One of the few benefits of the global financial meltdown and its consequent government activism is the return of the economics of sanity. Paul Krugman's Nobel prize is excellent news. So is the rehabilitation of Keynes and the resurrection of Gordon Brown.
If Keynesian economics is back in vogue, then it's Friedrich Hayek, Milton Friedman and the laissez-faire Vienna School who are suddenly out of fashion. Yes, the free market Gods have failed. In media and technology, this irrationally exuberant supply-side thinking has its home at the libertarian Wired magazine and is exemplified by the cornucopian economics of Hayek disciple Chris Anderson, the magazine's editor-in-chief. Anderson, the author of a best-selling book called The Long Tail which predicts the death of the best-selling book, is now peddling an even quackier economic theory called "free":
FREE: Why $0.00 is the Future of Business ("enabled by the miracle of abundance, digital economics has turned traditional economics upside down").
Such sophistry might be believable when the Dow Jones Industrial Average is at 36,000. But, today, when this economics of insanity has been entirely discredited, what becomes of Anderson's utopian theory that the digital revolution has done away with scarcity?
Last week, Anderson -- who early this year announced the end of science -- asked what recession means for free. His answer was made up of pre-recessionary Silicon Valley buzz terms like "freemium", "cognitive surplus" and "real free". But, of course, we all know what a recession really means for free. It means the demise of the quack economics of digital abundance. It means the end of Chris Anderson's FREE.