New Part Three - September 19:
James Fallows
Michael Lewis

Part Two - September 4:
James Fallows
Michael Lewis

Part One - August 29:
James Fallows
Michael Lewis

Michael Lewis is the author of several books, including the international bestsellers Liar's Poker and The New New Thing. He has been the American editor of the British weekly The Spectator and a senior editor at The New Republic. Currently a contributing writer for The New York Times Magazine, he lives in Berkeley with his wife, Tabitha Soren, and their daughter, Quinn.

James Fallows is The Atlantic's national correspondent and the author of Breaking the News: How the Media Undermine American Democracy (1996) and of Free Flight: From Airline Hell to a New Age of Travel, published this month. To learn about his new book and look through an archive of his recent articles, visit

Previously in Fallows@large:

The Waste Land (June 21, 2001)
An e-mail exchange with Alex Kerr, author of Dogs and Demons.

Working Classes (May 2, 2001)
An e-mail exchange with Barbara Ehrenreich, author of Nickel and Dimed.

The Work of Words (February 21, 2001)
An e-mail exchange with Christopher Hitchens, author of Unacknowledged Legislation and would-be prosecutor of Henry Kissinger.

More by James Fallows

More on books

More on technology

Join the conversation in Post & Riposte.

Atlantic Unbound | September 19, 2001
fallows@large | Dialogues with James Fallows
From: James Fallows
To: Michael Lewis
Subject: The (next) Age of the Internet - Part Three

Greetings Michael:

We come to the end, and I have a couple of questions that will (gasp!) lead you away from the contents of your book itself. These are designed to let you put on your Savant's Cap and tell us how we should think about the following technology-financial events.

I know that Savantage—not a word, but it should be—is not your natural approach. But on the basis of Liar's Poker, The New New Thing, and Next, you're entitled. Together they form a kind of social history of the last two financial bubbles. And that leads me to the first question:

1) Liar's Poker described the bubble of the late 1980s, now remembered in shorthand as the Junk Bond days. TNNT and Next are about the ups and downs of the Internet-boom era. There are some obvious similarities between the two episodes. Greedy people with good timing got rich. Penny-ante people with worse timing were their victims. Excesses were excessed. The natural forces of gravity eventually set in. The first boom was "democratizing" in certain ways—the uncouth characters who traded bonds became richer than their social betters. The Internet is democratizing in other ways, or so you contend in Next.

There were obvious differences too. The first bubble seemed New York-centric. The second seemed Palo Alto-centric. Technology played only a small role in the first—mainly through adding "derivatives" to the portfolio list. Technology, and the different estimates of its ultimate impact, was the fundamental force behind the second. The lasting impact of the first boom is hard to detect. You argue that the lasting impact of the second is now being underestimated.

And so on. My request to you is: Compare and contrast! You lived inside the first boom and chronicled people at the center of the second one. What are the main useful, or simply interesting, conclusions to draw from the similarities and differences between them?

2) Let's talk about real shifts in power. Historically, a few kinds of technology really have changed the balance of power within and between societies. The combination of agriculture and simple advances in public health may have been the most important of them. Before, perhaps, the Dickensian era, one big advantage the upper classes had over the lower classes was that the people on top were more likely to survive! They had enough food, they didn't get as many diseases, they weren't as likely to freeze to death for lack of coal. Even these days it's obviously still healthier to be on the top of society than the bottom. But at least in America, the reasons for the difference are changing. (You can tell professional-class Americans by how few of them smoke, and how few are fat.) And the absolute gap here is much smaller than it used to be. I don't have the exact statistics, but something like the following is true: at the turn of the twentieth century, the life-expectancy-at-birth for black males in America was about twenty years less than for white males. Now it's three or four years. Similarly, the balance of power between nations has obviously been changed by the invention of the first nuclear weapons. And the seemingly inevitable advent of cheap, deployable "weapons of mass destruction," from portable nukes to little anthrax vials, will change the balance of power again, putting big states more at the mercy of small ones. [I wrote the preceding sentence on September 10, having no idea of the horrifying way in which it would be illustrated the following day.]

Automobiles, by contrast, have socially democratized various cultures without really changing the balance of power. I mean, the car culture of Southern California was part of its loose and easy nature (American Graffiti was basically all about this point). But as you look around the world, I don't think you can argue that cars basically changed the distribution of power—rich versus poor, government versus citizen, superpower versus piddling state. (Maybe you can argue this: be my guest!)

One main point of Next is that the Internet really will change the balance of power—young versus old, outsiders versus insiders, people in out-of-the-way places versus those at the command center. You mentioned in our second round that the idea of deep change spurred by the Internet was something between a literary conceit and a real contention. Could I put you on the spot to ask which it is? Is information technology going to be an interesting new adjunct to how we work and play? Or will it, in an important way, give power to some people and take it away from others?

3) Finally, a question that affects us both: how and when will the Internet work out a way of paying for "content"? The publications that rushed to give their articles away on the Internet are now feeling vaguely like chumps. They thought they were being modern and adding to "mindshare," but in many cases they were simply undercutting their own product. Newsstand sales of magazines in general have been declining for several years: the Internet must have something to do with that. The recording industry has won its battle against Napster, but it seems almost certain to lose the war. When it is technically possible for people to get "content"—software code, textual information, music—legal regulations don't usually stand in their way. Think of how early software companies had to drop their clumsy "copy protection" schemes.

I've assumed all along that the current "content is free" policy on the Internet was just a transition blip. Eventually, people have to be paid to compose songs or write books or develop code. And over the years people have been willing to pay some fee for this "intellectual property." When previous technical waves have threatened to wreck the existing payment model—when the Xerox machine meant students could copy an article rather than buy it, when the first tape recorders meant you could capture music coming over the radio—new payment systems have been worked out. The classic example is that the movie industry makes tons of money from the very VHS industry it once feared.

My question for you is: how, and when, will the current "content is free" anomaly resolve itself on the Internet? The optimistic scenario is that this will happen smoothly and quickly, perhaps through "micro-royalties." The bleak scenario is that there will be an overreaction against Web content of all kinds, as there is now an overreaction against Internet and tech investments in general, and it will take years to reach equilibrium. What's your view?

That's it from this end. Thanks for taking part, and good luck on whatever you write about next.

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