Silicon Valley often finds itself faced with a difficult question, one that’s asked so often it’s practically a parlor game: Are we in a tech bubble? In other words, is the volume of money pouring into technology companies sustainable, or are we on the brink of a dot-com-esque collapse?
In The Atlantic’s recent survey of dozens of tech thinkers, entrepreneurs, and executives, there was a curious response to this question that came up more than once. This isn’t a bubble, more than one respondent insisted, in the same way that there wasn’t an electricity bubble a century ago: People might have said it was a bubble at the time, but they were wrong.
That’s a compelling comparison, and it requires a bit of unpacking to properly assess. Was there an electricity bubble? Did people at the time even claim there was?
To find the answer, we have to travel back to the 1870s, when the inventors Charles Brush and Thomas Edison first demonstrated arc lighting and incandescent bulbs. There was an immediate economic blow to the gas companies, which saw their stock prices plummet, then recover, and eventually grow as they shifted their focus to heating and cooking technologies.
For decades, uncertainty about what electricity might do to the market prevailed. “With regard to our public lighting,” the physicist John Tyndall said in a speech in 1879, “I strongly lean to the opinion that the electric light will at no distant day triumph over gas. I am not so sure that it will do so in our private houses. As, however, I am anxious to avoid dropping a word here that could influence the share market in the slightest degree, I limit myself to this general statement of opinion.”