That old new economy: a leftist tries to make sense of the '90s boom.

• Author: Oliver, Charles
• Position: After the New Economy - Book Review

After the New Economy, by Doug Henwood, New York: The New Press, 269 pages, $24.95

IT SEEMS LIKE only yesterday. Gross domestic product was booming. Labor productivity was skyrocketing. And price inflation, at least as measured by government statistics, was almost nonexistent. The stock market was climbing. Companies like Yahoo and Amazon and eBay were trading at 90 times earnings or more. And New Economy guru George Gilder was getting respectful write-ups in The New York Times.

Oh, wait a minute. That was yesterday.

The New Economy still seems alive, if not quite as healthy as it was in the late 1990s. But we don't hear the phrase New Economy as much, and we certainly don't hear the utopian claims that once were made by its boosters and prophets. People are more circumspect about claiming that new technologies will revolutionize the world.

The bursting of the stock market bubble, the dot-com shakeout, and the brief recession have chastened even the most wild-eyed New Economy zealots. Before those events fade into history, it probably would be a good idea if someone looked back at the late '90s and tried to separate the New Economy myths that were promulgated at the time from the reality, to explain the excesses of the era, to figure out why so many people overestimated the New Economy then and whether we are underestimating the New Economy now.

Unfortunately, Doug Henwood isn't that author and After the New Economy isn't that book. Henwood, editor of the Left Business Observer, has some interesting things to say about the late-'90s hype in After the New Economy, but his critique of the actual U.S. economy focuses on a much longer period, undermining his argument. For instance, he is concerned with what he perceives as growing inequality in U.S. incomes. He tells us that from the mid-1970s to the mid-'90s real hourly pay for those in the bottom third of income distribution fell. But he also says that real wages at all levels started to rise in 1996, only to fall again as unemployment rose in 2001. It's hard to see how any of that indicts the New Economy.

Still, Henwood gets off to a promising start, summarizing concisely the most grandiose claims of the period: "Computers had unleashed a productivity miracle, recessions were a thing of the past, ideas had replaced things as the motors of economic life, the world had become unprecedentedly globalized, work had become deeply meaningful, and mutual funds had put an end to class conflict." As...