In July 1997, Wired ran a cover story heralding 25 years of vast global economic expansion that would bring increased prosperity, an improved environment, and unprecedented opportunities to achieve social justice: the Long Boom. Right from the get-go, it was attacked for being ill-founded and overly optimistic. Where, many readers wanted to know, had we gotten our VR glasses? Some argued that networked computers were not, as we suggested, increasing productivity - hence growth rates would soon decline. Others said that even if growth continued, only the rich would benefit. Still others complained that some of the technologies we anticipated - hydrogen fuel cells and nanotechnology - were fanciful. Then, when the Asian crisis hit, naysayers emailed to say the Long Boom was DOA. Yet the facts indicate otherwise.
Two years later, we all know the good news about the US economy. It has set a torrid pace, with productivity jacking up and inflation flatlining. Everyone, from Alan Greenspan on down, now recognizes that information technologies are at last increasing efficiency. It's equally obvious that ecommerce is restructuring how business is conducted in almost every sector. How long the gains can be sustained remains a reasonable question; however, when electricity transformed the economy in the 1920s, the gains went on for almost two decades.
Outside the US, fiscal crises have shaken some countries to their core, but in general, these crises reinforce the premise of the Long Boom. After all, we're talking about the transformation of the entire world economy, the move from an industrial economy driven by things to a knowledge economy driven by bits. Indeed, the Asian crisis can be seen as the result of political and financial institutions that did not keep pace with global capitalism. Consequently, capital got sucked out of Asia as soon as everyone realized how much serious work lay ahead there. This is a normal if unfortunate part of economic development.
If you take the long view, as we do, you will see these crises as temporary setbacks as the world adjusts to a new economy and society. Still, positive outcomes require that we fully engage the change taking place.
In our new book, we call for a politics of the Long Boom that will help sustain the growth and bring about a better world - one that truly shares the wealth. The Boom simply cannot be sustained unless average-income people see their prospects rising and have more to spend. That was the secret of the last great global expansion - the post-World War II boom - and it must be the open secret of ours.
There are plenty of challenges to go around, from the ethics of genomics to climate change to ending genocide, but the Long Boom scenario is even likelier today than it was two years ago. Check back in two more years - or, for that matter, in 2020. You'll see.
