Wealth Valley

By JOSHUA QUITTNER

Forget Wall Street. More than 75 years ago, a Stanford University economist named Thorstein Veblen predicted that one day, engineers would be the true masters of the financial universe. It's technology that drives the economy, he argued, and since engineers create the stuff, it'll only be a matter of time before they come to their senses, seize power and undercut the venture capitalists and corporate bigwigs who make so much dough from other people's brilliant ideas. Veblen was right, it turns out. And though they never met, the man who would lead the revolution was a more recent Stanford professor, peripatetic Jim Clark.

Clark went on to found Silicon Graphics, Netscape and Healtheon, creating three multibillion-dollar companies. (So far.) I learned about Veblen--and loads about Clark--in Michael Lewis' new book, The New New Thing: A Silicon Valley Story (Norton; $25.95). It's a superb book and explains how engineers are the greatest creators of wealth in history and why Silicon Valley is the center of the universe (and how Clark came to be the center of the Valley). I tend to dislike most nonfiction, since so many writers approach their work as if they were doing the reader a favor--"Sit down and read this unreadably dull book because it's good for you." Not Lewis, who makes Silicon Valley as thrilling and intelligible as he made Wall Street in his best-selling Liar's Poker.

Clark is the perfect Silicon Valley Man, though he was born "somewhere below the poverty line" in Plainview, Texas. His father abandoned the family when he was a child, and his mother should have been on welfare, but it "never occurred to her," Lewis writes. Clark, a classic malcontent, enlisted in the Navy after high school, was misevaluated and put in a class for especially slow delinquents, shipped out to sea, came back and was retested, this time scoring so well in math that it baffled his instructors.

He later got a Ph.D. in computer science and spent 10 years failing at various academic careers and a couple of marriages before reinventing himself and heading off to Stanford. There, he and his students designed a microchip he called the Geometry Engine, which allowed computers to visualize objects in 3-D. Fruitlessly, he tried to license the thing to IBM, DEC and Hewlett-Packard, before starting Silicon Graphics to sell workstations with the chip. That's where Clark honed his distaste for venture capitalists, whom he saw as stealing his enterprise and putting it in the hands of managers. Clark never let that happen again, keeping control when he got financing for Netscape and Healtheon.

My only gripe: a writer's first duty should be to his readers, not his subject. Sometimes I got the feeling that Lewis so reveres his protagonist that he became his apologist. Clark, we're told, is restlessly obsessed with finding the next new thing--which is, apparently, a good quality. But another interpretation might be that Clark is simply driven by the pursuit of filthy lucre. There has to be a higher purpose to life than making yourself rich. During the '80s, we knew that the people making their fortune on Wall Street were hardly role models; yuppie was a derogatory term. Clark, for all his brilliance, uses his billions to do little more than buy himself great toys; he's even cynical about the get-rich-quick Net companies he's created. And yet he's our role model? He makes Bill Gates look enlightened.

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