State of the New Economy

Paul Saffo

Director and Roy Amara Fellow
Institute for the Future
Menlo Park, California

As a technology forecaster, I feel like a seismologist who has the good fortune to be standing in the epicenter of the 1906 San Francisco earthquake.

What excites me most about the new economy is that we're in the middle of a fundamental change in the nature of commerce, in the nature of capitalism. Commerce isn't about buying stuff -- it's about interacting with people in different ways. And that's happening everywhere.

Digital technology has enormous potential to bring communities together in absolutely unheard-of ways. It's the solvent leaching the glue out of our economic structures. As we build new economies, we create a whole renegotiation of culture. We forge new systems, new industries, and, above all, new relationships. And that's what makes commerce so fascinating.

If there's a rule for the new economy, it's to keep your head about you, because we're in the midst of exhilarating change. And that kind of excitement inevitably leads to a sobering downside.

My fear? Overexuberance. And it has already happened. Too much excitement too early inevitably leads to an overreaction in the form of disappointment -- hence the danger. Technology may be getting more sophisticated, but humans are as crazy as ever. If you scratch the surface of every "normal" person, you'll find that everyone has some crazy passion for something irrational -- such as Beanie Babies. And the Internet allows that madness to multiply. We've seen it with urban legends. We've seen it with unrealistic pricing on eBay. We've seflationary environment where goods keep getting cheaper, the human touch is what's going to propel our "commodified" business models into the next century and beyond.

I feel terribly privileged to be alive at such a dynamic time in history. Sure, the markets will fluctuate, and technology will change. I don't know what the future holds. I'm just psyched to be along for the ride!

Jonathan Hoenig is portfolio manager at Capitalistpig Asset Management LLC, a Chicago-based hedge fund that he founded in September 1999. He is also the author of Greed Is Good: The Capitalistpig Guide to Investing (HarperBusiness, 1999).

Emily Levine

Stand-up Commentator
Los Angeles, California

The old economy-new economy dichotomy has a deeper meaning than Dow Jones versus NASDAQ. It's classical economics versus new economics. In classical economics, the economy is a rational, reductive, linear system. It's a closed system ruled by negative feedback -- a "Just Say No" economy. In new economics, the economy is an open system. It's interactive, dynamic, alive -- as well as unpredictable and turbulent.

For me, it's exciting to be on the cusp of such a big shift in thinking. It's a chance to change our "doing": How can we realize the values of diversity, cooperation, and interaction in the way that we "do" business?

The thing that disturbs me the most about the new economy is that everything I'm excited about has a downside. Take, for example, the concept of flow -- the idea that the economy is an organic, natural force. The motion of flow reminds me of the dragon that snakes its way through the streets of Chinatown on the Chinese New Year. But here's the problem: The dragon isn't real. It's animated by many hidden people. With so much of the workforce invisible -- either overseas, in prison, or below the radar of our economic indicators -- it's hard to practice what French philosopher Emmanuel Levinas said makes us human: the ability to respond in the face of another.

Emily Levine's (buttonl@aol.com) career as a stand-up comedienne and a TV-sitcom writer didn't sufficiently exploit her honors degree from Harvard. So she created "e-Levine.universe," a one-person show in which she explores the relationship between our cosmology and our ethics. Next up: a show on the "e-conomy."

Jay Walker

Founder and Vice Chairman
Priceline.com
Chairman
Walker Digital
Cofounder
Priceline Webhouse Club
Stamford, Connecticut

What charges me up about the new economy? The fact that companies, like money, have the ability to reach millions of people quickly and to scale a business with a value proposition that changes people's lives for the better. It is now possible for a business to go from a concept to a company with 5 million customers very quickly -- literally in less than a year. Never before in human history has this been possible.