Wall Street warriors

Michael Lewis, known for his insightful books on the culture and moral ecology of Wall Street, does something unusual in his new Wall Street chronicle, The Flash Boys: traces the emergence of ethics and fairness in an otherwise corrupt culture of high frequency trading.

The central figure of the book is Brad Katsuyama, who observes that the market does not work fairly for everybody as they are supposed to. Many traders have made this observation but have played along with the discrepancies primarily because their goal is to make money; what is fuzzy and is incidental to the task of making money is mostly left alone by Wall Street folks.

But Katsuyama and his ilk wear separate stripes; as Wall Street insiders they are not simply in it for the immediate financial gratification. They would like to know the big idea on which the trading culture fundamentally rests.

The big idea isn't, however, as Katsuyama finds, not an idea enshrined in the principles of fairness or justice. In his quest for the knowledge of Wall Street's underpinning, Katsuyama is joined by Ronan Ryan, a specialist in studying how electronic signals are transmitted in telecommunications, and John Schwall, who buries himself in the library obsessed with finding out the modalities of a specific kind of stock-rigging called "front running."

The trio, through pooling their interdisciplinary skills and interests, discovered that the market is severely rigged. But unlike those who would keep this knowledge a secret so as to profit from it, the three men decided to set up an alternative stock market that was immune to the kind of rigging the real stock market is vulnerable to.

What sets Katsuyama, Ryan and Schwall apart from the usual trader is their pursuit of knowledge over the acquisition of mere information; the pleasure of satisfying their curiosity triumphed the pleasure of making money. 

The fabulous thing about Capitalism, as argued by David Brooks, is that it rewards in the long run, those who pursue knowledge, or the "skull beneath the skin," as it were, over those who only would be contented to scratch the skin for whatever money they can make in the short run.

There is a moral power in which the kernel of Capitalism and the market is wrapped up, says Brooks, and those who catch on to the moral power are those who are the true champions of Capitalism.