ESTHER DYSON WAS BORN INTO A FAMILY OF IDIOSYNCRATIC, brilliant thinkers. Her father is the physicist Freeman Dyson, her mother is mathematician Verena Huber-Dyson. Esther quickly carved out her own set of interests, entering Harvard at 16, where she studied economics. Fascinated with the burgeoning personal-computer industry, she quit her job as a Wall Street analyst after a few years to take over one of the industry's most influential newsletters. She is also host of the exclusive PC Forum, a digerati-fest held annually in Tucson, Ariz.

In an industry populated mostly by men in Dockers, the diminutive, 46-year-old Dyson is a quirky presence. Jeans are her preferred mode of dress, and her ideas, usually slightly out of step with the parade, are often intriguing. Dyson likes being a female in the high-tech industry, she says, because she isn't distracted by Bill Envy. She lives as an affluent vagrant--with health-club memberships in New York, Silicon Valley and Moscow, but no home phone or car (she doesn't drive). Also a venture capitalist, Dyson has racked up more than 6 million miles jetting from her New York base to California and Europe, where she presides over a smaller cousin to PC Forum. Part manifesto, part meditation, her new book, says Dyson, is meant to help people make sense of a wired world.

I NEVER EXPECTED TO BE A ""TECHIE.'' My parents were both scientists, so I wasn't afraid of technology. But I always assumed I'd end up being a novelist. I liked reading; I liked writing. I even founded the Dyson Gazette at the age of 8. The technology was ballpoint pen and carbon paper; the coverage was very local! I was a child of my generation, with the single exception that we didn't have television at home. Because I was raised in the academic hothouse around Princeton's Institute for Advanced Study, with Nobel laureates as dinner guests, I grew up scorning the commercial world. My first regular job wasn't commercial either; I worked as a page in the local public library. I was 14 when I discovered that most people did not get 10 weeks of vacation in the summer.

When I reached Harvard, not much closer to reality in the late '60s, I spent most of my time not in class but at the Harvard Crimson, the university's daily newspaper. I tried out for it my freshman year and wrote for it ever after for love; I also proofread for money. Much as I love the digital world, I also love the old world of movable lead type, the building that shook every night after midnight as the presses rolled, the gruff professional linotypists who scorned us elite college kids.

Like my friends on the Crimson, I was a good liberal. I thought the government was heartless because it didn't simply take care of all the poor people; wasn't that what taxes were for? But somehow, I sensed that if I wanted to change the world, my best hope was to study economics, not politics. So I majored in economics at Harvard and learned about supply and demand and market equilibrium: If you allow a free market, prices will adjust so that demand will meet supply. If that produces unfairness, then the government should step in to fix things. But none of that explained how things really worked, or how markets could produce growth and progress instead of just equilibrium. All that I learned later, first as a fact-checker and then as a reporter for Forbes.

By 1977 I got tired of watching and reporting. I went to Wall Street as a securities analyst, following high-tech stocks and trying to tell investors which companies would grow and prosper. That was where I switched from the electric typewriter I had used at Forbes to a word-processor and eventually a PC (a Tandy). I discovered that I had less interest in the stock market than in the inner workings and the products of the high-tech companies themselves--especially since their products were beginning to change how businesses operated. But my financial experience taught me a few things. Apart from high-tech, I covered one other company, Federal Express. There I met Jim Barksdale, then chief information officer of FedEx, and now CEO of Netscape. The lessons we both learned about creating a market, not just a company, have proved relevant ever since.

In 1982, I left Wall Street to get closer to the computer industry, joining venture capitalist Ben Rosen and taking over his Rosen Electronics Letter. I first met Lotus founder Mitch Kapor in Ben's office when Mitch was looking for funding for his new product, 1-2-3, a spreadsheet pitched as ""VisiCalc for the PC.'' After Ben became chairman of Compaq and a director of Lotus, I assumed his burden entirely by buying the company and the newsletter, which I renamed Release 1.0 (R E L--get it?). One of my first newsletter articles was based on a trip to Bellevue, Washington, to write about yet another start-up, Microsoft. (I wrote that it needed to ""lose some of its charm'' to succeed in the cutthroat software business.) So I came of age in the high-tech business regarding Apple, Compaq, Lotus, and Microsoft as typical start-ups--fairly high standards. Most of what happened in any of these companies had little to do with economics; it had much more to do with people, strategy, and implementation.

The personal computer industry of the 1980s flourished away from the spotlight, away from government interference, away from social responsibility. PCs were still largely novelties for hobbyists; serious mainframe computer folk considered them toys. While many people of this generation were reformed college activists settling down to reality, the PC industry remained a haven for freewheeling, free-market thinking. Personally, I was having a lot of fun covering Silicon Valley, the home of untrammeled commercialism, economic freedom, and technical innovation. I kept finding new stuff to learn as the industry kept changing. I took Release 1.0 and changed its focus from PCs to software as the PC business matured; there wasn't much new to say about PC hardware 10 years ago--just market-size forecasts and new product releases.

Last May, I visited Bill Gates's house in the company of 100 high-level CEOs whom Bill (that is, Microsoft) had invited to a ""CEO Summit.'' A subtle marketing exercise, this event exemplified the value we put on intangibles. It was a way to get attention for Microsoft by offering the invitees the personal attention of Bill Gates. At the same time, it also offered them the attention of one another. Would they have come if it had been each of them alone with Bill or with 99 less ""important'' people? Would Al Gore have come for Bill alone, or for the opportunity to get attention from these 100 important men (and about three women)? Would Steve Forbes?

There's a second part to this story. In the evening we all took a boat over to Bill's mansion. The house was magnificent, but what really caught the fancy of many of us was Dale Chihuly and his glassblowing operation. Chihuly is a celebrity glassblower. He owns a glassblowing studio in Seattle and is known worldwide for his art, most of which is now produced by a team of apprentices. He gets paid for his glass products, but he also gets paid for creating them in public--a performance.

Much as parents frequently hire a clown or a magician to entertain at a children's party, Bill had hired Chihuly to entertain at this event. Chihuly set up shop on one of Bill's balconies. He brought three furnaces, numerous tanks of propane, all kinds of tools and tubs of cooling water, and five or six apprentices. The whole scene was magnificent to watch--and to feel. The hot glass glowed and you could feel its heat from several feet away. The workers rushed about, twirling gobs of glass, poking them into the furnace, pulling them out again, slowly building a work of art before our eyes. A small crowd gathered, including Bill and Vice President Gore. Word was that the finished piece would be shipped to the vice president in the morning.

Now what's the point of this story? The point is that in many ways the experience was worth more than the physical objects being created. It certainly added value to them. How many physical goods can you amass? How many glass bowls can you use to hold all the things you don't use? Even how many commercials can you watch or how many Websites can you visit? A better way to measure wealth is how many unique experiences you have had. What captured your attention then and forevermore?

It's easy to figure out who owns a glass bowl; it's tangible, physical property. One person can give or sell it to another. If it breaks, you're out of luck. By contrast, potentially everything on the Net, captured as electronic bits, is intellectual property: e-mail conversations, banner ads, movies and video clips, legal documents, databases of consumer information, even Internet addresses themselves, to say nothing of traditional packaged content such as videos, images, and news articles. One person can give a copy to another, and retain the original. You can send content across the world in a second to thousands of people. Who owns all these things? Who controls their use? Who has the right to benefit? These are the questions bewildering everyone from teachers in grade school to executives in Hollywood, international trade lawyers, and programmers trying to make a living.

Although enforcement varies, copyright laws generally apply throughout the civilized world--or at least the parts where anyone could hope to make money selling intellectual property. Of course, there are some exceptions. Libraries are allowed to make a limited number of copies for their archives (or to duplicate a rare work in fragile condition). The biggest exception is ""fair use''--under which individuals may copy small sections of works with attribution for quotation, parody, commentary, and the like. But being nonprofit doesn't help: A teacher cannot legally copy a chapter from a textbook to distribute to students, however worthy her purpose.

Businesses that make content will have to figure out ways other than selling copies to make money, and they will. The plain economic fact is that even if you can charge for them, the price of copies will go down overall: Increasing supply of copies (which are cheaper to create and distribute) plus stable demand (measured in people's available time) equals dropping prices.

There's a funny feeling you get when you see that someone you know is finally on e-mail. They have ""come in,'' as in a spy novel. They're part of the club. Ironically, as we started using e-mail within my company and with outsiders, it didn't mean I could travel less. In fact, it meant I could travel more and still keep up with daily goings-on at the office. Sometimes when I'm in Russia--where it's still difficult to phone--I can go all week without talking to the office, but keep in close touch by e-mail. (For all the things you can do with e-mail, one of my favorites is getting the Daily Soup menu from a little soup shop around the corner from my office in New York. Because it arrives daily in my electronic mailbox, I receive it wherever I am. It's a lot of fun to sit in a snowstorm in, say, Gdansk, Poland, and know that back home the specials are Chicken Coconut--$5.95, and Crawfish Etouffee--$7.95.)

For me, the great hope of the Net is that it will lead people first to get involved on the Net and then to change their overall experience of life. I feel this intensely because it so happens that I have never voted. For many years, I just ignored the government and it ignored me. Then I started spending a lot of time in Washington because of the Electronic Frontier Foundation [a civil-liberties advocacy group] and the National Information Infrastructure Advisory Council [a group that advised the government on Internet-related issues], and my attitudes changed. With the advent of the Net, suddenly everyone is invited to contribute if he or she cares enough to go to any relevant Website or discussion group.

Although I haven't yet voted formally, I feel that I have a meaningful voice and a meaningful stake in what our government does. I'm a far more active citizen than before I raised my voice, and I care about the consequences. This doesn't mean that the folks in Washington are rushing to follow my advice. But if my ideas are valid, other people will amplify them and they will be heard. The Net will involve a growing portion of the population in this kind of governance, and their feeling of empowerment will spread to other parts of their lives. The secret is that the Internet doesn't actually do much; but it's a powerful tool, a lever for people to use to accomplish their own goals in collaboration with other people. It's more than a source of information; it's a way for people to organize themselves.

The Internet is not synonymous with multimedia: Much of what it carries is text-based. And a lot of multimedia (graphics, sound, video, all mixed together) operates off the Net. But clearly the two are merging. What impact will they have on how we think? Optimists are excited about the possibilities of the Web and its multimedia content for education, for information, for building a worldwide infrastructure of understanding. They marvel at how easy it is to find information. They also trust that children can learn by themselves, exploring the geography of Africa one day and the wonders of biochemistry the next. They can watch a video of Charles de Gaulle giving his victory speech, and then link to a page of historical context, an English translation, or a map of Europe in 1945.

Instead of dry words such as these here, the optimists continue, we will send one another images, videos, references to Websites, even real-time video of ourselves as we converse. Certainly it's more fun to watch a video, especially a well-made commercial one, on the history of France, for example. Imagine being led on a multimedia tour: the de Gaulle speech, a timeline of French history with a few dates, a snippet of the speech in English, a map of France . . . What will you have learned? The French have famous people just as we do. One of them was a great orator. Do you want an enjoyable experience that flows through your head, or something more interactive in the truest sense of the word--that is, a book or an essay that makes you think? You have to think to absorb words and transform them into ideas and arguments. You have to change the model with which you view the world, rather than just add some images to a large store of pictures, factoids, emotional resonances, and sound bites that don't support any structure. But if all you do is watch, you'll have a hard time formulating what you learned when it's over. The downside of our obsession with the miracle of multimedia is that we lose the power of mere words, which are relatively cheap to create (requiring only a single author's time) and cheap to distribute. The challenge is that they require more work and attention--from the recipient, and from the creator, too. It requires work to create a coherent argument (I know; I'm trying to do it right now), and it requires work to follow the argument. However, that work produces something of value that multimedia, for all its cost, often doesn't: knowledge and understanding.

So what are multimedia and its unnatural timescale of jump cuts and flashes doing to us? I don't want to sound like a Luddite, but I think it's bad for our minds. Images may sell, but they don't enlighten. We're in danger of getting a society where people don't bother to think or assess consequences. It is happening not only in consumer society, but in politics: People listen to sound bites instead of assessing a candidate's overall policies.

Bill Gates is treated like a head of state when he travels, and his products are used by (or should I say rule the screens of) a population equivalent to that of a medium-size country. In general, power is shifting away from nation-states to commercial entities, following a pattern reminiscent of what happened in the Middle Ages, when feudal power gave way to guilds of craftsmen, merchants and banks on the one hand, and to nation-states on the other. But this time around, power is not only shifting but also diffusing . . . to small businesses, small media, and small nongovernment organizations.

Over time, tension will grow, pitting the global world of digital commerce and online society against the more local worlds of traditional governments and of people who aren't part of the ""brave new world.'' Call it the disintermediation of government: Each field of activity attracts its own set of defined-jurisdiction ""governments.'' This is not entirely new: Think of existing organizations, some of them commercial environments, such as trading floors or markets; health care services with rules for treatment, management of personal data, and the like; or Club Med. Others are not-for-profit, such as Alcoholics Anonymous, the Boy Scouts, or a professional society. As they and similar organizations go online, they will operate in their own virtual space that extends worldwide.

While terrestrial governments are natural monopolies in their own territories, cyberspace governments compete. Terrestrial governments get overthrown when things get too bad; cyberspace governments simply lose citizens, much as a business loses customers. Former members may even go into competition with their old communities. The terrestrial government game is all-or-nothing (despite the possibility of a loyal opposition), whereas Net governments can coexist. ""Citizenship'' is voluntary. A Net-based government can operate only by consent of the governed. Any Net government must therefore provide its citizens with real benefits if it wants them to stick around. Those benefits may not be just personal goods or services, but rather the broader benefits of a regulatory regime: a clean, transparent marketplace with defined rules and consequences, or a supervised community where children can trust the people they encounter or individuals' privacy is protected.

Instead of just telling the government to keep out, we at the Electronic Frontier Foundation (EFF) are fostering initiatives that will let individuals perform some of the tasks of Net governance. [TRUSTe, for example, is an EFF-backed project for establishing privacy standards for Websites.] With efforts such as TRUSTe, we're leading the fight for freedom of speech on the Net not just by arguing against censorship, but by promoting the notion that people should be able to control the content they (and their children) receive for themselves.

Many terrestrial governments that feel strongly about--against--freedom of speech will probably try to prohibit their citizens from visiting (let alone speaking in) Net communities outside their own countries. In the long run, that makes no sense. Apart from protecting children, the best response to ""offensive'' speech, however defined, is not to bury it, but to answer it. The best response to obscenity, for instance, is to ignore it. And the best response to child pornography is to track down and prosecute the people involved.

Consumer privacy has become a big issue in the U.S. The Federal Trade Commission has held hearings on consumer privacy, and there are several bills pending in Congress, likely to change form over time: the Consumer Internet Privacy Protection Act of 1997; the Children's Privacy Protection and Parental Empowerment Act; and the Communications Privacy and Consumer Empowerment Acts. The Net makes it even easier for lots of people, not just well-capitalized mass marketers or obsessive creeps, to get at information and use it to undesirable, even dangerous ends.

Issues of privacy didn't begin with the Internet, and they can't be resolved by controlling what happens on it. The problem arises when information travels among Websites--or away from them--to places where people and companies assemble databases of information gleaned from many Websites and from non-Web mailing lists, directories, news reports, listings and other databases. A lot of this information has traditionally been available to people willing to go to a lot of trouble, visiting county document vaults, calling companies posing as a prospective employer, or spending hundreds of dollars for an investigator's license. It has also been available on a random basis to criminals in jail doing data-entry work, bored clerks at the IRS, and other untrustworthy people in trusted positions.

The growing presence of the Web increases the ease of both collecting such data and assembling it. The interconnectedness of the Net makes safeguarding privacy an increasing challenge. Often, facts are innocuous until they're combined with other facts. The user wants a seamless experience as he explores the Web, but he wants to appear as a discrete entity to each place he visits, with a legitimate identity revealed as appropriate--a credit rating, an employment record, a bank account, or a medical history. Indeed, a person's identity gets splashed all over the Net in little fragments--no problem. But then someone in particular--anyone from a benign marketer to an employer, a stalker, or a blackmailer--can start collecting those fragments.

As a society, we can't totally guarantee everyone's privacy. But we can create a situation where people can choose the level of privacy they want according to trade-offs they determine for themselves, and provide them with a means of recourse when promises are breached. When that happens, I believe, people will feel more comfortable.

Growing up in the '50s, I didn't know how to be a teenager around my parents, who had emigrated from Europe after I was born. They were reasonable and flexible, but they would have been nonplused if I had talked about dating, asked to take driving lessons, or started wearing makeup. There was just no concept of teenager in my family--only grown-ups and children. I left at the age of 15, although for the ""respectable'' reason of going to college, where I changed identity to become a teenager with a vengeance. It took about 10 years for me to feel comfortable at home again.

Had the online world existed, I might have tried out being a teenager online and had less need to leave home--or perhaps the support from outside to stay home and change. I might not even have needed to be anonymous, since my parents probably wouldn't have traveled in the same online circles. I might have written something untrue, just because I didn't want to be burdened with my real identity of a slightly dumpy 15-year-old with braces and horn-rimmed glasses. I might have wanted to pretend my parents were wicked tyrants--or I might have simply wanted to discuss them in ways I wouldn't have wanted them to see. That is one powerful reason for anonymity on the Net: You may be perfectly happy to be open in a specific community--a circle of your teenaged friends, for example--but you might not want to see your words copied out of context or even read in full by someone outside that community.

As I sit here writing on anonymity, I have just received an anonymous strange e-mail missive from a stranger. I have no idea who he (?) is, but he knows a fair amount about me. Nothing he couldn't have read somewhere; it's probably not someone I know. But it's familiar enough: He knows the shape of my family, some of my background (Russia), and he's clever enough to make some inside jokes that only I could appreciate. How much do I want to say here? If he's obsessed with me, surely he'll be reading these words, too. But he hasn't harmed me, asks nothing of me other than to read his quite clever ramblings.

What should I do? His e-mail comes from a commercial online service; I could probably track him down. But why honor him with attention? The best approach is probably simply to ignore it. Yet the invasion of privacy coupled with anonymity makes it feel creepy. All these messages are the result of a trade-off I have made. I have become well known, and now strangers can write to me anonymously and disturb me. I could have a secret e-mail account for my special friends, or filter messages out, accepting mail only from people I know, but that would be ridiculous. Still, I do have the choice. And choice is what I want to preserve.