The fact that the Internet will make life better for all humankind has long been noted, even on the East Coast. What seems to have struck the East Coast only recently is that the Internet is making a smaller subset of all humankind–people who start Internet-related companies or join them before they go public–incredibly wealthy. The New York Times reported as much on its front page recently, so you know it’s probably true.
Out here in cyberland, people have been aware of this fact for several years. Indeed we have talked of little else since about September 1996, which is the last time anyone mentioned a book except in the context of Amazon.com. The basic anecdote–variations on “When I knew him in college he was stoned all the time … two years ago he was living in a corrugated box on his ex-wife’s compost pile (we all actually pitched in to buy him a new futon!) … then last week they had their IPO, and now he’s worth $350 million”–declined long ago from fresh conversational gambit through staple to cliché.
So what’s new? Money has always been a fraught topic. A New York writer who regularly mines his sex life and longings for material begged off an invitation to write about the Internet IPO phenomenon for Slate on the grounds that his feelings about money are too personal and complex. And envy didn’t just become a deadly sin when its existence was acknowledged by the New York Times. Nevertheless, the arrival of Internet Envy on the Washington-New York buzz axis is new in several ways.
Washington types used to be surprisingly immune to envy of other people simply for being richer. A theory long propounded by Walter Shapiro (USA Today political columnist and Slate contributor) is that the financial heights of Washington are occupied by high-salaried lawyers and lobbyists, not by real accumulated or inherited wealth as in New York. The lifestyle gap between the middle and upper class does not yawn in front of, say, a Washington Post editor every day. Journalists–even print journalists!--and high-level civil servants live in the nicest neighborhoods. More important, of course, Washington has–or had–a social status ranking independent of money. It’s a place where puzzled gazillionaires can find themselves snubbed at dinner parties by deputy assistant Cabinet secretaries and patronized by minor TV talking heads.
Even in New York, where money matters more, there are (unlike in Washington) strong independent subcultures in which a journalist or college professor or unemployed actor can take comfort in an independent value system. They could have been bankers or management consultants but chose not to be. And the people at the top of those heaps, earning plenty to live comfortably, honestly wouldn’t trade being, say, curator of dinosaurs at the Museum of Natural History for being just another multimillionaire investment banker. On most days.
So what has changed? One element, obviously, is the size of these Internet fortunes. Hundreds of millions. As syndicated columnist Matt Miller recently pointed out, with numbers like this surging across the Times business section, even investment bankers “feel like wage slaves at $10 million a year.” (And, poor souls, these investment bankers generally cannot find comfort in an independent value system.) Meanwhile, in Washington, where even New York-style fortunes are rare, it seems that America Online alone (located in D.C.’s Virginia suburbs) has created a vast new social stratum of megamillionaires one has never heard of. Gives one pause.
Second, there’s the speed. It’s one thing to console yourself that at least you didn’t have to spend 30 years doing a job you would hate. That trick is a bit harder when you read that someone (inevitably, someone with the same name as that bozo down the hall sophomore year … but it can’t be … look, here’s his picture … oh, hell) joined some nothing of a company, sat there through the IPO, and cashed out, all in a couple of years. How awful can a job be?
Answer: maybe not so awful at all. In fact, maybe it’s remarkably similar to the job you’re doing now. A third startling difference about Internet IPO wealth is that some of it is raining down on journalists! Writing journalists, no less, at places like Amazon and TheStreet and iVillage (dot-com, dot-com, dot-com). This is something truly new in the history of the known universe. Slate’s former “Keeping Tabs” columnist Emily Yoffe observes: “You no longer can say, ‘Sure I could have made a lot of money if I’d decided to be a Wall Street money grubber.’ And it’s not just [a famous TV hack] spending every weekend speaking to the Aluminum Manufacturers for $50,000. We’re talking about journalists getting seriously rich just by being journalists.”
Thus journalists have joined software engineers and business executives in peddling the other basic Internet Envy anecdote: variations on, “Oh yeah, they offered me the top job at Somedamnedsite.com–begged me to take it, offered me 75 percent of the equity plus options for another 75–but I turned it down.” Even during the first few years of Internet frenzy, Internet Envy was not widespread in N.Y.-D.C. buzzworld because the whole thing seemed to be happening on another planet–to people one not only didn’t know but could scarcely imagine. Only very recently have lottery winners started popping up in one’s own neighborhood.
Internet Envy exists in cyberland itself, too, but it is much more straightforward. Everybody is trying to do the same thing; some succeed, and those who don’t are envious. You don’t have to pretend that you’re not. And there’s no queasy feeling that you must have misplaced that notice explaining how the rules were about to change. (“In Paragraph 19, Line 106, replace the words ‘Pulitzer Prize for Nonfiction’ with the words ‘seven hundred fifty million dollars.’ “) Also, unlike back East, there’s no vertiginous obsession with how young these IPO-heads are, because almost everybody is scandalously young.
The rules have indeed changed. But they’re always changing, in a couple of ways. Some changes in personal values are simply part of growing older. Then there are shifts in the values of the general culture.
To oversimplify: In high school the jocks are on top (unless, of course, armed losers storm the cafeteria one day and mow them down). But the smart kids tend to win in adult life. The glow of that happy discovery can last for years, as Nathan Myrhvold explained and simultaneously demonstrated in a recent Slate “Book Club.” These are folks lucky enough to be able to choose their careers and to have a good shot at success at whatever they choose.
At the crucial moment when they make their choices, many of these people honestly believe that money–beyond the cost of upper-middle-class comfort–is not all that important to them, and most of them may turn out to be right. But some are responding to the fleeting hormonal surges of youthful idealism, or to the special status hierarchy of the academic subculture where they temporarily reside. In the most tragic examples, a charismatic professor will entice them into a lifetime of French medieval history, about which their curiosity is exhausted before they get their Ph.D.s. In less extreme cases, they become writers. Then they discover, in their 30s or 40s, that money is important to them after all. This is the moment when reading about some 28-year-old who’s suddenly worth $300 million can have an effect that requires medical attention.
Sometimes this personal process of maturity or decay (take your pick) is reinforced by what’s happening in the culture. Money is never unimportant, but there are moments when it is more important than others. This is one of them. Actually, a graph of the changing value of money in the status market would look a lot like a graph of the Dow Jones industrial average: It rose steadily starting about 1982–the year a star New York Times reporter shocked his journalist colleagues by quitting the Times to become an investment banker–crested and sank briefly in the late 1980s, quickly recovered, and has been hitting new heights ever since. In these days, when even the most softhearted and public-spirited people become venture capitalists, younger readers may find it hard to believe there was ever a time when even an extremely ambitious person, motivated entirely by a desire to do well–rather than to do good, or to do anything in particular–might well decide to be a journalist. But it’s true.
Of course it’s possible that the stock market and the status market have peaked together again. Price-earnings ratios are perilously high in both. A $400 million fortune gets you about as much status as a mere $50 million got you a decade ago. Speculators in status futures are rumored to be pulling out of money and getting into undervalued properties including kindness, musical talent, and short-term memory. The decline of money is also expected to benefit blue chips such as physical beauty, according to some analysts.
So maybe this is the wrong moment to cash in your reputation as a saint–based on two and a half decades spent bathing patients in a South American leprosy clinic–for a job (with 50 percent equity stake) as CEO of Leper.com (soon to be LPRC on the NASDAQ). In this market as in others, timing is everything.