Pundits of the New Economy were unanimous: ‘Exciting, vibrant and dynamic’. It promoted the free transfer of knowledge, the breakdown of traditional information powerbases and acknowledged information as the new capital. It was sold using utopian rhetoric: a society with more wealth and more time in which to spend it. Consequently, we invested. We really invested.
The numbers of people in the Western world who owned shares rose dramatically in the New Economy. In Australia, the Federal Government made the most of the New Economy vibe and sold off half of our national telecommunications company. After an initial flurry, Telstra has rarely risen beyond its initial offered price because the New Economy was exposed. Hits on a website are not customers because they don’t pay; information is only valuable in a capitalist economy when it translates into a tangible cash transaction. The New Economy was fuelled by speculation. In many cases, well-spun company reports and creative accounting kept boards and shareholders in the dark. As Henwood suggests, when the company share price is climbing astronomically, shareholders are the last people to ask what is going wrong. In their eyes, everything is going splendidly.
Irreverent US economic journalist Doug Henwood was not impressed by the New Economy. Particularly, the fanaticism of its promoters, many that managed to profit nicely, despite its collapse. The ideas promoted by leading economists over the last decade are still around. After the New Economy is Henwood’s attempt at ‘kicking the thing while it’s down, to make sure it won’t get up again’.
Henwood traverses the novelty of a rapid expanding economy, through its absurdities and failures to regard its impacts and implications. His tongue-in-cheek style and pursuit of the hypocrisy of key players and organisations puts him in the same realm as Naomi Klein, author of No Logo. And, though economics is not quite as appealing as culture jamming to young left wing activists, many would do well to read After the New Economy with the same fervour. Henwood does not let those of us poorly versed in economics flounder in a sea of figures. He carefully explains how economists distort language and create concepts to serve their own narrow purposes. This book is as much about educating people in basic economic theory and practice, as it is denouncing the New Economy.
Though written for a United States audience, this book is relevant to all Western nations. It explores