FORBES – December 3, 2001
Internet Mania was Just Another Chapter in America’s
Long Romance with Optimism
TODAY WE’RE SUPPOSED TO FEEL CHASTENED and contrite about the Internet euphoria, to regard it as some decadent aberration, the greed-stoked American dream going off the rails-the worst of times, an age of foolishness, an epoch of credulity. But this is phony, intellectually dishonest revisionism. The past half-decade, bracketed by the Netscape IPO and Nasdaq at 5,000, was not a kooky anomaly; it was the pursuit of happiness writ large-a blithe and reckless pursuit, as ever in America.
From the original revolutionary upheaval of 1776 to the Great Awakening, the Gold Rush, the railroad bubble, the jazz Age, the ’60s youthquake, and the digital frenzy of the late ’90s, intermittent national manias have been the rule, not the exception. This is a go-go country. Millions of Americans pursuing happiness will never, over the long run, do so smoothly and reasonably. The endeavor is inherently messy and unmanageable, and when the native enthusiasm boils over, it can even be dangerous.
Sometimes the pursuit is explicitly about the search for bliss, as with the religious revivals of the 19th century and the counterculture movement of the 1960s. More often, though, it’s about money-although seldom is it only about money. Moneygrubbing and idealism are the yin and yang of the American soul, perpetually coexisting. The sudden and unprecedented westward migration of the 1840s was inspired by a lust for gold and land, but also by more naive and ineffable notions of lighting out for the territories and improvising life-not unlike the sudden and unprecedented migration of people and capital to the Internet during the 1990s. The digital frenzy of 1995-2000 was driven by a desire to get rich, sure, but that festive greed was mixed up with more intangible and sometimes unconscious yearnings: to be part of an optimistic mob, to go off on an adventure, to get an early gander at the future and help bring it into being. Motives are always mixed, Americans’ motives profoundly so.
It seems paradoxical, but at such a moment of euphoria, individuals can be aware of the craziness and the improbabilities and yet still want to plunge in. No one understood this better than Mark Twain. He knew going west to prospect for silver in 1860 was a folly, but he did it anyway. Four years ago, before commentators had begun calling the Internet boom a bubble, I wrote an essay in the New Yorker entitled “The Digital Bubble,” about the untenable new media business models and the markets’ extraordinarily optimistic valuations of dot-com stocks. And then, 18 months later, I helped raise an extraordinarily optimistic sum of venture capital to start a new media company, Inside.com. I could see plainly that the market for technology stocks was a bubble, but I wanted to feel and smell what it was like firsthand. Maybe I’d make a lot of money. But at least as strong an attraction was the rock-and-roll expeditionary aspect, the giddy hankering to be on the frontier, close to the action.
A dozen years earlier, some friends and I had started Spy magazine-and thereby (we few, we happy few, we band of brothers) managed to have amazing fun, become profitable, make a small but indelible impact on the American mediascape, and sell the company (during the recession of 1990-91). Thus, I was familiar with the arc of my latest media enterprise: intense collegial fun, sui generis excellence, quick impact, and a sale well before the thrill was gone.
The real difference in the late 1990s was the schizophrenia of the business culture. On one hand, a decade after Reaganism’s triumph, American society-top to bottom, wall to wall-had never been more dominated by market rationalism and spreadsheet unsentimentality. Yet at the same time, the leaders of the astringent new markets-rule hegemonybankers, investors, entrepreneurs, Wall Street analysts, the business press, old economy industrial gods like Jack Welchworked themselves into a dreamy, quasi-religious rapture about the financial upside of digital technology.
The Gold Rush of 1848 and 1849 is the cliché antecedent for the Internet frenzy of the 1990s, but this recent era bears at least as much kinship to the Great Awakening that immediately preceded and accompanied gold fever. Our preening Wired and Fast Company wave of new economy utopianism was the equivalent of transcendentalism and Brook Farm communitarianism in the mid-19th century. Gatherings for the high tech industry like TED (Technology, Education, and Design), Agenda, PC Forum, and the Internet Summit were the revival camp meetings of their time and place. The pursuit of happiness in Protestant America has always comprised the pursuit of wealth as well as enlightenment-and at rare events like TED, the pursuit of both simultaneously.
Looked at from one perspective, the American pursuit of happiness derives from a kind of childlike arrogance, the naive self-confidence of the blissfully ignorant amateur. Like the tens of thousands of Americans who set off for the countryside to build communal settlements in the 1830s and ’40s, and the tens of thousands of forty-niners who abandoned their families and communities to hunt for gold in California, the vast majority of bedazzled enlistees in the digital revolution were absolute amateurs. If they knew something about bro’sers and databases, they were ignorant about managing people or selling things. And if they knew a bit about business, they knew hardly anything about technology. And lots of them knew next to nothing about either. But that didn’t matter!
In 1998 and 1999 the game lookd pretty easy to millions of believers who rushed west literally and figuratively to help start technology businesses, or stayed home and invested in them online. Amateurs ruled. Populism, America’s default ideology, is essentially amateurism with a chip on its shoulder, a collective do-it-yourself rejection of elites and certified experts. The Internet enabled and glorified a radical do-it-yourself amateurism in all realms: Anyone could publish anything instantly; everything was available online to everyone. So for one hyperbolic, madcap, ecstatic moment in the late ’90s, two antithetical and deeply American impulses-the populist democratic urge and the commercializing capitalist spirit-came together and fueled an extraordinary, large-scale pursuit of happiness.
There were elements of popular delusion and the madness of crowds, no question. But in a crucial respect this was not like the infamous episodes of speculative insanity in the late 17th and early 18th centuries: John Law’s Mississippi Scheme in France, the South Sea Bubble in England, Tulipmania in Holland. Rather, as with the consequences of discovering gold in California in 1848, digital technology constitutes a transformative new fact of life. Hundreds of scams were concocted. Suckers were bilked. Mistakes were made. But now that the hallucinatory mists have disappeared, the Internet is still there, operating and growing-among other things, allowing millions of people to dream up brilliant and ridiculous and wholly new ways to pursue happiness.©