Bubbles also offer a partial escape from the trap of constantly comparing oneself to others. According to René Girard’s theory of mimetic desire, recently popularized among the Silicon Valley set by Peter Thiel, our wants tend to be borrowed from other people. We want not what we desire on our own but we think other people desire. This leads to a cycle of copying and competition, which, according to Girard, results in violence. Bubbles have their own mimetic elements, but bubbles are also an escape from a broader mimetic trap: Instead of violently discharging mimetic tensions, bubbles channel the destructive mimetic dynamic into something productive and socially net positive. And since they represent the pursuit of something that has been visualized but not defined in its final form, direct mimicry is harder (except by joining the bubble).
There’s a sense in which participating in bubbles speaks to an important aspect of the human condition. People want to transcend limitations, and a world without bubbles is a world defined by preexisting limitations. In economic terms, it’s a bit like living in the ruins of a once-advanced but now departed civilization. In his book “The Decline of the West”, German historian Oswald Spengler contrasted an Apollonian culture, obsessed with the present, with a Faustian culture, which looks toward the infinite and transcendent. Bubbles are deeply Faustian. When they work, they’re a way for participants to look back and look down on the more mundane parts of the world.
A bubble also provides its participants with a vision to pursue. As Wiliam Blake writes “The road of excess leads to the palace of wisdom”. That’s true of bubbles, too. The end result of the voracious process of information creation and assimilation the bubble entails is that participants exhaust most of the initial uncertainty, leaving behind a stable finished product, and hopefully more wisdom.
In the history of technology and financial markets, bubbles have often accelerated the development, diffusion, and adoption of many transformative innovations. They can occur beyond markets in large-scale scientific or engineering projects, such as the Manhattan Project or Apollo program. But whether they occur in technology or in scientific megaprojects, the bubbles we document are driven by definite visions of and optimism about the future- building a nuclear weapon, landing a man on the Moon, developing a novel decentralized monetary architecture- that border, in almost all cases, on the delusional. Yet, like self-fulfilling prophecies, these collective delusions and wild speculations materialized into the realities they envisioned. Whether the bubbles form in hard tech or in software, the same general principle is at work in all of them: The more capital, attention, and commitment an emerging technology or project has, the more it tends to attract.
These projects have substantial impact on human progress and flourishing, acting not only as a catalyst for much-needed progress but also playing a deeper symbolic and spiritual role in our allegedly secular age.
