- Shopping Bag ( 0 items )
A proper romance ought to pit youth against age, innocence against worldliness, and show the triumph of love over all temptation. We begin, then, with some disadvantages. Our hero is in his forties. He scorns idealism as naivete. And his domestic life has a distinctly argumentative cast. Nonetheless, this book is called a romance, and I think it is accurately named.
A romance should at least have a hint of the supernatural. Here we are more lucky. Fauns and angels are not permissible in journalism, but there are other forces in the world that hauntingly express themselves through individuals. Original ideas often appear unexpectedly in several places at once; like ghosts, they are in the air. Once such ideas begin to spread, they can have an uncanny, almost demonic effect, causing otherwise rational people to act strangely. The story that follows is a romance in exactly this sense: it traces the effect of a fantastic idea–the idea that computers will make every existing authority obsolete–as it worked through and upon the man who conjured it up.
Thirty years ago a young man was featured on the cover of The New York Times Magazine. He was a pioneer of a new political movement called libertarianism. The goal of the libertarians was to abolish the government, but they did not succeed, and the young man left the United States and resettled in Europe for two decades. When he returned he upended the media business, captured the attention of millions, and seduced some of the country's most powerful financiers. He even spoke, again, of the end of government.
He was no longer a libertarian, because libertarianism was a political label,and he had become an enemy of politics. The transformation he advocated was more profound than that. He spoke of a new social life unimpeded by national borders; of communities transcending time and geography. His message was, in part, about technology, and the financial mania it precipitated resembled other incidents of hysteria that came in the wake of important inventions–railroads, automobiles, electricity, radio. But he was not an inventor, nor even a very great businessman. He was simply a talented storyteller who offered a glimpse of a future in which all outmoded constraints would be swept aside.
His success coincided with a great stock-market bubble. How much was he to blame for it? When economic historians sort out the confusion of the last ten years, they will doubtless give some of the responsibility to administrators of the central bank who lowered interest rates at a key moment, flooding the market with cheap money that quickly found its way into stocks. But the supply of money is only one side of the story. The other side is demand. In the optimism of the bubble years, enthusiasm for the story of the digital revolution made huge speculative investments seem reasonable; this in itself caused credit to loosen.
An interesting illustration of the duel engines that fuel financial bubbles–loose credit and enthusiasm for a good story–can be found in the temporary success of John Law, an economist and gambler who launched the first modern bubble in the early
eighteenth century. Under sponsorship of the French court, Law formed a bank that issued paper money backed by significant specie reserves. He increased confidence and credit began to flow. But that was not all he did. Law also took control of a company with monopoly rights to settlement and trade in the Louisiana territories, and sold several waves of shares to the public. After some manipulation of currency supplies by the court and Law's bank, shares in the Mississippi Company took off. With an initial value of five hundred, Mississippi shares eventually doubled, and then ran up to ten thousand in a frenzy of speculation. In the dŽnouement, all were ruined.
Why did investors clamor to buy shares in the Mississippi Company at so many times their offering price? The wealth of the Americas was the perfect speculator's tale. It was rumored to be infinite, and it was impossible to investigate firsthand. Before the fever broke, every segment of society was infected, and after it broke, every participant suffered.
At the end it no longer mattered that America contained every natural advantage for farmers, traders, and well-capitalized chartered monopolies. A bubble, while dependent upon its story, renders the story's truth irrelevant. This is because, paradoxically, a bubble feeds upon skepticism. Today's skeptics are tomorrow's buyers. People who decline to purchase shares at five hundred, who laugh at them at a thousand, and revile them at fifteen hundred eagerly snatch them up at two thousand when the spectacle of friends and neighbors celebrating their profits becomes too much to bear. As the bubble grows, the story becomes more and more popular, for it is the buyer's indispensable justification and excuse. Only when the story's truth is more or less universally acknowledged do prices plateau and then plummet. Skepticism, a key ingredient, has run out.
The romance that follows is not a full account of the mania that enlivened the late nineties and brought so many unlikely characters to the fore. It is merely the story of its story. Instant communication and ubiquitous computers were on the verge of creating unprecedented wealth and freedom; humanity was at the dawn of a new era. This story had, if no sole author, at least a preeminent champion. His name was Louis Rossetto, and his platform was Wired.
CHAPTER 1: FROM NOWHERE
Louis Rossetto had a strange effect on people. He was like a magnet whose grip increased dramatically at close range. Listeners might be dismissive at a distance, and dubious as he opened his mouth, but then he pulled them in and held them close. He always seemed to be better informed than anybody else in the room. He had sources from Afghanistan and contacts in Sri Lanka. He knew Dutch, Italian, and Portuguese. Because he was so coherent, and because when he had made his point he fell silent and waited calmly for a response, Louis had a peculiar way of compelling his acquaintances to express agreement with things that they were not really sure of. This could be embarrassing later and sometimes even made people swing the other way and say they hated him.
John Plunkett was unnerved the first time he got a glimpse of Louis through the window of an elegant office building on the Quai d'Anjou, in Paris. John was a big man with a deceptively placid expression. Normally he worked as a graphic designer in New York City making annual reports for big corporations. ÒSelling shit on a stick,Ó he called it. But at the moment John was short on money and looking for a job. He had seen an ad for a designer in the International Herald Tribune, and after scheduling an interview he decided to walk by the office and have a look. Truck traffic paused in front of the building, obscuring his view, so he crossed the street and peered between the drapes. He saw a tiny computer sitting on a desk, with an orange screen and black letters too small for him to make out. In front of the screen a tall man sat completely still, his face expressionless. He looked like some kind of hippie or derelict, out of place behind these old stone walls and six-paned windows. The man suddenly turned toward the street and stared. Something about his unblinking expression, its lack of acknowledgment or human recognition, startled the designer, and he fled. Later John would interpret this encounter as a premonition, but light fades early in Paris in the fall and perhaps Louis Rossetto's gaze registered nothing because he only saw his own face in the window, reflecting back.
Designers are never implicated, John told himself, after he took the job with Real Invest. Real Invest was a discreet financial operation that offered individual banking services and untraceable European investments for Americans who preferred to keep their capital gains out of the hands of the Internal Revenue Service. Bill Sigal, the owner, would eventually flee Paris one step ahead of the police. John found Sigal to be a slightly threatening person, self-assured and ruthless in his extraction of cash investments from midwestern rubes (whom he called, as a sort of shorthand, ÒdentistsÓ), but Plunkett's job was only to redesign the company's newsletter, called Globescan, and he took no more responsibility for the malodorous quality of the Sigal enterprise than he did for the assertions made to stockholders of his corporate clients.
Later John would describe Real Invest as a lure for expatriate bums looking for an angle.On the other hand, were they really bums? The man who had startled him at the window may have been a drifter and an odd duck, a character from another time and a kind of political exile, but he was only a bum if the word conjured meanings beyond mere vagrancy: boisterous anarchism, say, and hatred of authority, and a love of mayhem as a source of both entertainment and sustenance. Add these antiquated associations into the mix, and you still wouldn't have it right, because the old type of bum–the Wobbly, the hobo, the one-big-union man–was an enemy of capitalism, while Louis Rossetto had a master's degree in business administration from Columbia University, where he specialized in marketing and finance. He was an amateur scholar of the Haymarket riots and a deep reader of libertarian economics. Many years after their first meeting, when their partnership had brought John both international acclaim and a deep sense of personal grievance, he would remember his conversations with Louis as the most interesting he had ever had in his life.