Michael Lewis has become the great teller of modern morality tales around money: from the story of how high finance bubbled up, then popped, in Ireland and Iceland to the story of how a handful of eccentric thinkers saw a mortgage crisis brewing before it took down the world economy in 2007 and 2008.
In his latest book, Flash Boys: A Wall Street Revolt, Lewis sounds worried. After that last great crash, finance has gone digital. The action has moved off the downtown trading floors and into black-box servers stationed in New Jersey. Wall Street’s work has become so automatic, algorithmic and obscure that ordinary buyers and sellers have less understanding than ever of what’s happening with their savings.
In Flash Boys Michael Lewis focused on the practice of ‘high-frequency trading’ — a game of arbitrage conducted in the course of microseconds, well handled on Radiolab. But in a new afterword he says HFT is just a symptom of a larger problem. The market’s big players have once again abdicated their “clear responsibility to protect investors… and to create a fair marketplace,” meaning that the game may be more dangerous than ever.
So we’re asking the $64,000 question: can we build a more crash-proof, less leveraged, more equitable financial system? Our guest Jeremy Allaire would argue that the technology known as Bitcoin can do just that: bring back transparency and a simple standard of honest exchange. But we’re reminded that the American dream runs on credit — and we may just be too dependent on the boom-and-bust market we’ve made.
Life Under The Cheese-Grater
London — ever more a 21st-century financial capital — is undergoing the building boom. Our guest John Lanchester — novelist-journalist who’s become an obsessive wrestler of big-money topics — can see those buildings from his study window, and he’s (ever so slightly) flustered.
Lanchester says the meaning of those enormous buildings — nicknamed the Gherkin, the Spire, the Walkie-Talkie, the Cheese Grater — comes from their being built without a context, comically dwarfing the Tower Bridge and what’s left of that Dickensian skyline.
Hear our whole conversation with John Lanchester below, and — even more — buy his high-spirited book on How to Speak Money:
The Not-So-Mighty Dollar
On Medium you can read a piece asking what Bitcoin technology might actually accomplish by our newest producer, Pat Tomaino:
Here’s what I learned. Whether you see Bitcoin as a solution depends on who you are and how you define the problem. While the debate continues, here’s a rough scorecard on Bitcoin, what it can do, and for whom.
And there’s a longer piece by Max Larkin about Berkshares, a small but resilient local currency used in Berkshire County, Mass.:
One thinks of a few Berkshire towns — like North Adams, out of Berkshare buying range — as monuments to the power of modern capital: how it all but literally floats in and floats out of a place. Like a kind of slow-motion weather event, money has whipped into Detroit, and Haverhill, Mass., and Gary, Ind. — building up their physical plant and infrastructure so long as that promoted profit — then whipped out and away, leaving something skeletal and defunct behind it.
This is, by the terms of the market, a morally neutral phenomenon. Monopoly capitalism of this kind is indeed like weather, in that one accomplishes nothing by complaining about it.