Finance: It was the Dutch who first brought to the new world their experience of trading and speculating in money. They built a stockade around their enclave - the "wall" of Wall Street - to keep the cows in and to keep the Indians and the British out.
But the British arrived by sea - and so New Amsterdam became New York. Over the following 200 years, Wall Street became the world's most powerful money market, trading in the paper of governments, corporations, commodities, currencies. This book is the story of Wall Street from its very beginnings to the present day.
Steve Fraser has woven a number of themes around and through the story. First is the great debate, started by Thomas Jefferson and the first secretary of the treasury, Alexander Hamilton, on whether a market trading and speculating in money would create a new, powerful elite, which would undermine the republican foundations of the American "experiment".
The second theme is the complex and often ambivalent relations between American governments and the "moneyed class". The Street worked with government to float the new nation, funnelled capital into building the railroads and canals, and on occasion bailed out the government. But the Street also speculated in government debt, and in time corrupted not only the railroads, but the political system itself - the very thing that Jefferson had feared. Crony capitalism is as old as Wall Street itself.
Third is the ebb and flow of governments' attempts to regulate the dark side of the market. Insider dealing, price manipulation, stock watering (a term derived from ranching, where cattle were made to drink water ahead of the mart, to artificially inflate their weight), bull runs, bear raids, greed and corruption have always been a part of Wall Street.
The fourth theme is the yawning inequality in wealth created by the Street. In the 20 years to 1999, the share of American wealth held by the top 1 per cent of Americans more than doubled - from 20 per cent to 40 per cent. In 1968, the pay of the average chief executive was 25 times that of hourly production workers; by the early 1990s this had grown to 100 times; by 1999 it had reached 419 times.
Within the story of this new wealth are examples of vulgar, conspicuous consumption - lavish balls, 20,000-foot "houseleums" and Aston Martin, who promised prospective buyers that their car would "demoralize thy neighbour". We see too the often pathetic attempts of new money to buy respectability and pedigree by "erecting a faux social hierarchy on the fly".
But the core of the book is the fascinating story of Wall Street itself. We're taken on a roller-coaster ride of recurring cycles of boom, panic, crash and depression - all the result of what Alan Greenspan calls "irrational exuberance", the aggressive speculation which has been the hallmark of Wall Street. We learn about the emergence of the New York Stock Exchange, the Federal Reserve, the Securities and Exchange Commission, ticker-tape, futures, derivatives and all the paraphernalia of the market
The cast of characters is vast. We meet all the legendary figures - The Four Horsemen of the first Gilded Age (Cornelius Vanderbilt, Daniel Drew, Jay Gould and "Jubilee" Jim Fisk) and JP Morgan, whose presence spanned generations and whose "white-shoe" financiers built the huge trusts and became for a time America's Central Bank. There, too, is Andrew Mellon, who stoked the fires of consumption and speculation in the 1920s, the Rockefellers, Andrew Carnegie, Charles Merrill, Donald Trump, Michael Milken, the heroes of the Reagan-inspired second Gilded Age, and a veritable host of others.
Fraser has also assembled a chorus to comment on all this drama. From a mountain of research (the notes run to 60 closely typed pages) we have the voices of presidents and politicians, the opinions of newspapers and magazines, economists, novelists, playwrights, satirists, cartoonists, gossip columnists, painters, preachers, movie-makers, television soap producers - even the changing subjects of board games. Not surprisingly, Gordon Gekko makes an entrance - the anti-hero of the film Wall Street, modelled loosely on Ivan Boesky, who ended up in jail. This assembled chorus enriches the Wall Street story and gives it a colourful perspective. However, in some stretches of what is a long book, it is sometimes overpowering and obscures the underlying drama; Fraser is better in the latter stages of the book, when there's less chorus and more of the actual story.
There are, of course, the critics of the money market - starting with Jefferson and running through the Populists with their rural, agrarian anger, the old guard of Brahmin conservatives, the Progressives, Joseph McCarthy. Within the critical chorus is a recurring theme of anti-Semitism, expressed most bitterly and aggressively by Henry Ford.
Fraser is particularly good on the Roaring Twenties, the Crash in 1929, the Depression and the age of the New Deal, with its "Keynesian financial stabilisers" and regulation aimed at curbing the wild side of Wall Street - much of which was unwound during the Reagan years. Given Fraser's statement that the two defining events of America are the Civil War and the Depression, it's disappointing that the Civil War receives only passing treatment. And one imagines that a third defining event is 9/11, the cataclysmic events of which took place only around the corner from Wall Street, but which hardly gets a mention. In fact the whole story seems to fizzle out around the millennium, so that the scandals of Enron, WorldCom and others, and the debates which led to the Sarbanes-Oxley Act, merit only a short description. But these reservations should not detract from what is otherwise a tour de force.
In the end this is a story about speculation - its history and morality. In the early 1900s the value of commodities traded on the Chicago Commodities Exchange was seven times the actual value of agricultural output. The resulting wild gyrations in price wiped out most of the family farms which had been the backbone of early America. In the 1990s people wore wristwatches that beeped when IBM's stock price hit its owner's price threshold. The Street is a world populated almost exclusively by white males - full of testosterone and fast-paced deal-making. Attempts to regulate the dark side of Wall Street run up against the fact that the game isn't really about money, but about the sheer libidinal excitement of playing.
Speculation in the money market poses a dilemma for the US. It is, as Fraser says, at the very heart of the American entrepreneurial genius, "that audacious instinct to seek out the new, to cross frontiers". It's the spark which ignites America's great capacity for change, innovation and enterprise, which coldly allocates resources to the right projects, which builds the railroads to open up the continent, and which roots out inefficiency. It holds open that inexorable American right to the pursuit of abundance.
It is at the same time a betrayal of the founding fathers' Protestant ethic of hard work, thrift and output. Wall Street is a place of "trading air", which is ultimately corrupting of individuals, politicians and governments. The market is blind to the wider social consequences or "collateral damage" of its process - when people like "Chainsaw" Al Dunlap strip the assets of flabby corporations, they decimate industries, destroy communities, families and individuals. It is a place where great fortunes are made and lost, where obscene wealth breeds vulgar consumption and sycophancy. It is where Kenneth Lindo, a long-time Wall Street messenger, totes heavy bags full of cheques and stock certificates - and takes home $5.50 an hour and for whom "home" is the Men's Shelter on Thirtieth Street.
The dilemma is that Wall Street contains both these strong positives and negatives. Americans will continue to have a love-hate relationship with Wall Street - repelled by its excesses, but drawn by its magnetism and fascinated by its flash and drama. For anyone with an interest in the workings of the money market, in American economic and cultural history, this is a fascinating and readable book.
Brian Patterson is chairman of The Irish Times Ltd and chairman of the Irish Financial Services Regulatory Authority. He is also an Eisenhower Fellow
Wall Street By Steve Fraser Faber and Faber, 543pp. £25