Digitalization of the Market

In “The Damning Mark of False Prosperities’: The Deindustrialization of Detroit,” Thomas J. Sugrue describes the post-industrial service economy. He notes that, between the 1950’s and 1970’s, the advent of automated machinery began replacing manual workers in an effort to produce high volumes of products on an assembly line at the lowest possible price (Sugrue, 136). Lewis portrays the automation of the stock market in the 2000’s in a similar manner.

The floor of the NYSE circa 1980

When most people think of the stock market, they imagine Wall Street and the floor of the New York Stock Exchange as it was in the 1990's: hundreds of people wearing colored blazers, frantically hollering and waving their hands to signal the buying and selling stocks. However, according to Lewis, this view of the market is long outdated. Today, the "floor" of the NYSE is quite different. In fact, it is not even a floor, but instead a massive computer located in Northern New Jersey. Further, no longer is the price of a stock determined by a group sweaty traders on Wall Street. Everything is now done in privacy because it is automated within the information society. This automation saw HFT firms born and lies at the core of Lewis’ thesis, that these firms leveraged increased computer speeds to rig the market. (Suggestion: In his thesis, Lewis credits the rise of HFT firms to automation because it allowed them to rig the market by leveraging increased computer speeds.)