Phlogiston Blue - Dot Coms as 20th Century Cargo Cults

Dot Coms as Twentieth Century Cargo Cults

The bursting of the dot com bubble is far enough away now that it is easier to look at the whole thing dispassionately. One of the curses (or advantages) of being trained as a sociologist is that I tend to look past the techie aspects of issues to the social aspect.

The whole frenzy reminds me a little of a university course case study I was involved in of the Melanesian Cargo Cults. For those of you whose geography is a little hazy, the Melanesian islands are in the southern part of the Pacific.

Since most of you won't have studied anthropology, I'll explain.

Towards the end of the 19th Century there were outbreaks of religious fervour lead by prophets claiming that they had received a revelation. These disturbances ran through until the 1930s when they finally died out. All had a common thread in that they claimed that they proclaimed that a new age of plenty was imminent, and that a special 'cargo' would be delivered by the tribal gods, mythical heroes, or ancestors.

If the cargo was expected by ship or by plane then the cultists would built symbolic wharves or landing strips. In any event the result was usually the failure to take normal precautions to provide for the future. Crops were not sown, livestock was slaughtered and used for feasting, traditional material resources were abandoned and so on. An associated political agitation claiming that the old (colonialist) order would be over thrown frequently accompanied cargo cults.

At the time they started the cults were a novel phenomena, and people had no idea what the cause was - there were the usual banalities about the irrationality of the heathen mind, and the colonial powers set about repressing the cults.

In fact, the cargo cults were a perfectly rational response to what the tribes saw going on around them. They saw the colonial officials not doing any work but receiving supplies from overseas at regular intervals, and from this they constructed a mythos which was perfectly rational. A myth of gods who provided their people with plenty, even though those people planted no crops and raised no livestock.

From this it was only a small step to the postulation that the tribal gods would themselves soon start sending their own people cargo to support a life of ease. Some went as far as to suggest that the tribal gods were in fact sending the cargo, but that the colonists were intercepting it and keeping for themselves!

I'm embarrassed to say that at the time I was studying this, we all thought it was amusing that these savages should make this sort of mistake about the source of the colonist's goods. We were all just out of school, arrogant teenagers who knew it all. People in Western society, we knew, would not be so 'stupid'.

Sometimes I think sociology would be much better served if no one were allowed to study it unless they were over 30...

But if you stop and think about it, the dot com mania of the last few years has all the hallmarks of a cargo cult. There was no shortage of digital prophets proclaiming the dawning of a new era. There was the promise of plenty without having to work for it.

There was the abandonment of prudent provision for the future, with companies eschewing any semblance of 'due diligence' as they scrambled to get onto the dot com gravy train. There was the abandonment of traditional material resources in favour of the new as people double mortgaged their homes to fund the purchase of dot com shares whose PE ratio indicated that it would take hundreds of years to realise the initial investment.

And those involved all had the fervour of a religious cult - the gurus of MIT's Media Lab at the pinnacle, shading down through the seers of the stockbroking companies' analysts to the individual members who desperately believed that they were participating in a revolution.

And most of the people involved were basing their beliefs on an ignorance of the basic mechanisms of the market, and an inability to learn from their own history. For, despite all the hype, this was only a re-run of previous stock market frenzies. It's all happened before, go and read up about the South Sea Bubble or the railroad building mania of the mid-19th Century, to name but two instances, if you don't believe me.

And, of course, the ultimate irony of this outbreak of faith in impersonal, off stage, forces is the fact that it is all built around one of the most significant technological advances since the industrial revolution - the Internet!

Alan Lenton

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