All of us are trying to survive, and compete, in the ICE economy. The extinct dinosaur and the ultimate survivor – the cockroach - are all of us, and often the same person, or institution, has elements of both. But what is ICE ? The award for the most creative acronym for the new economy - Information technology, Communications and Entertainment (electronic variety)- goes, perhaps not surprisingly, to an Indian, Gurcharan Das who coined this term sometime in November, 1999. Business-Standard, foreseeing this elegance, developed an index of all the ICE stocks in the Indian economy. But what is surprising is that this fantastically elegant term (can you imagine the permutations – melting ICE, cool ICE, burning ICE i.e. ICE for every event) has not yet been universally accepted. This turf battle reveals a lot about the transition to the new age.

In one corner is the likely champion, ICE; in another, with over-bulging old economy muscles, is the Great White Hope, Morgan Stanley (MS). These muscles allow MS to appear on all talk shows promoting its own rather weak coinage, TMT, (can you get the link with explosive TNT - hah, hah), with the M standing for media and T for technology. The forced nature of TMT is revealed by the first two letters - Technology (so builders of brick and mortar do not use technology?) and M (so an old-fashioned publishing house is part of the new economy?). Morgan Stanley representatives (often of brown color) have recently been appearing on all electronic and print media touting TMT, often with a "aren't we so cute" look about them. The term is totally uncreative, sophomoric at best. It appears as if the index market makers at MS decided that it was a shame for old economy financial masters not coining a term for the new economy they were helping usher in. Then, markets were not democratic, and clout mattered. Now, media at the speed of light allows costless worldwide distribution. But old economy wallahs like protection and want to walk with an (undemocratic) swagger. Make no mistake about it - this is a fight between the quasi-monopolistic-colonial tendencies of the old white order, and the colorless aspect of the ICE age.

But Morgan Stanley is not alone in misunderstanding the changed nature of the world. Other claimants for dodo (an extinct bird) status are those who still believe in the efficacy of policies pertaining to money supply (MS! again) growth. For the record, such species are only found in India (and perhaps that other control economy, China) since the rest of the world transited to interest rate targeting a decade earlier. It is easy to understand the appeal of crude monetarism. I know the MS growth figure, so I know about economics and the economy. It helped to have instances of hyper-inflation to prove one's superior knowledge. You think MS does not matter? Can you tell me what will happen to the economy if MS grew at 100 % ? Even a dodo can come up with this analysis. Quinine can cure malaria but can do precious little for curing all other ailments, including those which most humans, at most times, suffer from - the common flu. So something that has a logical relationship in less than 1 % of events cannot be used as an explanation for all other policies and behaviour.

There is a further problem. Assume that in an economy with reasonable openness on the capital account (excluding controlled "old economies" like India and China) the government severely accelerates MS growth. Before inflation can occur, the stock market will collapse and the exchange rate will depreciate in anticipation of inflation and create a crisis which will force the authorities to abandon their (crude) behavior. In case the Keynesianites are feeling smug the same logic applies to crude increases in the fiscal deficit i.e. the new economy financial markets will force the authorities to change their behavior before the economy is affected in real terms.

Ever since his irrational exuberance comment in late 1996 (remember then - the NASDAQ was at 1000 and the Dow at 5500 and the markets were in a bubble!) Alan Greenspan, the most powerful commentator at the most powerful institution, the Federal Reserve Board, signaled that he (along with other old economy experts at the Federal Reserve) was one of those that "just didn't get it". His misunderstanding of markets is somewhat surprising, since his claim to fame has been that he has astutely steered the financial markets, and the economy, in the last decade. Is that correct, or is that he (and Bill Clinton) were the passive lucky ones i.e. the right people at the right place at the right time? Today, Mr. Greenspan is hiking short-term interest rates in the belief that it will slow down the economy. Of the 4.5 percent GDP growth in 1999 in the US, almost half was contributed by the ICE sectors. These sectors do not operate according to the old economy rules - when was the last time you heard a venture capitalist giving an ICE firm a loan ? So what Greenspan ends up hurting is precisely the sector he should not be hurting - the old economy. But not for long, since in the ICE age, financial markets price interest rates, and policy makers like Greenspan follow.

But isn't Greenspan right about extreme irrational exuberance? Probably yes; perhaps no. But there is precious little he can or should do, besides becoming a portfolio manager and timing the market for his clients. The market is too big for all of us, especially the end-game policy wonks from the old world. Markets have a way of disciplining mistakes and exuberance in a far more efficient manner than wannabe market timers. And markets will correct that which policy makers, or market players, distort.

One such distortion is the view that the ICE economy, like the old economy, can survive without a "Non-Disclosure Agreement" (NDA). Ideas are the golden geese; it is therefore surprising that some venture capitalists, and some ICE brokers, are busy proudly denouncing NDAs on the grounds that there aren't any new ideas anyway!

A salient feature of the ICE age is the increasing irrelevance of policy makers, including erstwhile powerful ones. And the increasing relevance of ideas intermediated by financial markets. But the most admirable part of the new economy is its extremely democratic nature. Fortunately, money and inherited wealth and old economy clout does not guarantee the generation of ideas - such as ICE.