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THE OPINION PAGES | OP-ED COLUMNIST | NYT NOW
The Moral Power of Curiosity
APRIL 10, 2014
David Brooks
Most of us have at one time or another felt ourselves in the grip of the
explanatory drive. You’re confronted by some puzzle, confusion or
mystery. Your inability to come up with an answer gnaws at you. You’re
up at night, turning the problem over in your mind. Then, suddenly:
clarity. The pieces click into place. There’s a jolt of pure satisfaction.
We’re all familiar with this drive, but I wasn’t really conscious of
the moral force of this longing until I read Michael Lewis’s book, “Flash
Boys.”
As you’re probably aware, this book is about how a small number
of Wall Street-types figured out that the stock markets were rigged by
high-frequency traders who used complex technologies to give
themselves a head start on everybody else. It’s nominally a book about
finance, but it’s really a morality tale. The core question Lewis forces us
to ask is: Why did some people do the right thing while most of their
peers did not?
The answer, I think, is that most people on Wall Street are
primarily motivated to make money, but a few people are primarily
motivated by an intense desire to figure stuff out.
If you are primarily motivated to make money, you just need to get
as much information as you need to do your job. You don’t have time for
deep dives into abstract matters. You certainly don’t want to let people
know how confused you are by something, or how shallow your
knowledge is in certain areas. You want to project an image of mastery
and omniscience.
On Wall Street, as in some other areas of the modern economy that
I could mention, this attitude leads to a culture of knowingness. People
learn to bluff their way through, day to day. Executives don’t really
understand the complex things going on in their own companies.
Traders don’t understand how their technological tools really work.
Programmers may know their little piece of code, but they don’t have a
broader knowledge of what their work is being used for.
These people are content to possess information, but they don’t
seek knowledge. Information is what you need to make money short
term. Knowledge is the deeper understanding of how things work. It’s
obtained only by long and inefficient study. It’s gained by those who set
aside the profit motive and instead possess an intrinsic desire just to
know.
The heroes of Lewis’s book have this intrinsic desire. The central
figure, Brad Katsuyama, observes that the markets are not working the
way they are supposed to. Like thousands of others, he observes that
funny things are happening on his screen when he places a trading
order. But, unlike those others, this puzzling discrepancy between how
things are and how things are supposed to be gnaws at him. He just has
to understand what’s going on.
He conducts a long, arduous research project to go beneath the
technology and figure things out. At one point he and his superiors at
the Royal Bank of Canada conduct a series of trades not to make money
but just to test theories.
Another character, Ronan Ryan, taught himself how electronic
signals move through the telecommunications system. A third, John
Schwall, is an obsessive who buried himself in the library so he could
understand the history of a particular form of stock-rigging called
front-running.
These people eventually figure out what was happening in the
market. They acquire knowledge both of how the markets are actually
working and of how they are supposed to work. They become indignant
about the discrepancy.
They could have used their knowledge to participate in the very
market-rigging they were observing. But remember, the pleasure they
derived from satisfying their curiosity surpassed the pleasure they
derived from making money. So some of them ended up creating a
separate stock exchange that could not be rigged in this way.
One lesson of this tale is that capitalism doesn’t really work when it
relies on the profit motive alone. If everybody is just chasing material
self-interest, the invisible hand won’t lead to well-functioning markets.
It will just lead to arrangements in which market insiders take
advantage of everybody else. Capitalism requires the full range of
motivation, including the intrinsic drive for knowledge and fairness.
Second, you can’t tame the desire for money with sermons. You can
only counteract greed with some superior love, like the love of
knowledge.
Third, if market-rigging is defeated, it won’t be by government
regulators. It will be through a market innovation in which a good
exchange replaces bad exchanges, designed by those who
fundamentally understood the old system.
And here’s a phenomenon often true in innovation stories: The
people who go to work pursuing knowledge, or because they
intrinsically love writing code, sometimes end up making more money
than the people who go to work pursuing money as their main purpose.
A version of this op-ed appears in print on April 11, 2014, on page A27 of the New York edition
with the headline: The Moral Power of Curiosity.
© 2014 The New York Times Company

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