NEW YORK ( TheStreet) -- "History does not repeat, but it rhymes."
Andrew Odlyzko, a math professor at the University of Minnesota, put that into one of the year's more interesting history papers, analyzing the England of 1850 and comparing it to the economy of today.
Here is how it begins:
A superpower with crippling debt, exorbitant taxes, glaring inequality, wages far exceeding those of competitors, high and persistent unemployment, lack of basic workplace skills, malnutrition, a rapidly growing rival across the ocean to the West, heated debates about the role of government in the economy, and widespread pessimism about the future.
This was England at the dawn of the "Great Victorian Boom," Odlyzko writes. If it sounds like the United States in 2013, that's the point.The seminal book on economic bubbles, called "Memoirs of Extraordinary Popular Delusions and the Madness of Crowds," had been written 10 years previously by Charles Mackay. Odlyzko notes Mackay himself had then become a cheerleader for another bubble, in railroad stocks that continued, despite falling prices, through the 1840s. (Hear that, Apple (AAPL) owners?) And this is the point. While that bubble ruined many small investors, including Charles Darwin, John Stuart Mill, and the Bronte sisters, the network it created became, in time, the heart of England's economic dominance. The equivalent technology of our time is the Internet. While America's Internet may be slower in spots than what exists in places like Korea, it's heavily used, and tied in completely with academic and investment life. When scientists use computing resources to create breakthroughs, like the lithium ion microbatteries announced last week at the University of Illinois, they can come to market extremely fast. UI engineering professor William King published his results just last week, but batteries incorporating the design could come to market within two years.
Such batteries could solve huge problems, detailed to me Thursday in a talk by Imre Gyuk, energy storage program manager for the U.S. Department of Energy. We need higher-quality power at the same time renewable energy is giving us more intermittant, low-quality power, Gyuk said. Batteries are the best way to solve the problem. Using $185 million in stimulus money, Gyuk's group has backed many possible solutions. Some of those companies, such as A123 Systems, a nanophosphate battery maker, and Beacon Power, with its flywheel system, have since gone bankrupt -- A123 is now owned by a Chinese company, Wanxiang. But Gyuk is unapologetic, and sees huge opportunities ahead.