In 1972, Dr John Calhoun set out to build a utopia.
The world he created, in a rural area in Maryland, offered everything you could need or want.
There was plenty of food and water. The apartments were beautiful, there were loads of resources. Disease was non-existent, the weather was good and there were no natural enemies.
It was paradise.
This wasn’t Calhoun’s first stab at it. In fact, it was attempt number 25.
Dubbed Universe 25, Calhoun’s creation was a utopian world…for mice.
Yep, the enclosure he created was designed as an experiment. This was at the time when people had started to move into cities. Calhoun tried to replicate human society as much as possible to study the effects of overcrowding.
He started with eight mice; half male, half female. The population then initially doubled every sixty days.
Family clans appeared, who started to take the best spots in the enclosure.
But while there was enough room for well over 3,800 mice, the population levelled off at 2,200 on day 560.
The last birth happened on day 600…and then the mice went berserk.
As younger mice developed, most of the space had been claimed. They struggled to find a mate or a place in their society.
So, they started showing ‘unusual’ behaviour.
They first became violent. Then they started to withdraw, and lost interest in reproducing.
Females had miscarriages and expelled their young too early from the nest. They moved nests often, sometimes abandoning their offspring mid-move.
And then there were the ‘beautiful ones’. As a video of the experiment described them:
‘Other young mice going into adulthood exhibited an even different type of behaviour. Dr. Calhoun called these individuals the “beautiful ones”. Their time was devoted solely to grooming, eating, and sleeping. They never involved themselves with others, engaged in sex or would they fight. All appeared as a beautiful exhibit of the species with keen alert eyes and a healthy well-kept body.’
The beautiful ones were happy to be alone, and soon lost touch with reality.
In only two years, mouse paradise turned into mouse hell.
The population started to decline until eventually they all died.
Are FAANG’s falling out of favour?
Dr Calhoun coined the term ‘behavioural sinks’ to describe the unusual behaviour that he saw from overcrowding. He thought that humans could suffer a similar fate.
Many at this time took Calhoun’s experiment as proof that overcrowding would exterminate humanity.
But psychologist Jonathan Freedman, who conducted his own experiments with humans, came to a different conclusion.
As the National Institute of Health explained (emphasis mine):
‘The psychologist Jonathan Freedman recruited high school and university students to carry out a series of experiments that measured the effects of density on behavior. He measured their stress, discomfort, aggression, competitiveness and general unpleasantness. When he declared to have found no appreciative negative effects in 1975, the tide began to turn on Calhoun’s utopia[…]
‘Freedman suggested a different conclusion, though. Moral decay resulted “not from density, but from excessive social interaction,” Ramsden explained. “Not all of Calhoun’s rats had gone berserk. Those who managed to control space led relatively normal lives.” Striking the right balance between privacy and community, Freedman argued, would reduce social pathology. It was the unwanted unavoidable social interaction that drove even fairly social creatures mad, he believed. Culture and upbringing also play key roles in adapting to environment, others suggested.’
We are no mice, but decades on this is still an unsettling experiment. Mainly because you would be hard pressed not to see the similarities to our society back then…and even today.
We are living in an overcrowded world. In just the last century, the world’s population grew from 1.65 billion to six billion. And it’s still growing fast, now at 7.7 billion.
We have no natural predators, we are living longer, and we live like we have plenty of resources.
We have never been more connected…and at the same time more socially isolated. In fact, the problem is becoming so large that Britain has already instituted a minister of loneliness.
And, of course, the ‘beautiful ones’ also ring a bell. The rise of social media has meant we spend more time looking at ourselves. According to a study, 90% of people log into Facebook to look at their own profile instead of others.
Technology has brought more interconnection and made our lives easier. But it has also brought in less privacy.
What we are trying to say (in a very roundabout way) is that technology companies like the FAANGs — acronym for Facebook, Amazon, Apple, Netflix and Google — have become very successful because they cater to our nature and needs.
In fact, it is hard to believe how much the FAANG have infiltrated our lives in such a short period.
We order stuff from Amazon. Instead of watching regular TV, we tune into Netflix or Amazon Prime. We have Apple smartphones, and buy apps, music and movies through iTunes.
We use Facebook, WhatsApp and Instagram to communicate.
We use Google all the time to search for…anything. In fact, according to Statcounter, Google has 92.25% of the search share market. The second place goes to Bing, with a mere 2.41%.
I mean, I am guilty of all of this.
Don’t get me wrong, we don’t think that the FAANGs will lead humanity to extinction. But the FAANGs have been so successful they are becoming quasi monopolies.
At the same time, they are falling out of favour. As they infiltrate our lives and our homes, there are more concerns about our privacy, and about getting ‘nudged’ in different directions.
The FAANGs have been driving the markets up in recent years. Now we are hearing that after market turmoil, the FAANGs are cheap, that it is not too late to invest in the FAANGs.
We think they may have peaked.
They are falling out of favour because of privacy. Like Calhoun’s utopia, they’ve overstepped the fine line between community and privacy. There is even talk about the government breaking them up. They are already quite large companies, but we think the tide is turning.
We may not see much of a market rally unless the FAANGs keep growing. But can they? Or will they continue to increase social interaction to the point we become ‘beautiful ones’ who are so removed from society, no one uses them anymore?
So, my question is, would you still invest in the FAANGs?
I would love to know what you think. Send me a note at firstname.lastname@example.org.
Editor, Global Investor
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