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1 July 2022

The end of the Long Boom

In 1997, Wired magazine predicted 25 years of prosperity and peace driven by new technology. How have its prophesies fared?

By Will Dunn

Twenty-five years ago today, on 1 July 1997, the US technology magazine Wired announced the onset of “The Long Boom”, declaring on its cover: “We’re facing 25 years of prosperity, freedom and a better environment for the whole world”. The essay inside was written by the magazine’s features editor, Peter Leyden, and the futurist Peter Schwartz.

The central idea was a smug neoliberal fantasy: open markets, free trade and technological innovation would bring peace, affluence, equality and sustainability to billions of people. Similar arguments abounded. In a New York Times column in December 1996, the economist Thomas Friedman had put forward his “Golden Arches Theory of Conflict Prevention”: “No two countries that both have a McDonald’s have ever fought a war against each other.” Francis Fukuyama had been arguing that liberal democracy was being globalised since 1989, and long before that, Kant had believed that “commerce… is incompatible with war” (if only he could have met Dick Cheney). 

The concept of the Long Boom stands out, however, because it put its faith not just in the idea of capitalist peace, but in the notion that new technologies would deliver an age of economic, social and environmental progress. Computers, the internet, biotech and nanotech would turn all the world’s failed states into grateful liberal democracies. Green energy would spread inexorably around the world because it was more profitable. The economic vandalism of Reagan and Thatcher – “busting unions, selling off state-owned industries, and dismantling the welfare state”, as Schwartz and Leyden put it – would turn out to have been prudent management. 

Today, from the vantage of the end of the Long Boom’s projected 25-year span, its economic and political predictions seem hopelessly optimistic, but the delusion that technology will fix everything still holds. 

[See also: Utopia in the age of climate crisis]

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Some of the Long Boom’s technological prophecies were on the mark: “videophones”, it predicted, would “finally catch on” around 2005 (the first iPhone was released in 2007) and “relative newcomers like Microsoft and Disney” would take over “in a monumental struggle over digital TV” (Disney has more than 200 million streaming customers and is predicted to outgrow Netflix; it has also partnered with Microsoft on an ambitious project to digitise content production). In a few cases, the Wired essay wasn’t optimistic enough: it predicted that Intel would build “a chip with a billion transistors” around 2010 – a milestone the chip-maker actually reached in 2005. 

For some, a Long Boom did materialise. From March 2009, shares in the US and UK enjoyed a ten-year bull run, the longest period of uninterrupted rising markets in history. But this was not because technology had suddenly made everyone more productive: the UK is one of the world’s most innovative and technology-intensive economies, but its productivity growth fell over this period, while real wages remained stagnant. The new invention that sparked the financial boom was quantitative easing: to avoid catastrophe in 2008, central banks made debt cheaper than it had ever been, and created more than $10trn in new money. The biggest winner from this was the least productive part of the economy: housing, the over-valuation of which had caused the crisis in the first place.

Technology has of course transformed work, but not as the Long Boom predicted. Its big assumption was that because mechanisation had made manufacturing more productive, computers would do the same for knowledge work. There are still many people who think this; perhaps they don’t have smartphones or Zoom meetings.

Smartphones made it cheap and easy to monitor workers and pay them only for the actual service performed, which allowed platforms such as Uber and Deliveroo to flourish. Almost one in six UK workers – 4.5 million people – now works for an online platform at least once a week, while a still greater proportion of workers have their time digitally managed. But productivity growth is driven by people acquiring new skills and starting new businesses, neither of which is going on when people are spending long hours in low-paid and precarious work.

[See also: Flat wages, surging stocks: how the rich profited from a 13-year stock market boom]

The glib assumptions of the Long Boom can appear bleakly funny in light of how things turned out. It predicted that the retirement of the baby boomer generation would stimulate the economy (by creating a giant new market for biotech) rather than creating a global crisis in social care (by creating a giant new market for helping people go to the toilet). It argued that China’s growth would democratise its politics. It thought Britain would join the euro in the early noughties. According to the Long Boom vision, Russia would stop “frightening the West” and muck in with “the new work ethic”. The US would rapidly become “the closest thing the world has to a workable multicultural society”: immigrants welcomed with open arms, in an age where “diversity is truly valued”.

The bitterest laugh of all is reserved for its predictions about the environment, however. Electric cars cause the end of oil in 2008 – the year that, in reality, saw both the highest ever peak and the highest average oil price in history – and “the millennial generation has inherited a planet that’s not getting much worse”. What little damage was done to the rainforests is quickly restored, perhaps by robots.

They’re still selling this stuff, by the way. Peter Leyden’s most recent work is called The Transformation, a series of pieces published online and written from the point of view of a century-old Gen Z-er, reflecting in 2100 on how his generation fixed all the problems of the early to mid 21st century with, you guessed it, a technological and economic boom. It’s the logic of the booze-hound – perhaps the thing that caused the catastrophe can also be its solution?

There is one part of the original Long Boom essay that is spookily accurate. Towards the end, Leyden and Schwartz sketch ten scenarios that could stand in the way: a new cold war between the US and China; technology that impairs productivity; a Russian kleptocracy; the fracture of the European Union; global climate change; terrorism; soaring energy prices; “a modern-day influenza epidemic” and “social and cultural backlash”. For the next 25 years, it might be better to stick to a more pessimistic thesis, and hope to be wrong.

[See also: Will the internet’s third iteration free our virtual selves from Big Tech’s control?]

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