the gilded age  
photo of Larissa MacFarquhar

  The Gilder Effect
To say that George Gilder is an optimist is to realize what a dowdy, cautious word "optimist" is. An optimist anticipates the better outcome; Gilder believes that each new day the world will bring forth boons so unexpected and wonderful that they couldn't be imagined the day before. He believes that now is incomparably the best time to be living on earth, and that in the future things will get even better. Ronald Reagan's first budget director, David Stockman, said of Reagan that if he walked into a room filled with shit he would look for a pony. Gilder is an optimist like that. It is no accident that Gilder—scourge of feminists, unrepentant supply-sider, and now, at sixty, a technology prophet—was the living author Reagan most often quoted.

On a cosmic level, Gilder is an optimist because he has faith in God, but in terrestrial matters he is optimistic because he believes that it is impossible to predict the future based on the past. "Any time in human history that people have projected existing trends, they have predicted catastrophe," he says. "If you imagine that the only resources you will ever have are the resources you have now, then inevitably you will predict their exhaustion. Malthus did it. Ricardo did it. In the nineteen-seventies, an international group of scientists, gathered under the auspices of the Club of Rome, declared that within a century there would be famine everywhere, energy resources exhausted, pollution risen to impossibly toxic levels, and, I believe, a new Ice Age on the way. What the doomsayers don't understand is that the reason humans prevail is creativity, and creativity always comes as a surprise."

Gilder's faith in providence is reflected in his personal life. He is famously ass. He has often shown up for business meetings in socks of different colors, or wearing sneakers with a suit because he neglected to pack shoes. Tales of

Gilder's absent-mindedness are legion. There was the time he was having lunch with Mrs. Rockefeller and, his interest piqued by a remark on china patterns, he turned his soup bowl over to investigate its provenance, not noticing that the bowl was full. Gilder's practical disabilities seem to stem from a faith that the world is his friend, and if there comes a time when he really needs socks, somehow the world will supply them.

Fortunately for Gilder, he has lived through three moments during which optimism of his ecstatic variety has been rewarded: the Kennedy moment, the Reagan moment, and now the Internet moment. He flubbed the first one. Even though he admired Kennedy, he felt obliged, as a Republican, to balance his contempt for Goldwater with a skeptical attitude toward Democrats. He did his best to engage the spirit of the times; for instance, he tried (and failed) to organize a Republican Freedom Bus. The second moment he caught perfectly: in 1981, he published a book, Wealth and Poverty, that exalted capitalism as the furfillment of the Christian mission on earth. The book was enormously influential in igniting the supply-side passions of the early eighties; it was a favorite of Reagan's and became a best-seller around the world, making Gilder rich for the first time in his life. But it is the third moment, the Internet moment—one that Gilder has been waiting for, longing for, praying for, ever since the late seventies, when he fell in love with the semiconductor industry—in which he has most spectacularly come into his own.

In the past year or so, the market in high-technology stocks has found itself periodically swayed by a phenomenon known as the "Gilder effect." Each month, Gilder publishes a newsletter, the Gilder Technology Report, in which he elaborates on what he calls his paradigm: his vision of the future of technology, in terms both sweeping (bandwidth will become virtually free) and specific (CDMA phone systems like Qualcomm's will displace TDMA systems like those of A.T.&T. Wireless). On the last page of his report, Gilder publishes a list of the thirty-odd companies whose products exemplify his paradigm. The list isn't supposed to be a list of investment bargains Gilder has no interest in a company's financial history, and he doesn't analyze how well a stock is currently valued— but it has been taken as such by many of his readers. Once a month, at the appointed hour, these readers—who pay two hundred and ninety-five dollars a year for a subscription—rush on-line, scan his report for any new company, and then hurry to buy that company's stock. Since there are now approximately sixty-five thousand subscribers, this produces quite a startling effect. In last month's report, for instance, Gilder added Avanex, a fibre-opticalcomponents company, to his list. His report came out on April 24th, when the market in technology stocks was floundering, but, within minutes of the report's publication, Avanex's stock price rose from fifty-five dollars to eighty. By the end of the week, it had passed a hundred and forty. TeraBeam, another company that Gilder recently wrote about, found that its value increased something like fortyfold in the weeks following his recommendation. Paradoxically, the Gilder effect has begun to erode Gilder's reputation as a prophet. Now that many thousands of people buy whatever stock he recommends, his judgments have become self-furfilling. He no longer predicts markets; he steers them.

But Gilder is not, in the end, so very interested in markets, or E-commerce, or anything that might be described as "content." He is gripped, rather, by the poetics of communications technology itself: by the magical intricacies of its circuits and fibres, and, even more, by the way in which, in its most enchanted, wireless moments, it seems to evade materiality altogether. Gilder was one of the first writers to foresee the potential of the Internet: as early as 199(), in his book Life After Television, he wrote about "a crystalline web of glass and light," and "telecomputers in every home attached to a global fiber network." Perhaps one of the reasons his writing about technology has found such a wide audience is that, to him, technology's appeal is ultimately spiritual. In his forthcoming book, Telecosm, Gilder writes, "Futurists falter because they belittle the power of religious paradigms, deeming them either too literal or too fantastic. Yet futures are apprehended only in the prophetic mode of the inspired historian. The ability to communicate—readily, at great distances, in robes of light—is so crucial and coveted that in the Bible it is embodied only in angels."

THE week before he published his April report, Gilder was in San Francisco on business. That morning, he had gone running (he runs nearly every day); in the evening, Merrill Lynch was paying him to give a speech in Orinda—a suburb in Contra Costa County, which, owing to the large number of Silicon Valley executives who live there, is one of the wealthiest counties in North America. Merrill Lynch had rented a movie theatre for the occasion, and Gilder arrived early, as a man was affixing to the marquee the words "Merrill Lynch Presents George Gilder," underneath the title of the movie that was currently showing, Erin Brockovich. The main street of Orinda has the feel of a nineteen-fifties small town reconstructed for the set of a movie. Across the street from the theatre is a store called Yogurt Bear, and down the street from Yogurt Bear is a little fountain surrounded by flowers. Gilder had an hour to spare, so he decided to walk to a small cafe around the corner to fortify himself with a prespeech fruit smoothie. He selected a table outside, underneath an umbrella, and sat down, a little out of place in his black suit.

Gilder looks like a character from a nineteenth-century novel about an English village: the boyish church organist, perhaps, or the local priest on a bicycle. He is tall, pale, and spindly. He has blue eyes, thin lips, and a pointy chin. He wears metal-rimmed glasses. All his running has made him so wiry and springy that his limbs appear to be made of some resilient, lightweight wood or metal instead of flesh. Gilder sipped his smoothie and thought about his speech. It was going to be a slightly awkward business, this speech. The audience would expect to hear his newest opinions on companies, but he considered it his duty to his subscribers not to reveal such information to anyone before releasing it to them. All he could think about that afternoon was Avanex—he had spent the previous evening, over dinner in San Francisco, in a long and, for him, at least, impassioned discussion with Avanex's head of research and development—but somehow he was going to have to avoid so much as mention ing the company's name. Gilder is not naturally reticent. At a quarter to seven, he made his way back to the theatre. His knees and elbows and the wing bones of his back poked into the thin fabric of his black suit as he walked, like the metal spokes of an umbrella.

When the audience had settled, Gilder mounted the stage. To his right and to his left, in twin Deco murals painted on the sides of the proscenium, an enormous naked girl was suspended in joyous flight through a starry sky. Compared to the naked girls, Gilder looked even thinner and more umbrellalike than usual. He peered out at the audience through his glasses. He began in a rambling fashion to talk about his paradigm. The computer era what he calls the "microcosm"—is over, he said. Now we are entering the age of the telecosm: an age of communications and networks. Every age of industrial development is characterized by a particular abundance and a particular scarcity, and those technologies succeed which conserve the scarce resource and waste the abundant one. Before the industrial revolution, land was abundant and power was scarce. Later, power became abundant and land relatively scarce. In the age of the telecosm, bandwidth will become virtually free. Gilder moved his hands up and down a great deal as he spoke, with flattened palms outward, in the manner of one directing airplanes on a runway. His gestures, though, bore no discernible relation to the substance of his sentences, so it appeared that his arms were being controlled by someone backstage who was unable to hear him speak and was forced to rely on guesswork. His voice sounded strained and whiny, as though he were struggling to be heard without a microphone. Gilder is not a natural public speaker. He used to roll his tie up and down, like a window shade, while he spoke, but he has, for the most part, overcome this habit. The real scarcity in the age of the telecosm, Gilder continued, is time: the ultimate impediment to a network's efficiency is the speed of light, which restricts the speed of information flow around the world. The answer is to bring information physically closer, by caching popular Web sites in many international locations so that they no longer have to be sent thousands of miles from their country of origin. This is why companies developing new storage technologies, such as Novell, Sun Microsystems, and Mirror Image, will become increasingly important.

After Gilder finished speaking, many people wanted to ask him questions. but nobody, it seemed, was interested in pursuing the intellectual implications of his paradigm. Nearly every question consisted simply of the name of a company whose market potential the questioner wanted Gilder to evaluate. This is usually the case when Gilder speaks, and it disappoints him, not just because he would much rather get into a discussion about technology than speculate about the stock market; it disappoints him because it demonstrates how widespread what he considers to be a wrong-headed conception of capitalism has become. Capitalism, to Gilder, is not about making money—at least, not in the grasping, individualist sense. It has been a source of great irritation to him over the years that the right has been almost as hard on the capitalist as the left: the two sides may differ on the merits of capitalism as a system, but they tend to agree that the individual capitalist is a figure of, at best, ambiguous morality, driven by greed or, to put it gently, rational self-interest. To Gilder, this is not only offensive but inaccurate. Rational self-interest, he argues, leads to caution, of a sort that might keep an existing enterprise in business but will never generate the kind of radical innovation that leads to new companies and large fortunes The true entrepreneur has no time to stop and perform calculations. Instead, in love with the beauty of his idea, he rushes imprudently forth, gambling all he has on the chance to create something new. Rationality and prudence are for socialists, who believe that the future may be calculated based on the past; capitalists, who know that the future depends on human acts of creation and is thus incalculable, leap blindly into the unknown.

When Wealth and Poverty was first published, Gilder's depiction of the irrational entrepreneur was considered quite eccentric, but in the intervening twenty years it has become conventional wisdom. It is likely that both the extraordinary popular success of the book and the suspicion with which it was initially greeted by many economists were due in part to Gilder's fervent prose. The book is as much sermon as analysis, and its ideology of faith and antirationalism allows for a revelatory extravagance that could never accommodate a liberal program of improvement. Gilder is in the business of exhorting ardor for the future more than analyzing the world as it is, and his vocabulary suits this mission. Even his darker warnings are couched in language so grandiose and Biblical that they seem fables rather than admonitions against real possibility. In Wealth and Poverty, for instance, he writes, "The rates of taxation climb and the levels of capital decline, until the only remaining wealth beyond the reach of the regime is the very protein of human flesh, and that too is finally taxed, bound, and gagged, and brought to the colossal temple of the state—a final sacrifice of carnal revenue to feed the declining elite." In his celebration of the entrepreneurial leap, Gilder can sound like Ayn Rand, but there is an important difference between them: religion. Rand believed in the glory of selfishness; Gilder believes that capitalism properly understood is altruistic and dependent upon faith in God. (Rand was so disgusted by what she took to be Gilder's perverted sentimentality on this point that she devoted the last public speech of her life to denouncing him.) Gilder's explanation for his thesis is that, because an entrepreneur can never be sure of a return on his investment, starting up a business is like offering a gift to the world, in the hope, but never the certainty, that the gift will be reciprocated.

One Monday afternoon, about a month after he returned from San Francisco Gilder got into his car and drove from his home in the Berkshires to Manhattan He had several appointments in the city over the next few days before he had to fly to Madison, Wisconsin, to address the state investment board. There was, for instance, a do at the United Nations: an international evening devoted to figuring out how to narrow the gap between rich and poor. Gilder was to be a featured speaker at a table devoted to the impact of E-commerce. He arrived at the U.N. somewhat harried, tie askew, wheeling a suitcase and carrying a tote bag stuffed with papers. He was looking forward to skirmishes. This was, after all, the quintessential bleeding-heart event: he expected to be, as he had been in years past, the most conservative and the most optimistic person present. The dinner was not a situation in which Gilder would have found himself in the normal course of things; he was there because of his connection to its organizer, Peggy Dulany, nee Rockefeller, whose father, David Rockefeller, had been a sort of substitute father for Gilder when he was growing up. Among the Rockefeller children of Gilder's generation are some notorious liberals: Peggy is a friend of Castro's; Abby has devoted years to ridding the world of flush toilets, for environmental reasons; Eileen is a proponent of alternative medicine. In this group, Gilder was the only one to turn out conservative—an eccentricity that is tolerated in his adoptive family with varying degrees of resignation. Gilder's real father died at twenty-eight, when Gilder was three, flying an Air Forces plane on the way to serve in the Second World War. Before Richard Gilder went into the Air Forces, he made a deal with Rockefeller, who had been his college roommate, that if he were to die in the war Rockefeller would take care of his son. By dying young, Richard Gilder, as his son puts it, "attained immortality and erected a standard of manhood which would forever prove unattainable." After his father died, his mother married his father's cousin, Gilder Palmer, and the two of them ran a marginally profitable dairy farm in Tyringham, Massachusetts.

Gilder comes from an old—though no longer, in his parents' generation, wealthy—East Coast family. One of his great-grandfathers was Louis Comfort Tiffany, the glassmaker; another was Richard Watson Gilder, the editor of the magazine Century and a friend of Grover Cleveland and Walt Whitman. Family legend has it that a handwritten manuscript of Leaves of Grass exists somewhere in one of the Gilder farmhouses, misplaced by a forgetful relative. The Gilders were painted by Cecilia Beaux and sculpted by Augustus SaintGaudens. A onetime fiancee of Gilder's, the novelist and playwright Jane Stanton Hitchcock, remembers attending a dinner at the house of Gilder's aunt in Washington Square sometime in the seventies, at which conversation turned to the way the war had torn the family apart. She realized only gradually that it was the Civil War they were talking about. But the family is not overly concerned with preserving past grandeur. When Gilder was fifteen and his family's barn, in which they kept cows and antique Tiffany glass, burned to the ground, they saved the cows.

Gilder went to the Hamilton School, Exeter, and Harvard. Hamilton was a progressive school in New York City: its students were taught how to launch protests, they practiced being unionists, and their sex instruction took the form of pretending to be salmon. Gilder was frequently disruptive, and he became known there for stealing books from the library. In all three schools, Gilder was a dreadful student. ("He has become disciplined in a way that one might not have expected when he was young," Rockefeller observes delicately, when asked about Gilder's career.) He was expelled from Harvard after his freshman year for failing courses, and, wanting to do the manliest, toughest thing he could think of, he joined the Marines. After six months, though, he reapplied to Harvard, was taken back, and eventually graduated, in 1962.

Gilder had attended enough Rockefeller dinners at the U.N. to know that if he didn't go on the attack his tablemates would agree with one another, and they'd all fall asleep especially with an insipid topic like closing the gap between rich and poor. So when it came his turn to introduce himself, he said, "My name is George Gilder, and I'm an advocate of gaps." There was a silence. "Why?" someone asked. Gilder explained that entrepreneurship was the essence of capitalism, and, since some people were more entrepreneurial than others, gaps were inevitable. "So will the rich get richer and the poor poorer?" asked a concerned person at the table, who worked at a hedge fund. "No," Gilder told him impatiently. "There will be more and more rich people."

That evening, Gilder had been set up against Robert Hormats—the vicechairman of Goldman Sachs International, who served as Deputy U.S. Trade Representative under Jimmy Carter and Assistant Secretary of State under Reagan. Gilder considered Hormats, whom he'd met a few times before, smart but hopelessly lefty, and was looking forward to sparring with him. Politics was not the only difference between them. Hormats is the sort of man who radiates success, good health, and contentment. He is the same age as Gilder but looks fifteen years younger; he is blond and broad-cheated, and carries himself with an air of unimpeachable geniality, as though it had been his experience in life that people either agreed with him right away or rapidly succumbed, without animus, to his charisma and capacious intelligence. Gilder, on the other hand, darts into an argument with the aggressive glee of an underdog who sets out to shock, and feels he has failed if no one is offended. Although he is often treated as a guru, Gilder does not have a guru personality. It is not in his nature to cultivate an aura of gravitas and infallibility; instead, he dances twitchily about, fists flailing, glancing warily around him, clinging to his own anxiety as a sign that he is vital—that he has not yet surrendered to smug venerability. This sense of constructive malaise is a character trait, but it is also, for Gilder, a long-standing moral commitment. One of his favorite books in college, Jose Ortega y Gasset's The Revolt of the Masses, an exaltation of spiritual aristocracy, warns against the dangers of contentment. Ortega writes, "There are centuries which die of self-satisfaction through not knowing how to renew their desires, just as the happy drone dies after the nuptial flight."

As the evening proceeded, however, Gilder discovered, to his dismay, that he and Hormats agreed on most issues. Afterward, in an effort to explain this puzzling development, he mused that the Internet had tended to bring liberals and conservatives together: the freewheeling pluralism of Internet culture had inclined many liberals against government regulation, and because E-commerce seemed to lower the barriers to entry in many businesses it tended to make both liberals and conservatives more sanguine about the long-term prospects of the free market. "The heat of the herd." Gilder fretted to himself. He tends to feel that if people agree with him it is a sign that he is failing to think far enough ahead. Perhaps it was time to move on.

G ILDER was not always so conservative. As a young man—in college, and for the first few years after graduation—he thought of himself as a progressive Republican, on the basis of his scorn for Goldwater and the John Birch Society and his support for the civil-rights movement. He worked at The New leader, a magazine known primarily as an organ of the anti-Communist left. He cultivated a liberal aesthetic in his life style. He moved to New York and lived in the East Village, on Twelfth Street. He slept during the day, and in the evening he walked over to Slugs, a jazz club on East Third Street that was open almost all night. At Slugs, he would listen to Pharoah Sanders and Sun Ra and write love letters to Joan Didion, whom he knew slightly, through her boyfriend. When he wasn't writing letters to Joan Didion at Slugs, though, he was writing speeches for Nixon. (Later, he wrote speeches for Senator Bob Dole as well, though his relationship with Dole was rocky: once, his college roommate, Bruce Chapman, recalls, Dole took a speech of Gilder's, scattered it around the floor of his hotel room, and, pointing to the pages one by one, reproached Gilder—"Bad! Bad! Bad!"—as if he were a dog who had made a mess indoors.)

Gilder's sixties aesthetic lingers in his writing style, with its Beat-inflected run-on sentences. Pondering his twenty-seven-year-old self in a mordant E-mail, Gilder writes, "I am disgusted. This is a typical 20th century blade, a secular, liberal, priapic, poseur poetic, guilt ridden Wasp, infatuated with blacks in jazz and 'soul' and blues, sweating to suck up their swashbuckling manhood, sure that the world's greatest writers were Norman Mailer and Joan Didion and Robert Lowell (it would take him about a decade of heavy lifting to figure out that contemporary poetry is junk and most of his writer heroes nihilist fools or Marxoid fantasists), quite admiring of Castro and Ho Chi Minh as agrarian patriots, beating a bed in a weekly stint of Wilhelm Reichian Orgone therapy at a shrink's on East End Avenue, and disdainful of businessmen and technologists who were deemed to lack 'soul.' In general, a typical intellectual parasite on the noble body of Capitalism. " Eventually, though, he moved to the right. He got to know William F. Buckley, Jr., who, some years before, had founded National Review. The publication of the Moynihan report on the black

family, in 1965, spurred him into a lifelong campaign against welfare, and Theodore Draper's denunciations of Castro for The New Leader extinguished what sparks of leftist sentimentality he had once possessed. Back then, Gilder was obsessed with women. He picked up women everywhere: by the side of the road in the Berkshires, in hotel bars, on Greyhound buses, in diners, in museums and movie theatres, in the park. "He 'loved' them all, so he said," Gilder continues in the E-mail, "but he was in general, with women, as the best ones often detected, a jerk and a creep." He asked at least three women to marry him before one said yes.

Despite his relentless pursuits, Gilder never really attracted the sort of female attention he craved until the early seventies, when he discovered his vocation as an anti-feminist. In those days, he was living in Cambridge, editing the Ripon Forum, a magazine put out by the progressive-Republican Ripon Society, when he wrote and published a defense of Nixon's veto of the Mondale-Javits day-care bill, on the ground that, now that welfare had driven away inner-city fathers by rendering them superfluous, day care would deprive poor children of their mothers as well. The female members of the Ripon Society were outraged, and he was fired from his position almost immediately. It was Gilder's first taste of controversy, and he discovered that he liked it. It was fun being the object of attack. After one debate, on PBS, he remembers that "what seemed like hundreds" of women rushed forward onto the stage to argue with him. Since he had spent most of his youth looking for ways to arouse female passion, he reckoned he had found his calling. The aftermath of the day-care brouhaha, though, was not so exciting. Expelled from the Ripon Society, Gilder left Cambridge and moved to New Orleans to work for Ben C. Toledano, a friend of his who had recently decided to run for the Senate. The following few months were, Gilder now feels, the lowest point of his life. "I had no money," he says. "My love life was in a shambles, left behind in Cambridge. At one point, I decided to write Sexual Suicide. I'd work for Ben in the morning, and then I'd write all night long at the Cafe du Monde, on Jackson Square. I was lonely. I was a little creep down in the library writing my screeds and wandering the streets at night with four dollars and sixty-five cents in my pocket. But I did get through the book."

If the day-care controversy had made him something of a feminist target, Sexual Suicide was the book that elevated him, in the eyes of the women's movement, to a veritable Satan. The book now reads like a peculiar relic of the seventies, a kind of political camp, but at the time it caused a tremendous row, and in its wake Gilder was awarded the title of Male Chauvinist Pig of the Year by both Time and the National Organization for Women (a title he still refers to with some pride, noting that the previous year's recipient was Norman Mailer). The book argued that, without the taming and ego-bolstering influence of a wife and family to support, men were barbarous savages, liable to dash about raping and pillaging and generally wreaking havoc with their predatory lusts and destructively short-term attention spans. "Men lust, but they know not what for," Gilder wrote, with the Iyricism of the damned. "They fight and compete, but they forget the prize: they spread seed, but spurn the seasons of growth; they chase power and glory, but miss the meaning of life. " Gilder concluded that heterosexual marriage was the key to civilization, and that homosexuality, welfare (which, by making men financially superfluous to a family, led to emasculation and illegitimacy), and feminism (ditto) were its downfall.

His writings on the women's movement are the closest Gilder gets to pessimism. "Will the scientists and women's liberationists be able to unleash on the world a generation of kinless children to serve as the Red Guards of a totalitarian state?" he demanded in the apocalyptic conclusion of Sexual Suicide. "Will we try to reproduce the Nazi experiment, when illegitimacy was promoted by the provision of lavish nursing homes and the state usurped the provider male? "

Gilder now lives with his wife, Nini, and their four children, in the red farmhouse he grew up in, in Tyringham (population approximately three hundred and fifty). Nini comes from the nearby town of Lenox, and is, according to Midge Decter, who edited two of Gilder's books, "quality people." Gilder's mother, who is a professional pianist, lives half a mile away, and helps to home-school the Gilder children. (Each child has spent at least one school year at home, in part to inoculate him against noxious secular influences.) Gilder has set up his of fice in an old mill building in Housatonic, a neighboring village just a few minutes away from the Norman Rockwell Museum. The setting couldn't be more tranquil: outside Gilder's window, the Housatonic River rushes over rocks; the only audible sounds are splashing water, wind blowing through trees, and someone typing next door. Nonetheless, some time after his return from San Francisco Gilder found himself preoccupied with an accident.

The day before giving his speech in Orinda, he had been driving his rental car somewhere in Oakland and had rammed hard into the Ford Ranger in front of him. Nobody was hurt, but he was startled and disturbed all the same, because he was sure he'd been driving slowly and carefully. He was convinced that the accident was a warning of some kind, but about what? Was he becoming sloppy? Complacent? Giddy with his own success? He couldn't stop thinking about it. Looking backward to change lanes and missing the big thing right in front of his nose that could have left him dead—the incident seemed fraught with meaning. Gilder does not, in any case, believe in accidents. Many years ago, in the mid-seventies, he retreated to a small Caribbean island to write his third book, Naked Nomads. The book described the plight of the single man: how without a woman to tame him he was more likely to commit suicide, more likely to commit a crime, and more likely to indulge in reckless behavior. One afternoon, taking a break from writing, Gilder stood for a moment at the edge of a small cliff, before climbing down to the beach to sunbathe.

Next thing he knew, he had inexplicably pitched forward and fallen face first onto the rocks below. That time, too, he had felt himself in the grip of signifcance. Lying in the hospital with a broken nose, he remembered that only the day before he had been writing about the fact that single men are six times as likelY as married ones to die from "accidental falls." He, Gilder, was a single man, and there he was, falling.

The single man's tendency to get into accidents Gilder attributes to psychology, but in general his sense that even trivial events hold meaning is a religious one. He has become much more religious as he has grown older. He describes himself on his Techrnology Report Web site as "an active churchman." Satan now makes occasional but striking appearances in his work. He talks a lot about entrepreneurial creativity and human freedom, but it is not a radical, existential type of freedom he is referring to; it is, rather, freedom within a world that is already filled with ideas and meaning—put there by God, and waiting to be discovered through a mysterious combination of analytic brilliance and intuition. Gilder is, in fact, aufficiently committed to the idea that divine intelligence permeates all earthly occasions that he has turned away from Darwin and has begun reading writers such as Michael Denton and Michael Behe. Denton and Behe are not creationists as that term is usually understood—they don't reject the idea of evolution per se; they don't believe the world was created all at once, six thousand years ago—but they reject the idea that evolution is a purely mechanical process with no inherent purpose. They argue that the complex workings of molecular biology and the precise fitness of the cosmos for human life compel the conclusion that the universe—evolution and all—was designed by a benevolent deity for the purpose of producing mankind.

To Gilder's mind, most of what secularism gets wrong about the world can be summed up in the phrase "the Materialist Superstition." By this, he means the idea that the world is composed of physical matter, and whatever else may arise—love, religious feeling—is a product of matter and reducible to it. Included in this mistake, according to Gilder, is any sort of economics that imagines industrial development to have a momentum of its own apart from the genius of individual entrepreneurs; any psychology that conceives of consciousness as a side product of the brain; and, of course, any biology that understands evolution as a purely bodily process spurred by carnal need and random mutation. Gilder believes that quantum physics has confirmed his view: to him, the discovery that matter is, at base, composed not of inert, solid particles but of waves, fields, and probabilities means that matter is, at base, intelligence or spirit.

More than anything, Gilder is a romantic. Not only does he despise materialism; he also disdains rationality and calculation. Genius, to him, is to be found in intuitive, irrational leaps; in flashes of insight whose origins cannot be traced; in risks so bold that their outcomes cannot possibly be predicted. Human creativity, he believes, will flourish as long as minds remain open to

chance, intuition, and mystery; it will wither when people imagine that they must proceed by empirical and logical means alone. This is why he holds that socialism is the work of the Devil. "The most dire and fatal hubris for any leader is to cut off his people from providence. from the miraculous prodigality of chance, by substituting a closed system of human planning," he wrote in Wealth and Poverty. But this creed is not just a fancy way of extolling the imagination; Gilder believes, rather, that evading reason allows a person to glimpse mysteries whose existence he otherwise would never suspect. "The mind has access to a higher consciousness, sometimes anomalously, after Jung, called a collective unconscious, sometimes defined as God," he wrote, in the same chapter. "As a person's mind merges with the living consciousness that is the ulterior stuff of the cosmos, he reaches new truths, glimpses the new ideas—the projections of light into the unknown future—by which intellectual progress occurs." This is no mere supposition on Gilder's part: he believes he has experienced that living consciousness directly, through ESP.

Back in the early seventies, when Gilder was working in Cambridge, he came home late one night to the house he shared in Watertown with a group of friends to find that a man with long black hair and "a demonic gleam in his eye" named Billy Delmore had turned up for a visit. Delmore was sitting by himself in the living room, performing what appeared to be magic tricks: finding a particular card in a pack and retrieving objects in the apartment that had been lost. Delmore told Gilder that he, too, could do this, and Gilder found that he could— almost immediately. For about six months, he became preoccupied with ESP, pondering what it was that made it work. It wasn't telepathy, since he wasn't reading anyone's mind: rather, he appeared to be gaining access to knowledge that nobody had, such as where the ace of spades could be found in a newly shuffled pack of cards. It was then that Gilder began to suspect that some sort of knowledge existed outside normal human consciousness—indeed, outside humans altogether—that was attainable if one could temporarily disable the everyday faculties of reason and sensory perception which prevented one from apprehending it. He hypothesized that the type of insight required to gain access to this knowledge was a vestigial faculty from a time in human history before language emerged—usable still if you knew how to make it work.

BEFORE he left New York, Gilder decided to drop in on a group of his subscribers who were meeting for dinner at the Palm, a restaurant on West Fiftieth Street. Subscribers had recently taken to organizing such events in a number of cities around the country, and Gilder sometimes showed up, though he never promised to in advance, for fear of unmanageable crowds. He was spotted right away as he walked in, and the group burst into applause. He shifted awkwardlY through the room, acknowledging the clapping on either side of him with quick grins, looking about for a place to sit. Although surrounded by some of his most loyal followers that night, Gilder was a little nervous. The fact was that in the past few weeks many of his subscribers had lost a lot of money. In the case of a number of his recommendations (Northeast 0ptic Network, Novell, Motorola), the Gilder effect had evaporated almost immediately. Some angry investors had called him a "pump-and-dump artist"; others had threatened to call the S.E.C. And then there had been the Mirror Image fiasco.

A couple of months before, at a conference in Scottsdale, Arizona, Gilder had met a Norwegian named Alexander Vik. Vik was the chairman of a company called Mirror Image, and in the course of a conversation Gilder realized, to his great excitement, that Mirror Image fit his new information-caching paradigm perfectly. Even though he knew very little about the company, he took a risk and, mostly on the basis of that conversation with Vik, in his February letter he wrote a glowing report. The effect was immediate. Not only did Gilder's subscribers, as usual, rush to buy his recommendation, but so many others did as well that, in the next four or five days, the market capitalization of Xcelera, the parent of Mirror Image, increased by at least three billion dollars. Then disaster struck. The Washington Post and the New York Observer both published scathing stories about Mirror Image. Vik was interviewed on CNBC and came off as louche and arrogant; when asked about his failure to file quarterly financial reports, he breezily informed the interviewer that, since his company was headquartered in the Cayman Islands, he didn't have to. Rumors started circulating to the effect that Vik and his partners had sold most of their shares and were getting ready to jump.

It was scary. For a couple of weeks, Gilder thought he might have been taken for a ride, and he braced himself for a dramatic humiliation. Thankfully, he was saved. Ellen Hancock, who is the C.E.O. of Exodus Communications, the world's leading Web-hosting company, read Gilder's letter and sent her technical people to evaluate the company. On the basis of their recommendation, she decided to invest six hundred and thirty-eight million dollars in Mirror Image's technology. Gilder, with enormous relief, perceived that he had been vindicated—intellectually, if not financially. (Mirror Image's stock remained much lower than its Gilder-effect peak.) Still, he was shaken. He had always believed that taking risks in the absence of good information was what capitalism was all about, and if he wasn't willing to go out on a limb for technologies he believed in, who would? But the affair had made him wonder whether, now that he had such an influence on the allocation of capital, he could still responsibly hold to his report's operating assumption that ideas were all that mattered.

The dinner went better than Gilder had hoped. The subscribers could hardly have been more effusive in their expressions of allegiance: one compared him to Copernicus, another to the Holy Grail. One woman, an accountant, told Gilder that she remembered perfectly the day she had first read Wealth and Poverty, back in 1981: she had begun it in the morning, read it on the train to work, read it all through the day, and finished it late that night. Gilder, gratified to find someone who had discovered him as a writer first and a stock-picker second, Iunged toward the woman across the table in order to shake her hand, but he knocked over a glass and retreated in confusion.

It was close to twelve before the subscribers let Gilder leave the restaurant. He emerged into the humid spring night and hailed a taxi to take him back to his hotel. He was pleased by the way things had turned out. In this group, at least, it seemed to him that he had succeeded not only in spreading the word about optics and wireless but in infecting people with his optimism as well. It was all very encouraging. Maybe it didn't even truly matter if he were to be taken for a ride by someone like Alexander Vik. After all, in the long run, he felt sure, the right technology would prevail, because in the long run good will prevail. Keynes may have talked a few people into believing that in the long run we'll all be dead, but that was typical pessimistic secularism speaking. Gilder bumped along in his taxi toward Central Park South and felt renewed hope for the future. Those few subscribers who had lost faith in his report after shortterm losses had never really understood his project anyway, he thought. His eyes were adjusted for distance.

MAY 29, 2000
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Excerpted from The New Gilded Age edited by David Remnick. Copyright © 2000 by Larissa MacFarquhar. Excerpted by permission of Random House. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.