Updated: Mar 2
Bizarre associations sprang into his mind like enchanted crickets.
– Novelist Vereen Bell on American poet Robert Lowell
I’m calling it The Lowell Loop.
At the end of 2021, I wrote about how everything feels like it’s going too fast during our Exponential Age. Aspects of our economy are being reorganized in dizzying ways. From crypto to instant delivery, the pace feels almost manic. Rapid technological change and networked globalization are sparking a bounty of ideas and possibilities, a shock of dislocation, and a sense of instability all at once. Pandemic fed tech has been on a wild ride, and with Russia’s invasion of Ukraine, expect global markets to get wilder.
Our times have gotten so weird that it made me think more deeply about the relationship between mania and creativity, which in turn reminded me of a brilliant book about the greatest of twentieth century American poets, Robert Lowell.
In effect, I’d propose that American tech has reached a point where it’s functioning in a “flight of ideas” manner not unlike that which happens in the excited, electric mind of a manic poet.
An Almost Pathological Enthusiasm for Ideas…
Silicon Valley anticipated opportunities to alter the way we live long before the pandemic hit, whether bringing us together on Microsoft Teams or offering us endless streaming on Netflix. But by 2020, business models were pressed into service on a scale that not long ago would’ve seemed outlandish, from DoorDash to Zoom. With the onset of Covid, the land grab to serve customers in every aspect of their lives was on, from instant delivery to the buy-now pay-later (BNPL) industry. Tech was on a pandemic-fueled race to change the world. And the ideas just kept coming.
Indeed, ideas that might have once looked far-fetched seemed to manifest almost overnight. The belief in a Brave New World reached fever pitch. By this January, The New York Times wrote about the stock market’s froth. The piece pointed out that more than 900 tech startups were each worth more than $1 billion, an astonishing fact:
The activity has crossed into even frothier territory in recent months, as tech start-ups offering food delivery, remote-work software and telehealth services realized that they not only would survive the pandemic but were in higher demand than ever. The money hit a fever pitch in the final months of 2021 as investors chased a limited pool of start-ups and as tech stocks like Apple, which topped a valuation of $3 trillion, reached new heights.
Peter Diamandis, chairman of the X Prize Foundation, adds that, “In 2021, U.S. venture capital firms invested an all-time high $330 billion in startups, equivalent to over $900 million every day of the year. This record sum is double the $166.6 billion invested in 2020. Any way you slice it, this era of unprecedented capital abundance is massively accelerating innovation and funding crazy ideas and Moonshots.”
In that spirit, Cathie Wood’s ARK Investment Management has been a notable champion for a suite of disruptive innovation funds comprised of what she considers to be game-changing technologies, including artificial intelligence (AI), digital payments, videogaming, and electric vehicles. Her funds saw parabolic run-ups at the peak of the pandemic in 2020.
A few particular concepts might help explain some of the dynamics behind Wood's optimism….
Perhaps crypto is the most obvious example of burning enthusiasm for emerging tech. At the end of December, 2021, I wrote about the continuing rush of talent into that space and that the value of all outstanding cryptocurrency now exceeds $2 trillion.
Meanwhile, there’s this next-generation computing platform called the metaverse, and the ideas around that concept are starting to accelerate. Meta Platforms just offered a first glimpse into “Builder Bot,” an in-development AI tool. “In essence,” says Matthew Olson of The Information’s “Reality Check” feature, “Builder Bot works like a voice assistant for quickly sketching out virtual worlds. The company hopes such assistants will help spur creativity –and, by extension, economic activity – in the metaverse. It’s a compelling idea, and one that could go a long way toward making Meta’s virtual worlds popular in the long run if the company can pull it off.”
Speaking of Meta, what about its AI Research SuperCluster (RSC), which the company claims will be the fastest AI supercomputer in the world when it’s completed in 2022? “Our researchers,” Meta claims, “will be able to train the largest models needed to develop advanced AI for computer vision, NLP, speech recognition, and more. We hope RSC will help us build entirely new AI systems that can, for example, power real-time voice translations to large groups of people, each speaking a different language, so they can seamlessly collaborate on a research project or play an AR game together.”
And when it comes to computing, what too about this thing called quantum computing? Although it isn’t gathering quite the same headlines as crypto or the metaverse, it could be one of the most game-changing technologies of them all. Ever since December 2018, when the United States passed a “National Quantum Initiative,” fevered funding has flowed into the space from both public and private sources.
Specifically, IBM and Google are drawing on years of developments in the semiconductor industry to manipulate superconducting “qubits,” using superconductors like aluminum and titanium in ultracold settings. As The Information notes, “IBM has promised to build a 1,000-qubit quantum computer by the end of next year and a million-qubit system within the next decade, and late last year it announced a 127-qubit quantum processor. For the type of quantum computer IBM wants to build, more qubits means more computing power and progress toward larger-scale real-world applications.” For its part, Microsoft is taking a more theoretical approach that involves making things called “topological qubits.”
But the rush into quantum computing and its many applications doesn’t end there. Private investors are pumping record amounts of cash into ambitious computing startups like IonQ and Rigetti Computing, upstarts that aim to race past the tech giants in the race for quantum computing glory.
The road to madness frequently starts with a kind of overweening ambition. And Scott Aaronson, a professor and theoretical computer science researcher at the University of Texas at Austin looks at the amounts of money pouring into quantum computing development and insists that, “We are in an insane period right now.”
This sense of overweening ambition sounds somewhat familiar. In fact, if Silicon Valley were an ambitious seeker, it might look a lot like Robert Lowell. According to Kay Redfield Jamison’s aforementioned book on Lowell, “He wanted to be the American Milton.” Lowell himself referred to his almost “pathological enthusiasm.”
Back in 1954, Lowell’s friend Blair Clark recognized the signs of incipient mania straightaway during a dinner in Paris: “He was in the early stages,” observed Clark. “I knew the symptoms by that time – he couldn’t sleep, sat up all night talking and drinking and so on. Everything was racing.”
When it came to his writing, Lowell harnessed his euphoria to obsess over new perspectives: “Lowell’s pattern of work – a driven, high enthusiasm state, characterized by a rush of ideas and a mass of fragmentary writing that led, on occasion, to a shift in poetic form, followed by exhaustive revision – was to be a thread throughout his life.”
The English poet and novelist Alan Brownjohn pointed out that there was nothing simple about Robert Lowell’s mind, from which ideas flew with an almost crazed energy. “It was partly the man’s knowledge, which was encyclopedic,” observed Brownjohn, “partly the sort of darting perceptions and intuitions on behalf of you for what you were going to say next. He made links and connections for you in this slightly manic – and paranoid – way.”
Poet W.D. Snodgrass added that being a student in one of Lowell’s classes was an unforgettable experience. “Week after week, we came away staggered under a bombardment of ideas, ideas, ideas. None of these works would ever look the same again.” Snodgrass said Lowell hauled his students with him, “through uncharted galaxies of idea and association. Who could feel less than grateful for a mind so unpredictable, so massive, so concerned?”
Elizabeth Hardwick noted the “incredible flow of energy, the stream of incredible madness.”
Accelerating into Madness…
It's worth returning to the subject of cryptocurrencies to dig deeper into tech’s almost crazed enthusiasm. In a new piece in The Wall Street Journal on crypto, Christopher Mims casts a wary eye on all the “Web3”-related ideas suddenly springing forth:
In what might be called ‘first generation’ blockchain-based technologies, like bitcoin, there are only so many ‘coins,’ and creating the ones that do exist is difficult and expensive. But second-generation technologies are rapidly diversifying into a dizzying array of potential applications, from ‘smart contracts’ that trace the provenance of luxury goods to new competitors for Facebook. And to do all this, these technologies are predicated on the idea that the only limit to what can be done with them is the human imagination.
Mims goes on: “The ease of creating new crypto-whatsits is one reason so many new NFTs, tokens, and businesses claiming to be based on crypto, or the blockchain, or some word salad of related terms, are born daily…. But this mania for being early to business models that by their nature reward those who are first, also contributes to their high rate of failure.”
That sounds a bit like the tech start-up world in general. And The New Times seems to think that by the end of 2021, things in Start-up Land have indeed gone a bit nuts:
Astonishing data for 2021 tell the story. U.S. start-ups raised $330 billion, nearly double 2020’s record haul of $167 billion, according to Pitchbook, which tracks private financing. More tech start-ups crossed the $1 billion valuation threshold than in the previous five years combined. The median amount of money raised for very young start-ups taking on their first major round of funding grew 30 percent, according to Crunchbase. And the value of start-up exits – a sale or public offering – spiked to $774 billion, nearly tripling the prior year’s returns, according to PitchBook.
Outsized optimism has been everywhere, according to The Times: “Investors and founders have adopted a seize-the-day mentality, believing the pandemic created a once-in-a-lifetime opportunity to shake things up. Phil Libin, an entrepreneur and investor, said the pandemic had changed every aspect of society so much that start-ups were accomplishing five years of progress in one year.”
Some might start wondering how much of this is verging on the delusional: “’The basic fabric of the world is up for grabs,’ he (Libin) said, calling this time ‘the changiest the world has ever been.’ In mid-2020, he started Mmhmm, a video communication provider for remote workers, and has landed $136 million in funding. Mr. Libin said he heard from interested investors a few times a week.”
Once again, it all sounds oddly familiar.
In April, 1949, Robert Lowell was hospitalized for the first time, admitted to Baldpate Hospital, in the woods of Massachusetts: “When he arrived he was euphoric, overexcited, overactive, exalted, and talked ‘without cease.’ He told his doctors that he was ‘indestructible,’ a messenger from heaven. He had been Christ not long before, he said, he had walked upon the waters. He was in regular communication with God and had defeated the massing forces of evil. He was the reincarnation of the Holy Ghost.”
Lowell spent his initial days there writing ebullient letters to friends. He wrote poet George Santayana, claiming that, “The world is full of wonders. I’ve been having rather tremendous experiences.”
It was the beginning of a pattern. In the summer of 1952, Lowell was presenting at a conference in Salzburg, Austria. His second wife watched with concern. “He got very wound up,” she wrote. She described him as “euphoric, voluble, goading, impulsive. He fell in love with an Italian music student. He disappeared from the castle where the conference was being held and had to be tracked down to the German border, where he had wandered off alone. He talked excitedly and ceaselessly from evening into the early morning hours. He wore out those whose company he kept.” Soon he would be taken, “talking fast, furious, incessantly, incoherently, to the American Army Hospital in Salzburg.”
In 1954, Lowell showed up to a dinner in Cincinnati, “in an alarmingly manic state, talking like a machine gun with blazing eyes and even more tense than ever,” noted a witness. “One evening Lowell talked brilliantly and without stop about the Roman poets through drinks, through dinner, and then long after dinner. ‘It was dazzling, but also alarming. One felt he might be on the edge of a breakdown.’”
By early December, 1965, “Lowell was admitted to McLean Hospital outside Boston for the third time… by the end of 1966, he was manic again. He purchased an expensive bust of Tecumseh, the leader of the Shawnees; became romantically obsessed with his friend Jacqueline Kennedy; believed himself to be King James IV, Napoleon, and Hitler. He stood up at the Metropolitan Opera and tried to conduct the orchestra.”
At some point, manias always hit a wall.
When the Dow plummeted in early trading in late January, only to surge back, then do it again the next day, the weird market swings seemed like shocks to the system, seemed to suggest a new phase in a rather strange condition for America’s obsession with all things tech.
As talk of interest rate increases and inflation spooked the markets in early 2022, certain crypto tokens and stocks started diving. The week of January 24, the price of cryptocurrencies plummeted, with the market losing a trillion dollars from the point of Bitcoin’s all-time high in November. Some prominent tech public offerings such as Coinbase, DoorDash, and Robinhood have slid as much as 65% since going public. Suddenly too, the ARK Innovation ETF was down 24% this year, matching its decline in 2021.
Take installment lending as just one example of fintech pandemic heroes reversing course: “Publicly traded buy now, pay later stocks enjoyed a runup as Covid lockdowns prompted an ecommerce boom, but have dropped in recent months. Shares in Affirm are down more than 70% since early November; Sezzle shares are down 80% from a July 2021 peak.” Both the U.K.’s Financial Conduct Authority and the U.S.’s Consumer Financial Protection Bureau are looking into lending practices around BNPL.
Nor has Big Tech been immune from the pain. By February 23, 2022, Facebook (now Meta Platforms) was down 48% since September, 2021. In less than six months, $540 billion in market cap has been incinerated.
That sell-off in public tech stocks is impacting the startup world as well. Suddenly, funders of private tech startups are cutting their offers for shares.
By age 42, Robert Lowell had experienced five manic depressive breakdowns.
During his stay at Baldpate in 1949, Lowell received electroconvulsive therapy (ECT), also known as electroshock therapy: “His delusions and manic behavior stopped almost immediately…. Within a week of his final ECT treatment, however, Lowell plummeted into a deep depression. He was unable to concentrate or write and he talked about killing himself. He told his doctors he felt hopeless and wished to die. His speech was slow, his energy nonexistent, and he avoided being with other people.”
By the fall of 1949, Lowell was admitted to the Payne Whitney Psychiatric Clinic of New York Hospital. The psychiatrist, “concluded that Lowell had experienced several periods of intense elation as an adult, times during which he had been ‘overactive, overconfident, over talkative, occasionally rude and domineering.’ These elated periods had lasted approximately eight months and ‘their onset had usually coincided with [the] patient’s beginning some new [literary] project.”
In 1957, Lowell had one of the more severe episodes of his life. Kay Redfield Jamison offers us a vivid picture:
Lowell’s behavior at the time he was committed to the Massachusetts Mental Health Center in 1957 provides an example of the open boundaries between poetic ambition, obsession, and clinical grandiosity. Two facts were clear at the time of his admission to the hospital. First, Lowell was indisputably psychotic. Second, he had just written many of the poems that would make up ‘Life Studies,’ one of the most influential books of poetry of the twentieth century.
Where Will it All End Up…
Is American tech behaving like the electric mind of a manic poet?
Charlie Munger might think so. While he didn’t quote Robert Lowell during a recent Q&A session, he did reference another famous poet named Rudyard Kipling: “As Kipling said, treat those two imposters just the same,” Munger said. “You have to deal with daylight and night. Does that bother you very much? No. Sometimes it’s night and sometimes it’s daylight. Sometimes it’s a boom. Sometimes it’s a bust. I believe in doing as well as you can and keep going as long as they let you.”
A letter Lowell wrote way back in 1959 seems like the perfect retort to Munger’s presumption: “During this time I have had five manic depressive breakdowns: short weeks of Messianic rather bestial glow, when I have to be in a hospital, then dark months of indecision, emptiness, etc. So the dark and light are not mere decoration and poetic imagery, but something altogether lived, inescapable. Even survival has had to be fought and fought for.”
Munger might simply shrug and say what of it? And then repeat his conviction that Bitcoin is “rat poison.”
But what about, for instance, the possibilities for blockchain technology eventually becoming a disruptive change agent? And what about the metaverse?
“I think history tells us,” Cathie Woods chimes in, “not to bet against innovation.” She harkens back to the early 2000s, when amidst the madness of the times it would’ve made sense to buy Amazon. “You would’ve bought that stock all day long as a value investor,” Wood says. “And of course the returns would’ve been phenomenal. We are in that same place with truly emerging growth right now,” Wood insists.
For tech believers, it seems manias such as the dotcom boom are often the necessary precondition to surface eventual gems like Amazon. As of February, 2022, ARK continues to double down by snapping up shares of largely unprofitable companies. In the past few weeks, Wood’s flagship ARK Innovation Fund has gobbled up $400 million worth of high-growth stocks. ARK continues to bet on agents of disruption, with Tesla, Roku, and Teladoc Health being the innovation fund’s top three holdings.
Recently, ARK Invest claimed the price of a Bitcoin could reach $1 million by 2030.
Sound outrageous? Ben Carlson of “A Wealth of Commonsense” points out that, “Amazon crashed more than 90%, broke even seven years later for the blink of an eye just in time for the peak of the market in the fall of 2007 before the onset of the Great Financial Crisis…. But tech stocks are prone to these boom-bust cycles because innovation always causes bubbles. We simply can’t help ourselves.”
Once again it sounds a little like Robert Lowell. After all, “Lowell’s imagination moved as on tectonic plates, during mania, the plates shifted and clashed. His mind and poetry did not rest; they grew, innovated, transformed.”
Without madness, one wonders if Lowell could’ve mashed up strange ideas and words in the way that produced a book of poems like Life Studies, poetic gems like “Skunk Hour,” “Waking in the Blue,” and “For the Union Dead.” Just like one might wonder if there ever could have been an Amazon or an Uber without a touch of euphoria and madness.
Just think, Ben Carlson reminds us, of the case of fiber-optics (a mash-up of clear glass with fibers and lasers). Today, the depths of the Atlantic Ocean feature fiber-optic cables that carry our data and voice communications around the world instantaneously. In late February, 2022, Meta released a new report on its investments in subsea fiber-optic broadband cables for Europe and the Asia-Pacific region. Meta expects the subsea cables will help create millions of jobs and generate hundreds of billions in GDP over the next few years.
And the dotcom boom played its own major role in all of it. As Carlson points out, “Before the dot-com bubble popped, telecom companies raised almost $2 trillion in equity and $600 billion in debt from investors eager to bet on the future…. The dot-com bubble laid the tracks for the Internet as we know it today.”
Alas, that might be especially important for us to keep in mind right now, because GMO co-founder and Chief Investment Strategist Jeremy Grantham popped back up recently to insist that we’re in a “superbubble” that’s about to burst.
As for Robert Lowell, “He would write throughout his life of free flight and sailing, bubbles and balloons, stairs, mania, and all things leading out of restraint and darkness.” For Lowell, “Bubbles and balloons, like hope, rise, swell, burst; they are given, like Achilles, a short, glorious life before an early dying.”
Still, no matter what, Lowell just kept going. Once, after one of his many breakdowns, his second wife noted he was “utterly heart-broken… shattered and ashamed.” Still, “Generally Lowell was able to get back into life uncannily well. ‘(his) recuperative powers were almost as much of a jolt as his breakdowns.”
When Kay Redfield Jamison writes about Lowell, she could be describing Silicon Valley too:
Ambition, an acute sense and longing for a place among the great, widens the imagination and emboldens it. Too little ambition narrows the emotional and imaginative field; it makes it less likely that risks will be taken and new territory seized. But ambition carries risk. It shares space with self-deception; it can cross into grandiosity and, more rarely, into madness. If one punches a hole in the sky there can be no certainty about what is beyond.
No matter where this tech mania goes from here, you get the sense this quintessentially American show will go on.
Image credit: The New Yorker magazine, November 3, 2008 issue