That’s a great way of looking at it I think. One of the key issues with assigning a label to anything is it will almost certainly carry connotations that weren’t initially intended. So at some point it can start to appear or even mean something different than what was initially observed – especially when differences in understanding or the nature of language come into play.

The Connectivism course talked about how language doesn’t have a symbolic meaning – but instead can suggest different things to different people or different cultures.

But as you say, it’s human nature to assign a term to recurring situations or objects, because it makes them easier to reference.

Perhaps my dislike of the term is based too much in my economics background and I’m being too nit picky and pedantic about it. The main significance to me is that the inspiration behind the phrase “knowledge economy” doesn’t fall victim to the same shortsightedness that economics itself often does and start to overlook the qualitative elements in favour of the quantitative ones.

Labeling our collective understanding as the ‘knowledge economy’ is just our attempt to label and value a concept. In this attempt however, as in so many of our attempts we separate ourselves from the item as if it were not a part of us, or us a part of it. I think once we begin to embrace the interconnectedness of just about everything (especially knowledge) then we’ll be able to evolve collectively and the need for discussions about good or bad will for the most part become irrelevant.

On your economic points of externalities; I believe you’ll find this 20 minute doco interesting:

http://www.storyofstuff.com/