(FORTUNE Magazine) – In 1893, Henry Adams rode the train from Washington to Chicago to visit the Columbian Exposition. The historian and novelist (and grandson and great-grandson of Presidents) was no Luddite. He took the train, after all, and a couple of years earlier he had taught himself to use that most modern of the era's transportations, the bicycle. But what he saw on the shores of Lake Michigan--particularly in the exposition's cavernous electrical building, jammed with the exhibits of GE, Westinghouse, Siemens, and Western Electric--left him reeling.

"One lingered long among the dynamos, for they were new, and they gave to history a new phase," Adams wrote 14 years later in The Education of Henry Adams. Confronted with the incomprehensible new technologies on display, nonscientists (i.e., Adams) "had no choice but to sit down on the steps and brood as they had never brooded on the benches of Harvard College, either as student or professor, aghast at what they had said and done in all these years.... The historical mind can think only in historical processes, and probably this was the first time since historians existed, that any of them had sat down helpless before a mechanical sequence."

Now, near the end of another century, we are confronted with yet another "mechanical sequence"--that of computers and the machines that link them into networks, and into that biggest of networks, the Internet. Once again, history appears to be entering a new phase. This time, though, nobody's sitting on the steps and silently brooding. Instead, we are besieged with analysis, argument, and hype about the new Digital Age. Management consultants offer breathless accounts of the new rules governing the business world; economists offer somewhat less breathless tips on the workings of the information economy; journalists offer story after story about e-this and e-that. Even the historians have something to say: Since Adams' time they've built up a fat literature on technological change.

The historians' input is crucial, because despite the prophets of the Digital Age who depict it as unprecedented, it's not. Just take a quick look at business history--which really only begins about 500 years ago. That's when the Commercial Revolution began in Western Europe, replacing eons of stagnation with global trade, sophisticated financial markets, increasing specialization of labor--and economic growth. This was a true revolution, a complete and total break with the past built around one of the essential realizations of the age, as laid out by Adam Smith in his Wealth of Nations in 1776: The true wealth of a nation is measured not by how much gold it possesses, but by what it can produce.

This laid the groundwork for a series of technology-related revolutions--of which the Internet is only the most recent. The most important of these breakthroughs made workers (and capital) more productive, and brought us to the unprecedentedly wealthy, unprecedentedly crowded, unprecedentedly connected, unprecedentedly complicated state in which we find ourselves. Once you look back at the early days of the factory, the railroad, the automobile, and especially the harnessing of electricity, a lot of what seems new about the Internet starts looking familiar. Better yet, you begin to get a sense of how this particular shakeup might play out.

The chaotic, fast-paced, no-holds-barred nature of the 1990s Internet boom is often assumed to be its most defining characteristic--"Internet time," all the time. In truth, the advent of almost every major new product or technology during the past century and a half has spawned a free-for-all of entrepreneurs speeding to market with new designs. For example: There were 150 companies making automobiles in the U.S. in the decade from 1910 to 1920. The success of the mass-produced Model T, introduced in 1908, made Ford the industry's first dominant player, and by the 1920s the number of carmakers had dropped to 90. But even in that decade General Motors was able to wrest away market leadership and drive Ford to near ruin, while Chrysler rose from nowhere to become a top automaker. This pattern has been repeated in scores of industries: In the early days small, nimble firms have the upper hand, and industry leadership can change almost overnight. As the industry matures, things get duller and a few big players wage a sluggish battle. It may be that among dot-coms this process moves particularly quickly--they don't have big factories or distribution networks to build. But beyond that there's nothing new about it.

A closely related phenomenon is the wild investor enthusiasm for Net stocks. Again, this may be unique in scale--Americans have more money than ever to invest, and investing in equities has become more respectable than ever. But beyond that, nothing new. Not every technological advance has been accompanied by a stock market boom (and not every stock market boom has been linked to new technology), but in the U.S. and the U.K., investors have repeatedly gone gaga over the new new thing--from canals to railroads to electricity to radio to biotech to B2B. In 1882, for example, three years after Thomas Edison invented the incandescent lamp, electrical stocks were the hottest thing on the London exchange. During just two weeks that May, 16 new electrical companies floated shares. "However great a revolution may be in store for us," cautioned The Economist at the time, "the inevitable competition amongst real electrical systems will effectually prevent the shareholders from becoming millionaires." An astute observation, and one that seems apt for the dot-com stock boom as well. But while investors can and do get ahead of themselves, new-technology stock market darlings do sometimes survive and thrive--ever heard of AT&T? GE? IBM? Or AOL, which may well be the first Internet stock to achieve this status?

Some revolutionary and world-changing technologies never do have all that great an economic impact. Radio, for example, blurred regional differences, wiped out vaudeville, and enabled the rise of national consumer brands. But it's hard to find anyone who can point to a causal link between the arrival of radio and increased national prosperity, something one can do with electrification or even the Bessemer steelmaking process. The truly crucial technological innovations from an economic standpoint are those that make us more productive. From its early days, the true believers in the computer revolution have assumed that it would be just such an innovation. They've certainly succeeded in persuading corporate executives: Information technology accounts for more than half of capital spending by U.S. businesses. But economists, as is their wont, have remained suspicious. In the oft-quoted aphorism of MIT Nobelist Robert Solow: "We see computers everywhere but in the productivity statistics." In the past couple of years manufacturing productivity has, in fact, improved, although the increase hasn't been sustained enough to indicate a clear trend.

But a look back at the nascence of electricity gives reason for optimism. In the early decades of this century manufacturers spent millions electrifying their factories, with almost no effect on how much each worker could produce. Then, in the 1920s, productivity zoomed upward. What happened? Electricity got cheaper as regional power networks were built, so companies and towns no longer had to generate their own and manufacturers were able to move from simply applying electricity to industrial processes designed around the steam engine to building factories with electrical power in mind. That the use of computers and the Internet will follow a similar path seems a reasonable assumption: Computing power gets cheaper by the minute, and as the Internet grows in reliability and bandwidth, it is enabling companies to outsource computing tasks for even more savings. Meanwhile, the reshaping of business practices to take advantage of the networked world has only just begun. If computers and the Internet do lead to sustained productivity gains, it will be a really, really big deal--one of those great leaps into the future that have made the world a vastly more prosperous place. It just won't be unprecedented.

So what about the Digital Age really is really new? Mainly, the rise of information--easily digitized, easily copied information--as a major economic product. Markets for information don't work like markets for tangible products, something economists have known for centuries: In 1803, Jean-Baptiste Say lamented the fate of the philosopher, "who makes it his study to direct the laws of nature to the greatest possible benefit of mankind" but seldom gets rich because "he throws into circulation, in a moment, an immense stock of his product, which is one that suffers very little by wear." Since then, copyright and patent laws have evolved to where philosophers and other creators of knowledge can count on at least some recompense. But an economy in which easily copied information is the most important product is not what any of us learned about in Econ 101.

So far the biggest concern has been over computer software, an information product that has been produced at virtually no incremental cost, has been designed to be fully compatible only with other software by the same maker, and--because of those compatibility issues--has become more valuable to consumers as its market share has increased. These three traits, to which economists have given the names "increasing returns," "lock-in," and "network externalities," have helped Microsoft crush competitor after competitor--and landed it in antitrust court. It could be that the rise of the Internet, which is built on universal compatibility and common software standards, will make lock-in and network externalities less of a concern. But there will surely be enough other matters to keep lawyers and economists scratching their heads in coming years--intellectual property, for example, is the hot new field of study for law students. The information economy is different, and it's not at all clear where it will lead us. In fact, the biggest question may be this: Since Adam Smith, the test of a nation's wealth has been what it can produce. Does producing information count? Can a nation that has largely forsaken manufacturing in favor of services and information (as the U.S. and Britain have) truly prosper? The answer these days seems to be yes. But again, we don't know what comes next.

This is the kind of confusion that faced Henry Adams. After his visit to Chicago in 1893, he concluded that he had no idea what the Electrical Age held in store--and that none of his countrymen knew, either, and were instead "driving or drifting unconsciously" into the future. But Adams was too wholeheartedly dismissing the forecasting abilities of certain engineers and scientists. In books with titles like Electricity for Everybody and Electricity Up to Date for Power, Light and Traction, they painted a world in which electrical appliances would take over many household tasks, electricity would be used to power factories (at the time it was just for lighting), people would be able to "see one another's actions at great distance, just as if they were close together," and a train ride from New York to Boston would take only two hours (oops!). Clearly, these electricerati were on to something. They didn't foresee the huge role the internal combustion engine would play in the 20th century, and they didn't even try to assess the societal implications of electricity's rise. But they got many of the details right.

So don't snicker when you hear yet another prediction about how we'll soon be conducting all our business through little Finnish wireless devices, how our home thermostats and toasters and front-door locks will all be hooked up to the Net so we can control them from afar, how doctors will throw away their illegible paper files and keep all their records online. A lot of this will come true. What we don't know is how it will change the way we think and the way we live. One consequence of the ubiquity of electrical household appliances like vacuum cleaners, washing machines, and dishwashers by the 1960s was that it became a lot more feasible for women to leave home and enter the work force. So the electrification of America has given us Carly Fiorina running Hewlett-Packard--surely nobody thought of that in the 1890s. Where will the networking of the world lead us? Somewhere equally interesting, we can hope.