There was a time when the list of the world’s largest companies read like an inventory of things, oil, steel, automobiles, commodities that weighed, rusted, and occasionally exploded, but whose utility any child could understand without the aid of an analyst. Today’s list reads like a prophecy. The top spot belongs to Nvidia, valued at around 4.7 trillion dollars, followed by Apple, Alphabet, Microsoft, and Amazon, and whoever reads down to the tenth name discovers that nearly 40 percent of the entire value of the S&P 500 rests on ten variations of the exact same wager. Diversification, a word consultants pronounce with the solemnity of someone prescribing vegetables, has come to mean owning ten companies dreaming the same dream and sleepwalking toward the same abyss. Almost half of the retirement savings of the Ohio firefighter and the Haifa schoolteacher depend, without either having been consulted, on half a dozen boards of directors getting the future right.

We have seen this movie before, and it was in black and white. In 1929 the darling of the stock market was RCA, the radio company, the technology that was going to change everything, and which in fact did, transforming politics, war, and the solitude of kitchens without any of it sparing its shareholders from ruin. The stock lost 98 percent of its value, the Dow Jones index took twenty five years to revisit its own record, one in four Americans was left jobless, and the shockwave crossed the Atlantic and reached Berlin just in time to help shape the twentieth century. Days before the disaster, Irving Fisher, the most respected economist in America, assured the public, from the heights of his Yale professorship, that prices had reached a permanently high plateau. The phrase survived. His reputation did not.

After 1929 America learned. It created the SEC and separated the banks from the casinos, writing the new rules while the blood was still fresh. The lesson lasted exactly as long as collective memory does. In the nineties the grandchildren of that catastrophe, convinced that financial engineering........

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