How intelligence moves to the fringe of the network: an interview with author Michael Lewis

(The idea for "Next: The Future Just Happened" came to Michael Lewis while he was doing research for his book "The New New Thing." Lewis, who also wrote the much-acclaimed "Liar's Poker" about his years on Wall Street, consistently found himself running into people -- particularly young people -- who were using the Internet in ways not always anticipated by experts, or the media. These people became the basis for both this newest book, and TV series, about how the Internet is shaping our society, not always as we hoped it would it. Recently, Lewis talked to us by phone while on the road for his book tour. Here is part one of that conversation:)

Monitor: I wanted to start off talking about one of the quotes in the book that really interested me: "Intelligence always moves to the edges of the network." Can you expand a bit on that, and how you saw it happening in the research that you did for the book and the TV series.

Lewis: Andy Kessler, from whom that comes .. It's an aphorism in Silcon Valley, you hear it now and then. But Kessler was particulary useful, because he was not just a financial person he was a technologist too. He had worked at Bell Labs. I think that that phrase come from his days at Bell Labs.

When technologists say that, they are talking specifically about the consequences of ever faster processing power. They saw in the computer world the center crumble. There used to be great super computers everywhere. Remember Cray. Remember back in the days when people talked about supercomputers and the computer everybody talked about was Cray. In a big room behind bullet proof glass and so forth. Well, you don't hear about that so much any more because the PCs on the fringe have gotten so much faster. They can do so much more than a supercomputer 15 years ago could do. It's a technical metaphor that comes out of the computer industry. But it's a metaphor that I found interesting applied to social situations.

The first instance when it was really clear to me that it applied was in the capital markets. You could see it starting, oh, around the time the Internet went boom, maybe a bit before, the drift of financial people out of the big financial institutions ...

I take that back. When it really started was in the 80s with leverged buyout firms. And since then capital has been gropping toward the fringes in a way it never really has and capitalists have too. This was shocking to me because I came of age financially at the center of things in this big institution, Soloman Brothers, that controled large chunks of the financial markets and where everybody assumed, probably correctly, that the smartest people would work for a place like a Soloman Brothers or Goldman Sachs.

That was only 15 years ago, 1985 when I went to work for them. Since then, that conceit has completely disappeared. Everybody understands, even now and this is what is so interesting, even now, after this choas that has gone on in the stock market, that the action is in private equity of one form or another. And the action is being out there with little guys who are starting things. But outside the big corporations.

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