by Dwight R. Lee

About the author: Dwight R. Lee is a professor of economics in the Terry College of Business at the University of Georgia.

The Internet is clearly a marvelous technological advance, allowing hundreds of millions of people from all over the globe to exchange information almost instantly. But the claims that it is creating a new economy based on information and communication are pure hype. Long before the Internet we were benefiting from an amazing network of global communication and information in the old free-market economy. There is nothing new about an “information economy.”

Market economies have always been information economies. The Internet can improve the information transmitted through markets, but that information has always been the reason for the amazing success of free-market economies. Let’s...