This article is part of the On Tech newsletter. You can sign up here to receive it weekdays.
Let’s talk about what Britain’s bicycle bubble more than a century ago has in common with current crazes for nonfungible tokens, technology start-ups and electric vehicle companies.
We’re more than 10 years into a technology gold rush that in some corners makes absolutely no sense. If and when the zaniness fades, people could lose a fortune. But collectively, tech manias do bring some good. As my colleague Erin Griffith said: “Bubbles, while messy, lead to progress.”
I spoke recently to William Quinn, a lecturer at Queen’s University Belfast and co-author of “Boom and Bust,” a history of financial bubbles including the 1929 stock market crash in the United States and the financial crisis more than a decade ago.
The book identifies three root conditions present in bubbles: Borrowing money is cheap or people have a lot of money saved up. It gets simpler to buy and sell assets, like what’s happening now with stock trading apps including Robinhood. And there’s a mentality that the prices of assets can only go up.
All of those conditions, as Griffith recently wrote in a hilarious and useful article, are present now. That’s partly why we’re seeing repeated spikes of “meme” stocks such as GameStop, hype about NFTs, and eye-popping IPOs including the one that left Airbnb’s chief executive speechless.
But Quinn also told me that technology-related bubbles are different in important respects to other boom-and-bust cycles. For one, they don’t tend to ruin the world. “I’m not worried about NFTs causing the next financial crisis or anything like that,” he said.
Unlike the housing market bubble, technology bubbles aren’t typically inflated by borrowed money that can cause cascading effects. Speculative technologies are also often somewhat disconnected from the rest of the economy.
And, Quinn said, when tech bubbles burst, they can leave behind something positive. Enter the bicycle bubble.
The invention of the “safety” bicycle in the late 1800s was a revelation, and the basic design lives on today. We might not think of the bicycle as technology, but it was a significant innovation for relatively reliable and affordable transportation.
It also kicked off a mania of British bicycle manufacturers that went public, posted soaring stock prices and then collapsed. What was left behind, Quinn says, were people and companies that, in some cases, helped usher in new innovations in cars, motorcycles and road tires. Some of the bicycle pioneers are still around.
Like the bicycle bubble, good things happened in the wake of the late 1990s dot-com bubble in the United States. Companies including Amazon survived and thrived. Bankrupt telecommunications companies left behind cheap and useful internet pipelines that enabled an online explosion.
More recently, a cryptocurrency collapse several years ago got more people curious about the benefits of the promising underlying technology, such as the blockchain.
“The bubble mania can be distracting,” Griffith said, but she added: “The perspective of a lot of people in tech and finance is that a mania or a frenzy drives attention, excitement, enthusiasm and talent to something new.”
I don’t want to ignore the harm of tech busts. When bubbles burst, people lose their jobs and, in some cases, all of their savings. Quinn said that he believes regulators should do more to prevent hucksters from cheating people and walking away with millions. Griffith said she’s worried that people who go broke on tech fads might become embittered.
Quinn said he believes that bubbles, which were relatively rare between the 1920s and the 1980s, are now happening more frequently. Money and information travel quickly around the world, which helps fuel manias. Bubbles may be a fixture of modern life — with all the potential harms and benefits that come with them.
Tip of the Week
How to score a cheap airfare
As more of us prepare for when it will be safe to fly, the New York Times consumer technology columnist Brian X. Chen tells us how to save on airfare with his favorite ticket price prediction app.
If you’re like me and desperate to go somewhere, it might be a great time to start hunting for travel deals — even if you don’t plan to travel until the winter because … pandemic.
There are nifty apps that use algorithms to predict when airfares will dip. I’ve scored some remarkable deals, saving hundreds of dollars on flights to Hawaii, New York and Taiwan. These algorithms might be a bit less dependable during such an unpredictable year, but it’s still worth checking them out.
My favorite app for saving on flights is Hopper. The free app on iOS and Android lets people register for price-alert tracking that recommends whether to buy a plane ticket now or wait for prices to drop for your destination. (Hopper also tracks prices for hotels and car rentals, though I haven’t used those features.)
Here’s how to use the Hopper app:
Select your preferred travel dates. Hopper will show you a color-coded calendar, with green dates showing the least expensive days to fly and red for the highest prices. You can choose to view ticket prices only for nonstop flights.
Sit back and wait for advice: Once you select the travel days, Hopper will send notifications to suggest whether to buy tickets now or wait for the price to drop. I tend to look at the Hopper flight alerts and then purchase tickets directly through the airline.
(Be aware that when large numbers of flights were canceled during the pandemic, Hopper was overwhelmed with complaints from people who booked tickets through the app and had trouble getting help.)
Before we go …
Pushback against Amazon’s zeal for control: The company needs to lower labor costs and increase productivity, which is why Amazon measures every moment of a worker’s existence, my colleague David Streitfeld wrote. The pushback against Amazon’s desire for control is showing up in restive warehouse workers, Congressional oversight, labor regulatory attention and tweets about bathroom breaks.
App filters may be a real-life social experiment on girls: MIT Technology Review examines the risks of app features that “beautify” people’s appearance by erasing blemishes, changing eye color and recoloring faces and bodies. Some of these filters can be playful and helpful, but some researchers and teens worry that it’s skewing the self-image of women and girls.
When Facebook is the local news channel: A Facebook group dedicated to local information in and around Beaver County, Pa., helps spread news about potholes, closing businesses and shoplifting. But NBC News wrote that the police have also had to intervene to dispel exaggerations and falsehoods in the group, including false rumors about a killer on the loose that needlessly frightened people and tied up officers.
Hugs to this
La Verne Ford Wimberly, an 82-year-old woman in Tulsa, Okla., has been wearing her Sunday best each week for virtual church service. Her selfies on Facebook of her colorful attire (including hats!) have made her a star.
We want to hear from you. Tell us what you think of this newsletter and what else you’d like us to explore. You can reach us at ontech@nytimes.com.
If you don’t already get this newsletter in your inbox, please sign up here.
