, the technology industry--if not middle-class America as a whole--has been drunk on the prospects for the New Economy.

Corporate hierarchies, pundits predicted, would go horizontal while governments would shrivel. Ignorance--and even poverty--would vanish, as the world's collective wisdom would be available at the touch of a button.

This shiny future, of course, was going to be catered by the free enterprise system. Develop a new product, the theory went, hook it up to the Web, and a cycle of success and wealth would follow. Best of all, it would be a self-perpetuating, "virtuous" cycle.

Unfortunately, that didn't happen. The future, it turns out, isn't being paved by business plans concocted by savvy entrepreneurs, kereitsu-connected venture capitalists or stock analysts who brag about only needing three hours of sleep a night.

Instead, it's being mapped out by some guy in Nebraska. The big question on his mind is whether to get a plain MP3 player or one with a character from the Wacky Races on it. What he buys becomes the standard--like it or not.

In retrospect, underestimating the power of dopey decisions and electronics fatigue is proving to be a flaw in many new ventures. With PCs in the home, people were supposed to become addicted to e-commerce. Some have, but others are using their home computers as a caddy for discarded fruit roll-up cellophane wrappers and coffee cups.

More often than not, the Web is used to answer questions like, "When did Mannix go off the air?" than as a tool in actual research. (Answer: 1975, and the theme song can be found on Napster).

Interestingly enough, companies like Gateway and RealNetworks that seem to go out of their way to avoid pretension seem best positioned to weather the storm.

The New Economy also miscalculated how its influence would change the fabric of society. Pundits promised a world where commercial relations would become "clean." Buyers and sellers would see eye to eye as the Internet would level the information playing field and take the mystery out of pricing.

"It is destined to connect every commercial enterprise from San Francisco to Vladivostok," Robin Bloor wrote in "The Electronic Bazzar."

Economic exchanges, however, inherently contain the seeds of fear, uncertainty and exploitation. Traders always want to get the best part of the bargain. It might not be intentional, but when one side wins, the other side often loses. Hence, when a slowdown hits, the machine shuts down.

To their credit, however, the futurists did get one thing right: Workers toiling in a grimy, confined space for 8 hours a day were to become a thing of the past.

In the New Economy, workers sit in a clean, well-lit containment pen for 12 hours at a stretch.