A few years ago we had a post on how followers of tech messiahs often think in terms we'd normally associate with magic
Magic of association – – properties can be transmitted through proximity (physical or otherwise). This magic is particularly strong in Silicon Valley. Almost any association with someone or something noted for great wealth, success or innovation can pass on these properties. When no direct association is possible, it may be enough to simply invoke the name of a great success which leads us to...
Magic of language – – the proper use of words can alter reality. In addition to the aforementioned example of invoking names like Apple or Google, certain words such as "disruption" are assigned special power. Mission statements actually help determine the fate of companies. Great emphasis is also put on aspirational language which tends to segue into...
Magic of will/belief/doubt – – attitude also shapes reality. Things are more likely to happen the more deeply you believe in them. Correspondingly, skepticism and negative attitudes can undermine this magic. In extreme cases, particularly if surrounded by true believers, there are those who can simply will things into existence which leads us to...
Magic of destiny – – there are chosen ones among us. Their powers are all-applicable, not tied to any specific area or based on specific skills and knowledge; they can simply make things happen. Any association with the chosen ones is unquestionably beneficial. Like messianic American Express cards, they have no preset limits, but they do have at least one weakness: doubters. To question a chosen one is to inspire great hostility.
I guess it was inevitable we'd hit the graven image stage.
Matt Levine (from his newsletter)
“The way finance works now is that things are valuable not based on their cash flows but on their proximity to Elon Musk,” I wrote last year, and while I am not quite sure that it remains true — so far Musk’s proximity seems to be bad for Twitter Inc.’s cash flows, anyway — it is definitely still a part of postmodern financial analysis. In particular, if you have some crypto project, which almost by definition doesn’t have cash flows, you will value Musk proximity very highly. (Look at Dogecoin, etc.)
How can you obtain Musk proximity? I don’t really know — nothing in this column is ever Musk proximity advice — but, look, in these circumstances, it would be understandable if you resorted to techniques of ancient magic? Like if you were to sculpt a giant metal idol of Musk, you might go ahead and assume that the idol would have some valuable magical effect on your crypto project? And if you were to offer up that idol as an gift to Musk himself, and if he were to see it and bless it and accept it and perhaps tweet about it, then that would instill your crypto project with Musk’s divine spirit in a way that would probably make the price of your tokens go up? Is this all stupid? I don’t know? Yes? And yet? All I am saying is that humans have been offering precious idols to divine powers for thousands more years than they have been building discounted cash flow models in Excel. Do the idols have a better long-term track record than the DCF models? That is beyond my expertise. Anyway here is, I think you will have to agree, a thing:
Mark:
ReplyDeleteI'm not sure how to think about all this, but a key part of the system that keeps all this hype afloat is the support of various intermediaries. For example, I've never been quite sure why Tyler Cowen is such a big fan of Malcolm Gladwell, David Brooks, and Elon Musk---and it's not like Cowen is singlehandedly making the difference---my point is that there are various people who hold these views. It's not just the grifters and the suckers---there's also something else going on.