In Boom: Bubbles and the End of Stagnation (out today via Stripe Press) tech and finance writer Byrne Hobart takes his biggest risk yet. Hobart is currently best known for his newsletter, The Diff, in which he explores business strategies and technological trends at the heart of markets and innovation. In February 2023, Hobart observed in The Diff that Silicon Valley Bank (SVB) was “technically insolvent”—notable given that many of his 50K+ subscribers either had accounts with the bank, or knew other people who did. The SVB bank run shocked the world a few days later. Hobart’s reputation as a prophetic financial analyst was made.
Just under two years later, Hobart is following a familiar pattern in financial media: after building a loyal following through impartial analysis, he is leveraging his credibility to voice stronger, more particular opinions. In Boom, Hobart argues for a thesis unlikely to be found in any Econ 101 class: that financial bubbles, one of the most widely mocked and feared features of the contemporary economy, are actually an overwhelming force for good.
Hobart did not work alone on Boom. He co-authored Boom with writer and angel investor Tobiar Huber, who has published widely about cryptocurrency, metaphysics, and culture in both academic and popular publications. Huber is a follower of René Girard, and wrote his doctoral thesis about the role of mimetic speculation in the development of emerging technologies. Huber’s perspective lends a theoretic bent to a book which might have otherwise been a strictly economic analysis.
Together, Hobart and Huber argue that bubbles are coordination mechanisms for progress: by linking collective risk to potential financial rewards, bubbles enable megaprojects beyond the capability of any single person or industry—megaprojects which, although risky, mark inflection points in technology, economics, and culture when they are successful. The authors contend that zero interest rates alone can’t drive innovation because they “outsource[s] the biggest question—which general-purpose technologies?—to nobody in particular.”
Further, bubbles force people to take decisive bets on the future: when a bubble starts, either you believe in a radically different future, and thus buy in to the bubble, or are skeptical and opt out (thus betting against the different future.) The mania around bubbles also recruits new builders to deliver on its promised future, and injects massive amounts of capital towards a particular problem at the same time. Yes, when bubbles fail, massive amounts of capital vanish from the hands of optimists—and people are sure to remember falling on their face in the markets. But when bubbles succeed, we often fail to recognize them as “bubbles” at all—leaving many bubble success stories hidden in plain sight. Hobart and Huber use the bulk of their book to identify and explain these beneficial bubbles, and redeem the bubble in the eye of the public.
Boom is a three-part book, which places these case studies on bubbles after a provocative intro, which argues that stagnation is not over and that bubbles offer a rare solution. In the quasi-religious conclusion, the authors argue that bubbles have a spiritual nature and that bubble-participation is an experience.
Hobart and Huber know that readers will likely hear “bubbles” and immediately think of the collapse of the 1990s dot-com and 2008 housing bubbles. They deal with this PR challenge head-on: in Part I of Boom, Hobart and Huber lay out their own theory of bubbles, with technical terminology to help readers distinguish good bubbles from the bad. First, they distinguish “filter” bubbles from “speculative” bubbles: filter bubbles are those which involve participants walling themselves off from the rest of the world because they believe they’re onto something others don’t currently know or care about, while speculative bubbles involve spectators egging one another on in the public sphere. For example, the NFT craze of 2021 through early 2022 was a speculative bubble, whereas the QAnon conspiracy theory is a filter bubble. Both filter and speculative bubbles have delivered social good at different points in time. The development of the mRNA vaccine during COVID-19 was the result of a filter bubble, when Moderna “rejected the consensus that an mRNA vaccine was impractical in the short term.” And while the burst of the dot-com bubble—the quintessential speculative bubble—led to bankruptcies and layoffs, Hobart and Huber argue that it brought many benefits as well.
They write, “[The dot-com bubble] brought large numbers of people online. In 1995, 16 million people used the internet; by 2000, that figure had swelled to 300 million. Some business models flopped, some adjusted, and some were merely too early. Pets.com was notorious for trying (and failing) to sell dog food online, but it turns out that kibbles and bytes were a good combination after all; today, Chewy.com is valued in the billions.”
The most important distinction that the authors lay out is the one between “mean-reversion” and “inflection” bubbles. While the former tends to lead towards financial instability, the latter is helpful for driving progress. In a mean-reversion, bubble investors take out large amounts of credit on the presumption that future growth will mirror present trends (A prime example is the 2008 housing crisis.) However, when asset prices inevitably fall, these investors must sell their assets to repay their loans, creating a destructive downward spiral in asset prices that can spread throughout the financial system and cause a crash. By contrast, inflection bubbles are driven by a flood of equity investments based on a belief that the future will differ significantly from the past. Inflection bubbles are less likely to trigger financial crises than mean-reversion bubbles, since investors rarely take out heavy leverage. Moreover, the bubbles themselves serve as coordinating mechanisms for innovative projects, encouraging others to invest in transformational visions. Sometimes, these visions actually work out.
Part II of Boom contains case studies of bubbles that helped drive human civilization forward—with examples ranging from the golden age of corporate R&D, to the discovery of Moore’s law, to fracking and Bitcoin. The authors ensure that there is a provocative pro-bubble case to be made for any type of reader: the environmentalist might be surprised to hear the case for fracking, while the fiat money traditionalist might learn something about the case of Bitcoin. Hobart and Huber also include some classic stories from the Golden Age of American innovation: like the Apollo Missions or the Manhattan Project. At this point, readers might question why we need another retelling. Hobart and Huber repurpose familiar American stories to showcase the virtues of bubbles. Without the FOMO induced by the Cold War, would America have been motivated to send a man on the moon? Without the existential fear of Nazi Germany developing nuclear weapons first, would the U.S. have marshaled the resources to achieve nuclear fission? These projects required coordination and parallel innovation between multiple industries, stakeholders, and academic domains; without a bubble-like mania, they likely never would have succeeded.
In Part III, they continue to work through the ideas of philosophers Martin Heidegger and René Girard, exploring the metaphysics of both technology and desire. “For both thinkers, salvation doesn’t come from technology itself but from a transcendent outside,” they posit. They then cite Nick Land, the father of accelerationism, whose ideas have since been picked up by the e/acc movement (ironically, Land’s own accelerationism ends with human extinction via intelligence explosion).
Bubbles, the authors argue, give people a tool to turn their desires for the future into present day action and participation. One of the disquieting implications of such a messianic futurism is that the future has the capacity to affect the present; to quote Land, ‘the effect of singularity—the causal origin—is futural and not historical.’”
Hobart and Huber argue that FOMO and YOLO, the social forces that “move entire markets,” are really just Girardian mimetic desire in a new package. In keeping with their Girardian ethos, the authors even try to fuse bubbles and Christianian eschatology. While it’s impossible to capture the full extent of their project in a short review, they argue that all progress in science—whether in AI, biotech, or robotics—comes from the pursuit of perfection and immortality. They also liken messianic time, the Christian idea of a transformative period inaugurated by Christ that will mark the redemption of humanity, to economic bubbles: “[M]essianic time (…) represents a rupture in which the future is dislocated into the present and the present is extended into the future.” In places, their theorizing is a little thin, and many quotes from Boom could just as easily be tweets on X: like “markets channel our mimetic desires and violently discharge the accumulating mimetic tension” and “bubbles (…) fuse agency with destiny.”
The authors also disagree with the father of The Great Stagnation theory, Tyler Cowen, that economic stagnation—a prolonged slowdown in economic growth, innovation, and productivity gains—is coming to an end. Cowen’s “low-hanging fruit” hypothesis posits that much of the economic growth in the 20th century came from easily accessible innovations, such as basic infrastructure, education, and natural resource exploitation. In recent years, Cowen has said that new breakthroughs in fields like artificial intelligence, biotechnology, and green energy represent a fresh wave of “low-hanging fruit” that will power the 2020s. But in Part I on Boom, Hobart and Huber make it eminently clear that they do not believe more low hanging fruit will save us from stagnation.
“While the low-hanging fruit argument is plausible, it doesn’t fully explain the larger phenomenon of decline, status, and exhaustion we’re currently experiencing. Stagnation is occurring broadly, not only in areas of economic growth and technological innovation but also in culture and science more generally,” they write.
For Hobart and Huber, “stagnation” is not merely economic; it is a cultural disease that will require a spiritual solution. Echoing thoughts previously shared by Peter Thiel, as well as cultural critic and technology lawyer Paul Skallas (“The Lindy Man”), Hobart and Huber ask how many remakes and iterations of Star Wars or Spiderman are needed—evidence of just how uninspired our present-day culture has become. Hobart and Huber argue that short-form video social media is only further pacifying culture into contentment with risk-aversion, with machine-learning algorithms telling humans what we want to see based only on what we have enjoyed before.
For Hobart and Huber, this widespread social and cultural risk-aversion is the real stagnation problem—one which will remain a problem even if the GDP lines keep going up.
“Today, a lack of transcendent vision is the ultimate source of the crisis of meaning and the techno-economic and cultural stagnation that inflicts the West. Nascent bubbles in sectors like space exploration, AI, and renewable energy offer promise that this transcendent impulse has not entirely disappeared. […] We predict that they will most likely exhibit a deeply spiritual—and, in some cases, explicitly religious—impulse toward realizing and participating in something transcendent.”
With Boom, the authors take a shot at summoning the collective risk-taking they believe is so crucial to ending stagnation. They argue that their work would be justified “if only one new risk with potentially high civilizational payoff will have succeeded,” including artistic or philosophical achievements.
Some readers will be skeptical of the Boom project. It is not obvious that spiritual weakness is really at the root of stagnation; to some, the idea of stagnation existing at all might not be obvious (a world where OpenAI’s 01-mini can solve PhD level math problems does not feel particularly “stagnant”). Others who came expecting strict economic theory might be jarred by entire chapters devoted to religious, spiritual, and philosophical themes. Still others might object to the book’s taking Girardian theory on its face. But to be fair to Hobart and Huber, the authors do not demand that others take on more risks than they are taking themselves.
Boom is a vast, ambitious book, a broad-strokes “theory of history” of Freudian or Hegelian type that contemporary academics are often too scared to write, for fear they will get the details wrong. And for their intended audience, largely open-minded technologists who are already familiar with most of the philosophies and works and case-studies cited, the arguments have a decent shot at making an impact. Unlike participating in a bubble, Boom will likely fail to make the authors huge amounts of money (at least directly.) But in taking a big swing, Hobart and Huber have permanently moved themselves out of the “financial analysts” category into the “evangelist” category—except instead of selling a communion with God, they are selling a vision for realizing a radically optimistic future.
Boom: Bubbles and the End of Stagnation is for sale today.
