History rebooted

There are books that appear to gauge the vitality of a certain place and time, and Boom: Bubbles and the End of Stagnation is one of them. It will mark this decade as one of the most optimistic works on the condition of the Western world. Whilst building on the insights of such thinkers as investor and technologist Peter Thiel, economists Tyler Cowen and Robert Gordon, and philosopher René Girard, Byrne Hobart and Tobias Huber go beyond mere diagnosis of decadence. They outline the mechanism that could enable the West to escape its decline.

The diagnostic part of the book provides a coherent summary of the stagnation debate that has emerged in the last decade. The West has lost its dynamism: median earnings growth has slowed, wealth is increasingly concentrated in the hands of a few, and both social and geographic mobility are declining. Immersed in virtual worlds, we scarcely recognise that we have literally slowed down: though humanity’s pace of travel accelerated from the 18th century onward, our traveling speeds have decelerated since the early 21st century (a shift marked by the phasing out of supersonic aeroplanes).

Most fail to notice the technological stagnation — the confinement of progress to the narrow cone of IT — because the growth of the Internet has created the illusion of a new world. This illusion stems from phenomena that began as early as the 1970s: a turn inward to a therapeutic culture and a great renunciation of ambitions of conquering the outside world. Immediately after the moon landing, as Thiel famously remarked, Woodstock began. Optimistic visions of the future — colonising planets, building new modes of transport, and automation — gave way to the grim tone that persists today in science fiction films filled with dystopian warnings against technology. This lack of faith in the future is paired with a sterile nostalgia for the past, a culture of repetition bent on constant recycling (consider the exhaustion of creative impulses in cinema: the majority of new films are sequels or remakes).

One cause of stagnation, which has permeated every sphere of society — from finance to culture to science — is risk aversion. Avoiding risk at all costs has become an obsession of our time, with preserving the status quo taking precedence over any ambition aimed at accelerating towards the future. This generalised low tolerance for risk has several culprits, but notably the aging of population, as it is typically the young who are most willing to take big swings in life. The gerontocratic nature of Western institutions results in a “grey ceiling,” where top positions in both the public and private sectors are monopolised by older individuals. This environment, coupled with the burgeoning debts of welfare states, suppresses appetite for risk. After all, it’s challenging to invest in bold ideas when funds are increasingly allocated to an overburdened social security system. Moreover, the youth, instead of making daring bets, prefer to keep their options open as long as possible, accumulating layers of safety nets. “Making decisions, in which a range of potentialities collapses into one actualised instance, requires risk-taking, the authors point out. In contrast, optionality … conceals a deep risk-intolerance: instead of taking bold risks, it’s safer to follow the pre-programmed career trajectory that leads from Harvard Business School to McKinsey.”

Efforts to build a future are also hindered by the tyranny of bureaucracy. Whether in business, science, or government, the trend is towards more layers of bureaucratic control. 

This malaise is evident in science, which in the past acted as the motor of progress. Older researchers avoid bold bets, reluctant to venture beyond established paradigms. However, the bureaucratisation exacerbates the problem: researchers at U.S. universities spend 40 per cent of their time writing grants, and 80 per cent would switch their research field if they could freely allocate their funding.

In the most interesting part of their book, Hobart and Huber argue that bubbles will give rise to a new boom. Their claim is that the history of the great technological breakthroughs over the last century corroborates this theory.

Hobart and Huber are putting forward an avant-garde techno-nationalism; American dynamism infused with Christian overtones

Bubbles are labeled as either “value-destroying events,” which destabilise the material conditions of society, or value-creating by the way of accelerating technological progress. The most significant distinction between the two lies in their relationship to the future. Mean-reversion, negative bubbles are financial in nature, driven by speculation that the future will merely extend current trends. Here, an abundance of capital is paired with a scarcity of vision, whilst, on the other hand, inflection bubbles are based on a concrete, definite vision of the future that radically differs from the present. They act as a coordinating mechanism: those who invest their resources — time, money, and talent — into it lower the entry barriers for others. This creates a positive FOMO: “the nagging suspicion that someone is building the future, and it could be you”.

The book discusses several transformative bubbles, including the Manhattan Project. It was driven by intense anxiety that Germany or Soviet Russia would develop nuclear weapons before the United States. It demanded an institution with a high tolerance for risk, substantial capital resources, and a vision that mobilised a broad array of talented people, whilst liberating them from bureaucratic procedures.

In the case of Apollo, the optimistic vision of achieving the unattainable exemplifies the essence of bubbles even more starkly. When JFK declared reaching the moon as America’s goal, the problems to be solved were still unimaginable, but this unattainable objective fuelled fanaticism of experimentation defying bureaucratic sclerosis.

As Hobart and Huber write, “above all, what the case of Apollo shows is that it’s never a good idea to bet against human ingenuity — to go against its inherent thymotic nature, its ‘will to power,’ as Nietzsche put it — even if this innate drive will occasionally end in failures, crashes, and catastrophes.” Boom is a more or less concealed dialogue with Fukuyama’s “The End of History”. The reign of the exhausted, risk-averse “Last Man,” convinced that there are no significant problems left to solve, represents nothing more than a brief historical intermezzo, according to the authors. They believe that a new creative minority, driven by a definite vision of the future, will soon emerge, opening up new technological and civilisational horizons.

Can this interpretation of history — as an eruption of visions around which capital and talent cluster — be applied to Europe? It is difficult to believe that the EU, a self-appointed regulatory empire, could unleash such breakthrough-generating bubbles. Can this model of technological leaps, powered by bubbles, be applied to Asia?

Another issue worth paying more attention to is the Cold War. Could this arms race FOMO be repeated during the competition with China to the benefit of all?

Hobart and Huber seem to be putting forward a type of avant-garde techno-nationalism, a philosophy of American dynamism infused with Christian overtones, which become even more distinct in their reflections on René Girard’s work. They argue that modern technology, mainly social media, intensifies mimetic mechanisms into contagious conflicts. According to Boom, inflection bubbles — these collective dreams mobilising capital and effort — offer a way to redirect this destructive mimetism toward a purpose beyond the present and immediate tensions.

Boom reminds us that The Apollo project had a pronounced Christian dimension. Buzz Aldrin took communion after landing on the Moon, and Michael Collins, who orbited it, likened the layout of the ship to a “miniature cathedral.” Many subsequent crews performed Christian rituals. This does not imply that overcoming stagnation requires a renewal of Christianity, but it stresses the importance of a deep commitment to a transcendent mission. Whether Faustian, Promethean, or Christian, sacrifice for a vision that diverges sharply from the familiar world is the key that explains past and future greatness of our civilisation.