Wow! Or Maybe Just Sort Of.

Victoria Will, Princeton sophomore, is in her dormitory room noodling on her computer when it says "ding." Glancing at its screen, she says, matter-of-factly, "Bettina is sending me a message." Ms. Will's father, assuming Bettina is a friend e-mailing from another college, asks, "Where is Bettina?" Ms. Will points to the wall in front of her: "Next door." Why, asks her father, doesn't Bettina just walk the 10 feet to Ms. Will's room? Ms. Will's answer, a look of bemused condescension, expresses her opinion that the question betrays an antiquated person's incomprehension of the New.

How much does all this new stuff matter? Have new information and communication technologies really produced a "new economy" and "changed everything"?

Cisco, which makes communications equipment, handles 68 percent of its orders online and 70 percent of its service calls are completed online, saving $1.4 billion annually, a sum equal to 7 percent of Cisco sales. This is a nice efficiency, but hardly evidence of a fundamentally new economic order. Or even a decisive business advantage. Cisco stock is down 83 percent from its peak last March.

Some say, perhaps rightly, that the information technologies produced revolutionary advances in productivity in recent years. However, these advances may be a statistical sleight-of-hand. Most of the increase in nonfarm productivity has been in the manufacture of durables. Now, suppose much of the increase in productivity ascribed to computers has been an increase in productivity in the production of computers, and that accounting practices record a better computer at a constant price as an increase in manufacturing volume and a decline in price.

Timothy Taylor, managing editor of the Journal of Economic Perspectives, writing in The Public Interest quarterly, notes that with a "humble" 2 percent annual per capita economic-growth rate, the average standard of living doubles in 36 years, quadruples in 72 years and rises about 50-fold in two centuries. The Industrial Revolution raised the growth rate approximately 2 percentage points--from essentially zero to 2--and if the Information Revolution were to raise it an additional 2, the result would be "a phenomenal shift in the human condition"--per capita growth of 4 percent per year over two centuries would increase the standard of living 2,500-fold. If new technologies produce that result, they will have been revolutionary. Until then...

Given the magic of compounding, old-fashioned but steady can produce gaudy results. Under Warren Buffett's guidance over the past 36 years, Berkshire Hathaway's per-share book value has grown from $19 to $40,442 (23.6 percent compounded annually). In his "chairman's letter" for the company's 2000 report, Buffett includes this drollery: "We have embraced the 21st century by entering such cutting edge industries as brick, carpet, insulation and paint. Try to control your excitement." Berkshire Hathaway's cutting-edginess also includes See's Candies and Dairy Queen. It seems there is still money to be made in old things.

One hundred years ago, around 10:30 a.m. on Jan. 10, 1901, near Beaumont, Texas, on a hillock called Spindletop, the first great gusher of the East Texas oil fields roared in. Before long, the population of Beaumont was such that water was selling for $6 a barrel while oil was selling for 3 cents a barrel. That was something new, and it led to a lot of new things, including the petroleum and vulcanized rubber and internal combustion energy New Economy. Which also was a poured concrete New Economy.

Robert Shiller is the Yale economist whose book "Irrational Exuberance" was published last March, just as the stock market began to vindicate the book's warnings about a burst bubble to be followed by a freefall. (Nasdaq's apogee was on March 10, 2000--13 months and $4 trillion ago.) Shiller argues that the Interstate Highway System has been more consequential than the Internet. The interstate led to low-density suburban living, the revolution in retailing called the mall, "greenfield" office and production facilities, distribution efficiencies that make possible just-in-time manufacturing that minimizes destabilizing run-ups and run-downs of inventories. Has the "information superhighway" done as much?

The quantifications and computations required to make such judgments are, to say no more, problematic, but consider: Have the new technologies, with their admittedly spectacular reductions of "information costs," really been more revolutionary, either in reducing costs or altering lives, than Britain's early 19th-century rapid development of cheap postal services made possible by railroads and macadamized roads?

Timothy Taylor, who is 40, notes that his grandmothers, who were born around 1900 and lived into the 1990s, were born into a Midwest still largely drawn by horses and lit by kerosene. In their lifetimes they experienced the coming of electrification and plumbing, machines for washing clothes and dishes and refrigerating food, automobiles and highways, telephones, antibiotics, air travel and home entertainments, including radio and recorded music to television and movies. Taylor says that based on a comparison of the first 40 years of his grandmothers' lives and the first 40 of his life--"what they saw between 1900 and 1940 and what I have lived through since 1960"-- it is not clear that he will experience more technological, social and economic change than they did.

The new information and communication technologies have contributed much to, among other things, the repose, convenience and amusement of Bettina and many others. Including Ms. Will, who, to amaze her father, caused her computer to break into song by finding her father's requested song in someone's "file" (it was not in Ms. Will's computer's file of 900 songs) in Spokane, Wash. Impressive. But has this impressive--what?--jukebox "changed everything"? Doubtful.

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