Net Returns

It was on September 20, 2000, that the U.S. Securities and Exchange Commission settled its historic case against Jonathan Lebed, 15-year-old chat-room stock picker and the only child ever charged with manipulating the market.

For connoisseurs of financial journalism, however, the relevant date is February 25, 2001, when Michael Lewis, former investment banker and author of Liar's Poker, The New New Thing, and other books on the culture of business and money, published his brilliant and weirdly heartwarming account of the Lebed affair in The New York Times Magazine. As a portrait of the sullen, likable Lebed and the people around him—his sullen, likable high school chums, his quaintly dysfunctional family, his humorless nemeses at the SEC—Lewis's piece buzzed with an almost Dickensian liveliness and hilarity. But the real coup was the way the article took Lebed's more or less outrageous self-defense—"If it wasn't for everybody manipulating the market," he claimed, "there wouldn't be a stock market at all"—and calmly, convincingly explained that it was more or less the truth. Lewis, a writer of many gifts, here put to excellent use one of his strongest: a knack for making the most withering skepticism about economic affairs feel like the simplest common sense.

It's a little odd, therefore, to find the Lebed profile resurfacing now as Chapter One of Lewis's Next: The Future Just Happened, an energetic pastiche of reportage and off-the-cuff social theory that aims to undo the skepticism lately de rigueur when talking about that once torrid economic affair known as the Internet. The NASDAQ has swan-dived, the tanks have rolled in on Napster's Prague Spring, and a generation of best-selling new-economy revolutionaries has gone into hiding. Yet for Lewis, it turns out, the lesson of Jonathan Lebed's story is that the revolution has only just begun. If the Internet has given teenage Wall Street wannabes the same market-moving reach as CNNfn talking heads, after all, who's to say how many other traditional power relationships it stands to upend? Dropping in on a half-dozen or so geekish lives and enterprises over the course of the book, Lewis finds evidence of Net-driven social upheaval everywhere: amateurs beating professionals at their own game, consumers wrestling control from producers, parents looking to their children to guide them through a technologically baffling world.

Lewis is right, of course, that the Internet's failure as a stock market play hardly renders it a failure as an agent of change. And in principle his resistance to the culture's current disillusionment with the Net is just what the moment calls for. Unfortunately, though, the dust of a decade's worth of hype still clings to most discussions about the Net, and Lewis's is no exception. No matter how many ways he restates his central thesis, it comes out smelling just a little like a pile of vintage Wired magazines: The Internet undermines authority. The Internet breaks down the barriers between insiders and outsiders. The Internet turns pyramid-shaped social hierarchies into pancake-shaped social networks. The Internet lets people try on new selves. This sort of manifesto-speak sounded a lot more convincing the first time around, back when the Net wasn't much more than a platonic dream of the complex, worldly reality it has become.

The good news is that Lewis's curiosity is too acute, finally, for him to ignore that reality for long. At their sharpest, his dispatches bristle with keenly knowing observations tossed off like firecrackers from a passing car. His deft dissection of a famously overhyped Wired essay by middle-aging software wunderkind Bill Joy, for example, becomes a sort of meditation on the ways the fast-evolving Net enshrines the flexibility of youth to the cruel exclusion even of its own elite, who must either surrender their privileged status as they grow older or will themselves to stop growing altogether. Lewis doesn't miss the irony: "The Internet allows a person to paint a picture of himself the world will value. But it has also helped to paint a picture of what the world values in a person. The effect is no less grotesque than one of those Spanish royal portraits in which the artist, needing to buttress the authority of some child monarch, renders his subject as a tiny adult."

Smartest of all, though, are Lewis's remarks on the mind-set of the people who created the software application Gnutella, a nonproprietary, decentralized, and, in theory, lawsuit-proof alternative to Napster. Strangely, Lewis leaves unclear how familiar he is with the techno-anarchist Open Source, or Free Software, movement that is Gnutella's intellectual wellspring, but he is more penetrating than most Open Sourcers in his grasp of the ambiguous relationship between the anticorporate programmer and the Man: "The incentive for the outsider [is] to attack the inside right up to the moment he [is] co-opted by it. The incentive for the insider . . . [is] to allow yourself to be attacked, and then co-opt your most ferocious attackers, and their best ideas." This is in one sense a profoundly cynical write-off of the hope, nurtured by some, that Free Software might stand as a genuine alternative to post-Cold War capitalism. But Lewis doesn't let the Man off the hook either. "In the hands of outsiders," he admonishes, "the Internet [is] being used to tell you something both simple and important: Your economic system is not something to be smug about. Just because it won an ideological war does not mean it is perfect, or even good. . . . There are still a few people who insist on finding new ways to fight it. They sound as naïve as children; often they are children. But that doesn't mean they are wrong, or that they won't, in some sense, win."

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