We are living through one of those "ages of radical change". What is less obvious is why all this change is suddenly upon us. Why is it that the securities business in the late Nineties finds itself besieged by techno-geeks? Why, more generally, did the real financial action move from Wall Street in the Eighties to Silicon Valley in the Nineties?
At least part of the answer can be found on Wall Street in the Eighties. In several ways, the securities industry created the monster that will one day destroy it. The first and most obvious thing done by Wall Street in the Eighties was to introduce new ideas about capital.
Michael Milken's creation of the junk bond market is - from a distance of 20 years - an even bigger deal than it seemed to be at the time. It's a shame that Milken himself has been forced to pretend he is ashamed of his work: it would be interesting to hear him talk about it.
The junk bond market not only made it possible for people to obtain capital who would previously never have been funded; it proved that a lot of these people - Ted Turner, Rupert Murdoch etc, etc - were worthy of the capital.
The junk bond market helped to destroy a lot of old superstitions - which is why it made people so angry. Specifically, it disproved the old banking saw that the only person worthy of a loan was the one who didn't need it. In doing this it created the financial precondition for the age of radical change: new people with new money-making ideas could get their hands on the capital they needed to turn the ideas into businesses.
The second broad contribution made by Eighties Wall Street to Nineties Silicon Valley was a new individualism. Once a little guy can get his hands on big capital, he acquires a new kind of power, and new sense of possibility.
The hostile and semi-hostile takeovers of our most recent financial epoch were both causes and effects of the new individualism. For instance, by the early Eighties, Exxon had guessed right about the coming future of digital technology. It had created, or funded, all sorts of little businesses in the field, and these included potential internet businesses.
Exxon might well have wound up, however weirdly, making a lot of money from the Internet boom.
But then T Boone Pickens, using money provided to him by Milken, staged his hostile raid on Exxon, and Exxon was forced to retrench. Like a lot of other big companies that lived in fear of Wall Street, Exxon ditched any investments that might be viewed as superfluous.
This is one small example of a larger phenomenon that was created by Wall Street. Big companies were forced to be less aggressive with research and development dollars. This created new room for little companies.
The last little contribution made by Eighties Wall Street to the Nineties' boom was to ratchet up young people's expectations. Another new idea was born: that it was right and proper for a 28-year-old to make a million dollars a year.
The rope that had tethered ambition to tradition had been severed.
Before long a lot of 28-year-olds were actually pissed off that they hadn't made a million dollars a year. Once the process was under way it took on a life of its own. One million dollars became five million; five million became fifty million dollars.
The number keeps growing. It plays the role of the mechanical rabbit at the dog track - goading young people with the energy and inclination to start new things, to start big, new things.
Huge financial ambition was once exceptional; now it is normal. Would it have occurred to Jeff Bezos to create Amazon.com if it had not first occurred to him - while he worked on Wall Street - that there was nothing absurd in trying to make $100 million for himself?
Michael Lewis, the author of `Liar's Poker' and `The
Money Culture', is a columnist for Bloomberg News. His opinions do not necessarily represent those of Bloomberg News