Magical Thinking on Silicon Valley and on Wall Street

   Magical Thinking in Silicon Valley and on Wall Street, based on chapter 45 in Fantasyland. The idea of Magical thinking is considered to be the belief that your thoughts, actions, or your ideas can influence events in the material world. We are governed by two types of thought processing, primary and secondary. Our primary thought process is ruled by pleasure  or feel good principle, where our desires seek fulfillment without consideration of what is actually possible or not. Magical thinking falls under our primary thought process.

Between the 1980s and the early 2000s, the United States experienced a time of extreme financial make believe. New technology and companies were emerging which gave people lots of new financial hope. As stated in chapter 45 on page 409, these companies had people fall under a “reality distortion field” and they thought too optimistically about the economy. By the early 2000s, most of the people who had lived in the Great Depression had passed away, or elderly. The young entrepreneurs and investors thought little about what such a hot economy could do to their future finances. Silicon Valley in California was and is composed of major technology companies. In the 1990s it created over 250,000 new jobs which increased the United states work population from India and China. 

Emerging from all of this projection about economic growth, came the “dotcom bubble”. The dotcom bubble was the technology stock in the United States which had significantly increased. The name came from the fact that people were buying stock in anything with a dotcom at the end of it. Citizens often knew little about the companies they were investing in but still had so much faith. In 2022, new technology is not new to us at all. A new phone, laptop, or tv seems to come out every month. But during the 80s and the 90s, the progression of technology was new to everyone. Citizens did not really know the potential, but were so swayed by the internet and advertisement of what could be. The emerging companies fell under Magical thinking as well when it came to their success. Without focusing on developing or improving any of their products, some companies were so lost in creating advertisements and gaining more investors that they never made a long term profit. This led to the end of magical thinking on Silicon Valley

In 2008, the United States entered the great recession where the stock market crashed. When companies ran out of revenue and started selling themselves out, the stock market plummeted which was a major contribution to the great recession. Without anything to profit from, and their main focus on being promotion and advertisement, led to bankruptcy, and lost money citizens all over America. This point in time can be compared to the gold rush and other times when economic fantasy ended in disaster. As stated in chapter 45 of Fantasyland on page 409 “We’d been there before– with the Virginia gold hunters in the 1600s, overbuilt railroads in the 1800s, rocketing Florida real estate prices in the early 1920s” , the great recession in 2008 was just another prime example.

     Today, some people use the word manifestation loosely which has similar meaning to magical thinking. Some people often believe that if they want something enough and speak it aloud, or write it a million times it will come true. The phenomena that we witness throughout history can be dangerous, because we do not recognize that we are digging a hole until we are at the bottom. In the 90s and early 2000s people witnessed young people like Jeff Bezos become billionaires, and the idea of what it took to become rich changed. But the same as the 1600s, not everyone was going to strike out and get rich off gold, or in this case technology or stocks. Magical thinking or manifestation is not so bad next to dedication, hard work, and reliability, but it becomes delusion when you place it next to a bandwagon. Are some religious practices based off of magical thinking? Or is there a solid belief in certain things that we are doing is necessary. Magical thinking and belief may sound similar but belief  should be based on credibility and morals. Chapter 45 page 411 of Fantasyland states “Magical thinking enables you to see good where there may only be bad. The financiers were a mixture of cynics  and believers. When their faith in the financialized magic ended in 2008, they promptly chucked those wishful beliefs , of course, and defaulted to pure, reality based Cynicism.” In other words those believers came down from their high and were forced to face reality. Most likely never having trust in the stock market again. But just as said in Fantasyland, when something fails our fantasy finds a new home.

We do not know when the next “goldrush” will strike us. It will most likely be when all of the magical thinkers in Silicon Valley are elderly or passed away. Same as the great depression. Like any history, if it is forgotten it will repeat itself. Do we not put emphasis on the economic disasters throughout history because it is embarrassing? Even if it is, without understanding our patterns we are doomed to repeat the same thing in another form. The lesson within this chapter is important as it will be a reminder for when I live through scenarios that may be too good to be true, or too bad to be true. Or magical thinking could take over. At the start of the COVID-19 pandemic I remember being in school talking to friends, smiling, thinking that a virus could never force itself on the United States. And just a couple weeks later, sooner than I could ever expect it, I was out of school, and my life along with everyone else’s changed forever. It seems to be just a part of human nature to think that “it could never happen to me”, or “If it can happen, why should it not happen to me”. Optimism is something everyone in the world needs, but delusion mixed with great optimism is dangerous, also known as magical thinking.