Lewis, he says, shows how computer technology and the ability it gives traders to exploit price differences that exist only for microseconds have made the traditional picture of financial markets laughable.
We want a market to be people buying and selling to and from each other, in a specific physical location, ideally with visible prices. In this new market, the principal actors are not human beings, but algorithms; the real action happens inside computers at the exchanges, and the old market is now nothing more than a stage set whose main function is to be a backdrop for news stories about the stock market. As for the prices, they move when you try to act on them, and anyway, as Lewis says, there’s the problem of the ‘dark pools’, which are in effect private stock markets, owned for the most part by big investment banks, whose entire function is to execute trades out of sight of the wider public: nobody knows who’s buying, nobody knows who’s selling, and nobody knows the prices paid.As so often, it seems that those who defend "the market" are, in reality, defending the exercise of naked corporate power.
Lanchester waxes lyrical on the waste it all represents:
After finishing Flash Boys, I found it hard not to think about those missing oceanographers, the computer geniuses and engineers and physicists and entrepreneurs, all those brilliant minds, all that passion and energy disappearing into the black hole of money, lost to all the more productive and interesting things that we humans can do. It’s hard not to feel a sense of loss when you think of what these people would have done, if they hadn’t been sucked into the enterprise of making money out of money. If we ever get enough distance to look back with some sense of perspective on the delirium of modern finance, I think this is what will stand out clearly: that sense of human and intellectual waste.