The Flowering Economy (A Tale of two Conferences)

By Pauline van Mourik Broekman and Jamie King, 10 September 2000

Both the Tulipomania DotCom and the UK.Com conferences set out to assess the nature and state of the much talked-about ‘new economy’. Pauline van Mourik Broekman and Jamie King use four common themes to explore these two entirely different animals.



In time, the late 1990s and early 2000s will be distinguished in the economic history books as BC (Before Correction) and PC (Post Correction). This conference, occurring as it did Mid-Correction, with the dogs of economic realism baying at the door of e-commerce, found the pundits backing away from their more outlandish claims and refiguring the new economy in decidedly prosaic terms. Take, for example, Richard Barrington, Director of Industry at the UK’s Office of the E-Envoy, who ranged from the question-beggingly banal (‘different ways of working’), to the tongue-lollingly obvious (the use of ‘technology and communications’) in his attempts to tell us what characterised the new economy. His final characteristation was the strangest of all: ‘increased speed’ and ‘reduced costs’ were central to new economy business, he suggested. That they have also always been a key part of any successful business since time immemorial was certainly not lost on any of the hundred and fifty odd businesspeople and researchers who had shelled out their hard old-economy cash to hear such gems of wisdom.


Enter Richard Bolton, Worldwide Managing Partner at AA, who identified the key drivers in the new economy as ‘intangible assets’ (knowledge, relationships, personnel, brands, you). These, apparently, have outpaced companies’ balance sheet value in the last 20 years to the extent that many are now commonly worth five times their ‘book’ value. Thus (and this presumably is where Messrs. Anderson come in) managing your intangibles becomes increasingly crucial to doing good (new) business. The new economy company is smart, slick and open with its information, values and supports its staff – because it knows that it’s in a ‘war for talent’ – and looks for new ways to create that all essential factor: ‘goodwill’.


We used to hear so much about ‘disintermediation’, the phenomenon of losing the middleman, aka ‘the control revolution’. Saskia Sassen, for one, must have made a bomb trotting around the world telling the little guys that they could now make a bomb without giving any of it to the big guys. However, it now appears clear that the whole thing was actually a lot of baloney, and that although the Internet has indeed ‘cleared the playing field’, this appears to have resulted only in a new game with the odds heavily stacked in someone else’s favour. This process you may now refer to as ‘re-intermediation’, and, if you wish, proceed to make a lot of money going around the world telling everyone that you can only make money online if you first work out who the new big guys are going to be. Andrew Entwhistle of research group Analysys has already cottoned on to this idea, and had a lot to say about ‘new intermediaries’ and the destruction and rebuilding of ‘intermediary structures’. As to who these new intermediaries were, the question on everyone’s lips, he was strangely unforthcoming. But don’t worry, we can exclusively reveal their identity for you here in an easy to remember acronym: BABs. Big American Businesses. Plus ça change.


Reading between the (variously crossed) lines at the UK.COM conference, one would have to answer ‘no’. Everywhere was the feeling that given just one more Boo, one more ClickMango, one more heavyweight investor driving their nail into the e-coffin, these speakers would have been happily extolling the ‘return to bricks and mortar’, to ‘traditional business values’ and the ‘power of the bottom line’. It’s a matter of when, not if. When UK.COM was being planned by the Birkbeck convenors, it must have seemed not only credible, but also essential – a business college throwing its weight enthusiastically behind the new economy. Mid-correction, the conference was forced to assume an air of diffidence, of ‘sorting the wheat from the chaff’, attempting to extract the lessons from online business which are still, truth be told, in the process of being bitterly learned. In year 1 PC, one suspects, the idea of slating a conference with a ‘.com’ in its name will appear, in itself, ludicrous – and the new economy will be well tarnished enough to make respected business gurus like Arthur Anderson, not to mention national governments, run in terror from its name.

JJ King


It was Tulipomania DotCom’s intention to “develop an informed critique of the politics of electronic finance and internet economics”. Pragmatic skepticism being the tacit watchword, there was no chance of happening upon any Wired-flavoured eulogies (both Kelly and Negroponte were popular whipping boys). But, the speakers’ critique of the new economy’s historical novelty came in different shades. Wall Street and The New Economy? author Doug Henwood’s was emblematic: although capitalist economy is itself always new (or renewing), its current incarnation is not newly new – history has seen the construction of too many lucrative infrastructures and confident ‘bull markets’ for that to be true. Moreover, with corrections occurring and bubbles a-bursting (see, there wasn’t even a current incarnation stable enough to critique.Best, then, to look at some of the new economy’s perceived achievements, especially those revolving around wealth creation and the democratisation of markets. By using an alternative set of facts and figures (for example, in the ‘democratised’ financial markets, the top 1% own 40% of the investable wealth) and focusing on the inequities in wealth distribution, labour rights and North South differentials, Henwood bucked Tulipomania for a return to the real.KNOWLEDGE ASSETS – MANAGING YOUR INTANGIBLES

But Henwood’s quantitative counter-history of the knowledge economy’s collective spoils didn’t necessarily help in understanding its principle systems and behaviours. Thankfully, MERIT economist Robert Cowan’s qualitative analysis, a dry but meticulous breakdown of the ways in which knowledge, intellectual property law and socio-technological networks function together to achieve new and unpredictable results, did (“If we’re in a new economy, then it’s to do with threshold effects”). His explanatory tour de force on knowledge – both explicit and embedded (in toasters, cars, etc.) – returned, again and again, to two basic tenets. It is costly to produce (research and development is expensive), but cheap to reproduce (codified knowledge being infinitely replicable). He used them as a springboard for expositions on ‘winner-takes-all’ markets (flood the market and block entry to others), customisation and the influence of servicing on manufacturing (“The service sector of today is a good indicator of what’s happening to manufacturing tomorrow”).


A swamp of terms at the best of times. Geographer Andrew Leyshon was fascinating on their time-line, drawing parallels between the disintermediations of Thatcher’s 1980s and those of the new economy while also offering a rare specificity on the ways different waves of reserves (in the 1970s it was recycled debts, later it was insurance moneys) make these processes possible in the first place. But why does ‘disintermediation’ figure merely in the dictionary and ledger of the corporates? James Love, consumer rights campaigner, argued that the Internet’s TLDs (Top Level Domains) are key to upsetting this imbalance. The prescriptions of .com, .org, .net, .gov world could start being addressed by, for example, .union and .human rights. TLDs could function like multiple gateways into a name – next to


Some, like the Dutch Central Bank’s temporary autonomous gunslinger Simon Lelieveldt, claimed that the disintermediated environment is the true economy, not the new economy. With intermediaries out of the way, many to many communications systems combined with infinitesimally sensitive evaluation are concretising actually existing laws of supply and demand and, finally, capitalism can show off its great works. Central banks, those seasoned ‘practitioners of exclusion’, are ‘running scared’. Richard Barbrook would not have agreed, since ‘’The way commodities and intellectual property law currently separate digital ‘gifts’ from ‘commodities’ is on either/or basis. This is wrong: “Things are simultaneously gift and commodity.”

Pauline van Mourik Broekman

JJ King <jamie AT>Pauline van Mourik Broekman <pauline AT>

For three days’ worth of Tulipomania (with statements and transcripts of some of the many who could not be mentioned here) go to And for much more, go to