The knowledge economy is bound to change our notion of reality. What is truly real, in the sense of the word today, need not matter so much as what is effectively real. Rather as an algebraic equation provides an abstraction of specific numbers, so the knowledge economy provides a level of separation from the world of people and things, involving instead abstract entities.

When theorising about buyers and suppliers of a product of service, one doesn't talk about specific individuals but about hypothetical ones. You don't actually deal with hypothetical consumers - you need names and addresses, faces and voices. You need real people with whom to do business, to interact and to work.

Or so it appears. However, this is not necessarily true. It is not true, for example, on the Internet. One reason that the Net's commercial benefits seem delayed is that we try to impose our ideas of reality and truth on a socio- economic structure unsuited to them. The technologies that remove geographical distance from the cyberspatial equation also disassociate from it any physical form. It is not just that you don't always know where an e-mail address is in the world; often enough, you don't know to whom, or to what, the e-mail address really belongs.

And it doesn't matter. Although this is apparently an obstacle to business, or any other form of serious interaction, in cyberspace, it may actually be an advantage. As far as business is concerned, the fact is that one does not interact with people or corporations. One interacts with producers and consumers. As long as an electronic entity reliably consumes and produces - pays its bills on time, keeps updating electronic encyclopedia - it is irrelevant what it looks like off-line. The hypothetical, generic, economic entity can be realised in cyberspace.

But even hypothetical consumers have buying patterns, and hypothetical producers have areas of activity. No problem. It is quite possible to track buying habits of on-line entities, and to follow the results of their production. Electronic beings do have unique identities, and even personalities, but they don't need to have corresponding ones outside cyberspace.

A knowledge economy deals with knowledge. As knowledge is so closely linked to the people who from whom it originates, people are certainly important. But these are people in the abstract - creators with minds, not builders with bodies - and can participate in the knowledge trade in this form. One doesn't need their photographs - and nor does one need to know that such photographs could at all exist. That is to say, an author could be one life of a schizophrenic human being, a computer, or an green- antennaed slug from Sirius - it makes not the slightest difference.

Technology makes all this possible - anonymous, untraceable material floats above the rest of the Internet today - and will probably remain ahead of the technology that aims to defeat it. Rather than get discouraged or frightened by this, it should be seen as an advantage - or at least as natural. After all, economic theories work in the abstract, and the knowledge economy is in a way an abstract economy, with its own, entirely consistent sense of reality. As long as one is trading solely in knowledge, this reality will do. Trade in more concrete goods requires reality to be similarly concrete, of course.

So much for the cold, hard business of business - but surely all this implies the end of social interaction? Not really. In an information society we may learn that a voice or a face matters less than the thoughts - or the person - behind it. Still, nothing stops us from driving across and shaking hands - but if we live in the world of ideas, we won't be forced to do so.