Reading Nicholas Lemann’s Transaction Man puts me in mind of the plaintive appeal issued by Rodney King during the Los Angeles riots of 1992: “Can we all just get along?” Lemann, a longtime staff writer for The New Yorker, conducts a tour of American economic history since the start of the 20th century in search of a system that would bring a measure of fairness to a country where income inequality, lack of opportunities for many, and a stagnant, or in some cases falling, standard of living are tearing our social fabric.
A Century in Review
It’s hard to escape the sense that part of Lemann pines for the years following World War II—akin, in financial markets, to the period between the arrival of the pill and the scourge of AIDSwhen sex was safe—after the S.E.C. and other regulatory agencies had clamped down on much of the behavior that led to the economic collapse of 1929. This was long before the geniuses on Wall Street had started trading options, inventing derivative instruments, and peddling junk bonds, or investment firms had concocted mutual funds and index funds, or Charles Schwab had waged war against fixed trading commissions. It was also long before corporate-asset strippers, some of whom, these days, hiding behind the pious and misleading moniker “private equity,” had systematically used mountains of debt to enrich themselves while laying waste to hundreds of companies—denuding communities all across the country.