Old v. news: II

Old v. news: II
: A few days ago, I posted excerpts from and arguments against Eli Noam’s Financial Times article arguing that we are in the midst of a market failure in the information and entertainment ecomies. The comments here had some great refutations from wiser economic minds than mine. Om Malik, Ross Mayfield, Kevin Werbach, Steve MacLaughlin, Jennifer Rice, and others joined in.

(What I like about all this is that I knew Noam’s piece was bull but I don’t have the econ-class chops sufficient to argue — but my fellow bloggers do. You make my arguments for me. You fight my fights for me.)

Now Fred Wilson, who really has the econ chops to argue — having helped build this economy — adds another citation to the argument:

I don’t know what world Eli is living in, but its not in the trenches. There is opportunity every where I look in the information economy right now. Maybe I should go up to Columbia and offer Eli a tour of it.

What is happening, as so brilliantly described by another economist, Carlota Perez, in her book “Technological Revolutions and Financial Capital” is that we are at the end of the “installation” period where building infrastructure was the recipe for making money and at the start of the “golden age of IT” where using it in innovative ways will be the key to making money.

Apple isn’t making a lot of money on iMacs anymore, but they are making a ton of money right now selling iPods and Airport Extremes. Soon, those cash cows will pave the way for new Apple businesses built around Garage Band and iTunes. As Jeff Jarvis said in his post, “There’s somebody using Apple’s Garageband in a garage right now creating a future hit that will surely be sold at Apple’s iTunes store.”

Eli should come down from his ivory tower and hit the streets and see what crafty entrepreneurs are doing with commoditized infrastructure. They are building the “golden age” of IT before our very eyes.

I like the idea of taking Noam on a tour; I’m emailing him.

: Om puts together excerpts of many of the bloggers’ comments linked above.