The tension between classic theory and the digital reality of increasing returns, network effects, and data accumulation is the core tension of the last 30 years.
I think the move from the "Post-Crash Reset" to formalizing platform economics is the most critical shift.
It makes you wonder: with AI accelerating every one of these forces to an "extreme level," what new economic framework will we need to invent in the next decade?
Reading through the eras, I couldn't help but think of the Buffett Indicator. This history feels like the perfect explanation for why that market-cap-to-GDP ratio has been so elevated for much of the last decade.
The "increasing returns" and winner-take-all dynamics you describe are the very engine that powered valuations to levels that seem disconnected from the underlying economy. A great lens for understanding the modern market.
This is a masterful breakdown...
The tension between classic theory and the digital reality of increasing returns, network effects, and data accumulation is the core tension of the last 30 years.
I think the move from the "Post-Crash Reset" to formalizing platform economics is the most critical shift.
It makes you wonder: with AI accelerating every one of these forces to an "extreme level," what new economic framework will we need to invent in the next decade?
Reading through the eras, I couldn't help but think of the Buffett Indicator. This history feels like the perfect explanation for why that market-cap-to-GDP ratio has been so elevated for much of the last decade.
The "increasing returns" and winner-take-all dynamics you describe are the very engine that powered valuations to levels that seem disconnected from the underlying economy. A great lens for understanding the modern market.
Many things changed in the last three decades, but one fundamental hasn't: monopolies still win. The AI era looks to bring more of the same.
Wow, this is so interesting and clear even to me as a non-economics, non-tech type person! Thank you