"This time it's different"

“This time it’s different” is a phrase commonly used by financial conservatives and contrarians to mock those optimists who believe that the traditional rules of financial markets no longer apply. So what if certain patterns have held for centuries; “this time it’s different” because (insert reason here). For instance, we are told that deflation is now impossible in the USA because the Federal Reserve has learned from its mistakes of the 1930s. (People who I think are more astute on this issue believe that the Fed did not make any “mistakes” in the 1930s: it just did what was expected of it, and will continue to do so. After Fed chairman Alan Greenspan was roundly criticized for daring to raise concern about “irrational exuberance” in 1996, he backed off and never uttered the phrase again.)

“This time it’s different” has a much better chance of being true when it’s said with respect to something technologically driven, because technological change is permanent, unlike changes of government, of the latest thinking in business management, etc. The Industrial Revolution led to the advent of the “permanent job”, and the Information Revolution is leading to its demise.

But that doesn’t mean that a particular technological change will necessarily cause any particular result. During the dot-com boom, in my job as a “strategist” I disagreed with the company’s Chief Strategist in that he believed in the “New Economy” while I believed only in new businesses in an existing economy. (I told you so.)

Now I’m concerned about the number of people I know who again think that the old rules don’t apply any more. I’m pretty surprised by this because it hasn’t been all that long since the dot-com bubble burst. I do think that Web 2.0 is causing quantitative changes than lead to qualitative ones, e.g. when the barriers to entry for being a columnist on a particular subject are lowered by the advent of blogging, it may no longer be possible to make a living doing it. That does not mean that we are entering a Golden Age where human potential is fulfilled because we all work together on everything; it means dislocation and the survival of the fittest. And that’s nothing “different”.