It is ironic that perhaps the grandest bloviaters of the Internet revolution have come from the gray flannel suit crowd on Wall Street and in midtown Manhattan, the very guys whose cold and steely fixation with the bottom line is meant to prevent their being swept up in intellectual fads. These guys examined the Internet and delivered the verdict: it is the real deal, it is revolutionizing capitalism, and every business and investor must make it mission critical if they are to survive.

There are three great claims about how the Internet would revolutionize capitalism, that go far beyond the idea that every business would have a website and email for its employees. These claims have often been uttered as if they are self-evident, received truth. Even the oracle himself, Alan Greenspan, has been seen muttering them. So let's look them over and see just how revolutionary the Internet will be on the nature of capitalism.

Claim One: The Internet will lower barriers-to-entry radically, therefore making traditionally oligopolistic markets competitive. This will mean scads of new lean-and-mean firms in established markets, lower prices, better quality products and an environment where the consumer is king. Bad news for old school monopolist types like IBM, Microsoft and GE; good news for everyone else.

This claim sure seemed to make sense, and it seemed like great news that Milton Friedman and George Gilder's city on the hill would move into the mall down just off the Interstate highway. But it hasn't happened, and it is now clear that it won't happen. If anything, the Internet is enhancing concentration in markets. Consider bookselling. Because the margins are so low on line, firms need huge volume to survive. That's why Borders - Borders, mind you -- threw in the towel a few months ago and agreed to let Amazon.com become its bookseller online. If Borders, with its warehouses full of books, can't compete with Amazon, what chance has some plucky entrepreneur armed with a copy of Gilder's latest polemic?

Claim Two: The Internet is a world-historical technology that will stimulate overall economic growth in a manner similar to the railroad in the 19th century and the automobile in the 20th century. As a result, look forward to high growth rates and rapidly growing personal incomes for the coming decades. Best of all, it will not be as ecologically damaging as those earlier super-technologies.

The evidence for this is that information technology as a percentage of overall capital investment has risen from around 30 percent in 1980 to 40 percent in 1990 to 50 percent in 2000. Pretty striking numbers in any calculation.

The problem is that the evidence so far suggests that the Internet and information technology has done very little, if anything, to stimulate worker productivity over the past decade. Without that, no serious kick start to economic growth and no growth in personal incomes. One Financial Times columnist went so far as to say the massive business investment in IT "of the past few years may represent the greatest misallocation of resources since Mao Zedong mobilised millions of Chinese to force sparrows out of the trees."

Moreover, the railroad and automobile spawned massive complementary industries in steel, rubber, glass, construction, oil, and road-building, to mention but a few. The Internet has done little of that, and it seems to specialize in eliminating jobs as much as creating them.

Claim Three: The Internet has eliminated the business cycle. There will never be brutish recessions or depressions again.

The evidence for this is that we have gone a decade now without a downturn, the longest such period of growth in a very long time, if not since the dawn of capitalism. The explanation is partially the notion of high growth from Claim Two, and partially the idea that the Internet can eliminate the cause of recessions: faulty information that leads to wild bouts of overproduction that prompt sharp recessions.

Nobody is making this claim very loudly anymore, for self-evident reasons. It does not help that inventories are at record highs for many products, not the least of which are IT products. If the Internet is going to eliminate recessions, it will do so at some point far down the road.

Three claims. Three strikes. You're out. Let's cut the crap and generate an understanding of the Internet and capitalism based the actual record, for better or, in my opinion, for worse.

Robert W. McChesney is a professor at the Institute of Communications Research at the University of Illinois, Champaign-Urbana.

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