Tuesday, May 20, 2014

Plato at the Googleplex - Michael Lewis on Wall Street


A Prose Cocktail

The combination of PLATO AT THE GOOGLEPLEX by Rebecca Goldstein and Michael Lewis’ FLASH BOYS is a disturbing cocktail, one I haven’t been able to stop thinking about, especially since every time I turn around I see another connection.  I bought the Goldstein book because the reviews made it irresistible.  The book follows the delightful conceit that Plato is on a book tour for his most recent work, THE REPUBLIC, and in the course of the tour does interviews with techies at Google, a tiger mom, a cable news host (read:  Bill O’Reilly) and a brain scientist.  When I started the book poolside in Belize, I was mostly looking forward to Plato’s evisceration of O’Reilly; instead, I got a delightful review of Platonic thought, the history of philosophy, Greek myth, and modern science in one.  But more than that, I was reminded of the key philosophical questions that drew me to philosophy in the first place.  As an added bonus, the book is clearly a playful, but nonetheless stern, rebuke to modern day pundits and politicians of all persuasions.

There are all kinds of great questions:  Why is there something rather than nothing (ontological)?  Is it better to live a short life full of significance, or a long life undistinguished (Achilles, not to mention Pippin)?  How does one live a life that matters (teleological)?  They are all fun to debate in the campus coffee shop  at all hours of the night and morning. 

But I want to talk mostly about laws and justice here.  Plato proposes a fascinating thought experiment.  Imagine you had in your possession a ring that would render you invisible whenever you wore it, reminiscent of Perseus’ helmet in CLASH OF THE TITANS (“I’m invisible.  Can’t you see that.”).  When invisible you could do anything you felt like with no fear of getting caught, no fear of retribution.  You could walk into a house and take whatever you wanted.  You could rifle money out of cash drawers.  Lurk around girls’ or boys’ locker rooms.  Steal cars.  Take free rides on airplanes.  Anything.  Would you take advantage of that situation?  Regardless of your answer, what percentage of the rest of us would?  Most everyone would answer, “Of course not.  Of course I wouldn’t take advantage.”  But do you think that’s an honest response?  If you had the ring long enough, wouldn’t you be tempted to use it for little stuff?  You’re short of cash and you’ve left your bank card at home.  Wouldn’t you slip on the ring and score that Twinkie, or that $100,000 bar?  Who’s it gonna hurt?  And wouldn’t that make the next transgression a little easier?  I mean, that’d just be human, right?

Plato goes off from that experiment to suggest that at the extreme end of the range of human desires lies the ring.  If heaven or hell were not hanging over our heads, we would all ultimately agree that being able to do anything we would like to do and get away with it would be ideal.  Of course, we would also agree that the worse that could happen to us is if someone else who was getting away with everything did anything to hurt us.  The space between those two conflicting desires is the realm of law and justice.  Since we have no choice but to live in a community (Plato thought that anyone who lived outside of society was by definition either a god or a monster), we have to cooperate to survive.  We have to have a social contract.  And to do that we would have consider questions like “What is the good life?” “What makes life matter?”

Even more than that, the good of the polis, the city-state, outweighs the good of the individual.  Anything else equals chaos.  Sparta honored collective glory.  Individual glory—a life that matters—was secondary to the glory of the state.  Athens gloried in the individual, but a life that mattered for the individual was still one that furthered the state.  The braid of beauty, truth, and goodness held this magical society together.  The pursuit of any part of this trilogy was the purest endeavor and one that could not help but further the good of the state.  All politicians in Plato’s utopia would be the poorest people in the state and forbade extravagance so as to guard against the inevitable corruption that comes from the combination of power and wealth.

In the ultimately unsatisfying chapter where Plato is interviewed by the Bill O’Reilly character (It is unsatisfying because you finally see that it is not possible to win an argument with a prating knave.), Plato asks Roy McCoy if he would rather refute someone, or be refuted?  Would he rather hurt another, or himself be hurt?  McCoy treats it like a trick question.  Of course, he would rather refute, would rather hurt than be hurt.  What kind of idiot wouldn’t?  Plato is just that kind of idiot.  He is the kind of idiot any polis needs to hold it together.  The USA of the first part of the twenty-first century is in short supply of such idiots and if we had them they would just queue up to be demolished by the pundits, the cable news hosts, the bought and paid for politicians.

That’s why PLATO AT THE GOOGLEPLEX fits in so nicely with FLASH BOYS.  The Plato book shows us how to make a better polis.  Michael Lewis’ book shows us why that is a pipe dream.  We all know the story.  Wall Street types, whose only motivation is to make increasing amounts of money, discovered that they could game the system by simply placing their orders faster than anyone else.  If a person could find a price fluctuation between the futures market in Chicago and the exchange on Wall Street, he could make a lot of money by placing a virtually instant order to buy or sell. 

That is an epic over-simplification, but suffice it to say that all that technical wheeling and dealing aside, FLASH BOYS is a book about unbridled greed and our culture’s tacit acceptance of that fact.  

Folks just made a whole shit load of money by jumping the market and in the process screwing the little guys, the guys who lost value in their retirement, the mutual funds who were naive enough to play by the rules.  When the book’s hero, the guy who spearheads the push to figure out the scam, tries to establish a fair stock market that wasn’t based on bilking the common man, he went to the big banks to get them to participate.  At first, when asked why he was doing this, why he was giving up a big money job to make the market fair again, he simply told them that he wanted to do the right thing.  That response was greeted by such genuine bewilderment that he didn’t raise a dime.  When he changed his story and rigged some numbers to suggest that he would make an eventual killing on the deal, the investors lined up at his door.

After I finished the book, I looked up a number of negative reviews to find out what all those Michael Lewis haters were saying.  Not much.  The main thing I took away from the reviews was that Lewis was ignoring the fact that HFT (high frequency trading) created liquidity, put more money into the economy, and of course (prepare to genuflect) created jobs.  None of those reviewers seemed bothered by the amoral pursuit of money and the shameless disregard of others that seems to control our economy.  Bill O’Reilly and the folks at FoxNews would call that democracy.  Plato, not knowing what to call it, would simply weep.