Wealth of Ideas

The boys from "Blur" are back. Two years ago, Stan Davis and Christopher Meyer -- both of whom are thinkers, writers, and consultants affiliated with the Ernst & Young Center for Business Innovation -- collaborated on a well-conceived, well-written, and well-received book. True to its name, "Blur: The Speed of Change in the Connected Economy" (Perseus Books, 1998) offered readers a fast-paced survey of the transforming power of speed in the new economy. Little did we know, when that book came out, that it was not just a book -- it was a business model for business books. Now, in "Future Wealth," Davis and Meyer use speed and scale (how Blur-like!) to weigh in on the subject du jour with a series of short, fun, pithy offerings.

With the deadly accuracy of heat-seeking, business-commentating missiles, Davis and Meyer have homed in on today's hot topic: wealth -- what it is, how to think about it, and, presumably, how to acquire it. One visit to the neighborhood magazine rack is enough to convince even the least acquisitive among us that wealth -- big bucks! -- is the birthright of every true player in the new economy.

The good news is that our two keen-eyed observers have pegged the next big thing. The bad news is that, like most sequels, the insights offered in "Future Wealth" feel a little less urgent -- a little less, shall we say, focused -- than those offered in "Blur." It may be that there's simply not a lot to say about wealth. Or that talking about financial issues assumes special knowledge on the reader's part. Or that the guru-esque tricks of the trade that worked so well in "Blur" (the clever turn of phrase that marks a Davis-and-Meyer construct, the flaglike factoid that represents a bump-and-run example) come across as a bit shopworn in take two. Whatever the explanation, "Future Wealth" is a useful and quick read, a once-over-lightly introduction to New Economics 101 -- but hardly the kind of book that is likely to reconstruct our understanding of all things financial.

The authors start the book off with a primerlike reminder of what wealth is -- "the means by which we fulfill our desires." They then go on to identify the three forces that they say are transforming wealth and the process of wealth creation: the growing efficiency of financial and real markets, the primacy of human capital, and the need for new forms of social capital. And, according to Davis and Meyer, each of those forces yields a critical insight.

First, information has become so pervasive and cheap that the market for risk has flipped. Second, as the mainstay of wealth creation, physical assets have given way to human talent and intellectual capital. And third, social capital -- how we deal with the impact of wealth and its distribution across society -- needs to be reinvented to keep pace with the demands and opportunities of work in the new economy.

Each of these forces then gets its own Davis-and-Meyer treatment: a section on what is changing and why; a section on some of the gee-whiz, really cool kinds of things that are happening today; a section on the implications of those changes; and a section on what might be done to expedite those changes, to benefit from them, or to guide them in a socially useful direction.

A few examples serve to illustrate the overall flavor of the book. In an economy that treats information as a new source of wealth, markets are becoming "hellishly efficient," Davis and Meyer write. And efficiency, they contend, has some specific characteristics: "Markets must be transparent, liquid, adjust continually, and offer open access." One result of efficient markets is that risk becomes opportunity. New-economy players are more willing than ever to bid in all kinds of auctions, to go long or short on the stock market -- even to use information about the weather to take positions on farm commodities.

On the subject of human capital, the authors imply that people are both the greatest source of wealth and the scarcest resource in the world. The combination of efficient markets and human capital produces -- voila! -- eBay auctions in which people offer their services to the highest bidder. For individuals, the bottom line is clear: It's up to you to determine your individual self-worth (we're talking literal self-worth here) and to use financial freedom and efficient markets to create wealth. "To exercise this degree of freedom will mean a long workout on the big psychological StairMaster for most of us," advise Davis and Meyer.

From there, it's a short jump to such examples as "Bowie Bonds" -- a several-year-old factoid about the rock star who decided to "securitize" his future earnings. And it's another short jump to the prediction that, in the not-too-distant future, we'll all be issuing securities against our human capital and using markets to trade them. These are the kinds of observations, extrapolations, and connect-the-new-economy-dots games that Davis and Meyer excel at making.

Davis and Meyer are both first-class new-economy observers and thinkers. And when they push themselves to offer smart, well-researched global examples -- and take the time to explain those examples in depth -- they are among the best in the business. But the "Future Wealth" business model doesn't give them much room for that kind of work. As a result, readers should tackle the book with a yellow marking pen and a watchful eye. The game is simple but entertaining: See how many factoids and slogans you can bag. Come on, everybody! Grab your pen, and see how many you can collect! Hey, collect them all! You'll be glad you did.