We have moved from an Industrial Economy to a Computer Economy – without giving much thought to what we were doing.
The Industrial Economy had two main activities, two ways of making money – manufacturing and transportation. In my home town, Ft. Madison, Iowa, the West End of town was devoted to the Santa Fe railroad – and the East End was dominated by the Sheaffer Pen Company, that made fountain pens. This was a stable situation, you could make a decent living either way.
You made something people needed, and you got paid for it.
But this world did not last. Ft. Madison is now part of the American Rust Belt – full of abandoned factories and unemployed people. Anyone who wanted a future (including me) had moved away.
This was a huge change, but one Americans – who seem determined to not notice anything – have not noticed. People there are surrounded by abandoned factories – but do not realize what happened to them.
An economy had ceased to function. But they have no idea what an economy is. Or what to do about this devastating change. They are helpless pawns in a game controlled by forces not their own.
They had been told, very sternly, that the Government had no business messing with the Economy – with the Market Economy, that is – that could take care of everything. This was nonsense – the Market could do a lot, all by itself – but not everything. In fact, it could not prevent a total collapse of itself.
But it did have one idea right – to make money, you have make something. You can’t just make it out of thin air.
In the Computer Economy, which I witnessed for myself in the Eighties and Nineties in California – people thought of money as something out there – that they could steal – using a variety of deceitful means.
This resulted in startups springing up everywhere, and (sometimes) making outrageous amounts of money. Everyone wanted to get on one of these – and get rich themselves.
But this ignored something else – successful companies were being robbed so their worth could be transferred elsewhere – and used in new companies that (it was thought) would make huge amounts of money. People showed up with magic wands they could wave that would help these startups make lots of money.
People talked of the New Economy that would make everyone rich – which seemed to happen in the high-tech boom of the Nineties. Which I watched in amazement – everyone went crazy! People rushed to Silicon Valley to make their fortune – but many of them went back home, their tail between their legs – broke.
But something else also happened – new ways of making money did show up that had never been imagined before! The key technology here was the Computer Cloud – and one other thing – encryption – that made all that data in the Cloud secure.
And a new morality – open source – where new software capabilities were invented – and then given away so that anyone else could use them. Everyone benefited from these new capabilities!
For the time being, these two economies, with their two moralities – coexist.
A huge conflict that most people are unaware of.