By Chrystia Freeland

NEW YORK Feb 9 (Reuters) - If you want to get a finger-tip feel for one of the most important transformations in our world today, read "The Fear Index," Robert Harris's new thriller.

Harris has been widely praised for his adept portrayal of the hedge fund universe in which his novel is set. "The greatest pleasure of this book is that it gets the finance right," cooed Felix Salmon, the Reuters finance blogger whose keyboard often oozes acid.

He is right that Harris's hedgies are a welcome and realistic departure from the Masters of the Universe of most popular fiction. For one thing, these are the alpha geeks, the nerdy doctorate-holders whose testosterone is channeled into equations instead of frat-house swagger.

And Harris knows his super-rich. As they are being wooed to make a billion-dollar investment over a 1995 Latour in a fine Geneva restaurant, an international group of investors energetically discusses the ways that their national governments oppress them. Dr. Alex Hoffmann, the billionaire hedge fund manager protagonist who is making the pitch for their cash, reflects: "He was remembering now why he didn't like the rich: their self-pity. Persecution was the common ground of their conversation, like sport or the weather was for everyone else."

But the most valuable intellectual take-away from this riveting novel is the element that has been widely dismissed by reviewers as familiar and unpersuasive: VIXAL, the intelligent machine at the heart of the story that torments its human creator and may be trying to rule the world.

Michiko Kakutani, writing in The New York Times, gave "The Fear Index" a thumbs-up, but deemed the machine takeover "silly and contrived." VIXAL, the evil genius computer, "seems less like a plausible villain than like a metaphor for the greed and heedlessness that overtook Wall Street," she wrote.

Kakutani's dismissal of VIXAL as an unoriginal and uncompelling reworking of the Frankenstein template misses the most important point. VIXAL and the parallel world the computer program creates by interacting with other machines is worth reading about - but not for the usual pulp-fiction pleasure of entering a vividly rendered imaginary world.

"The Fear Index" is fun to read because Harris is a great novelist, but VIXAL is worth getting to know not as a fictional character, but because so much of what it does is already happening in real life.

Futurists and fantasists have been dreaming about the rise of intelligent machines for centuries. Now it is actually starting to happen.

For a drier but in many ways even more astonishing account of what is going on, read "The Second Economy," an essay in McKinsey Quarterly by W. Brian Arthur, a visiting researcher at the Intelligent Systems Lab at the Palo Alto Research Center in California.

Arthur's contention is that a second, machine-to-machine economy is emerging and that it will bring deep economic, social and political change comparable to the transformation wrought by the Industrial Revolution.

"Business processes that once took place among human beings are now being executed electronically," Mr Arthur writes. "They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn't seem particularly consequential - it's almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one."

Arthur describes this economy as "vast, silent, connected, unseen and autonomous (meaning that human beings may design it but are not directly involved in running it)." The second economy is manifest in transactions as quotidian as checking in for a flight with a machine and as esoteric as the algorithm hedge funds of Harris's thriller, which use information produced by machines to trade with other machines.

Economists and novelists aren't the only people musing about the rise of the machine-to-machine economy and its transformative potential.

Yuri Milner is one of the savviest technology thinkers in the world; he was a pioneering investor in Facebook, a bet that was wildly vindicated last week.

Milner has a presentation in which he describes the nine most important changes in the world today. Three of them are about what Arthur has dubbed the second economy: the rise of what Milner calls "the Internet of things," or the machine-to-machine economy; the growing power of artificial intelligence; and the emergence of a "global brain," which is the network of all of the people and the machines in the world and their connections to one another.

The one aspect of "The Fear Index" that is tired and familiar is its depiction of the rise of the machine-to-machine economy as murderous and menacing. That time-worn worry that the smart machines will turn on their creators isn't one I share. I am a fan of the machine-to-machine economy and of all the ways it makes my human life cheaper and easier.

But I am concerned about something Harris only hints at. At the end of "The Fear Index," VIXAL changes its hedge fund's mission statement. The first lines of the new, machine-written version, read: "The company of the future will have no workers."

I'm not afraid our smart machines will try to exterminate us, but I do worry that the second economy may be a jobless one.

Arthur doesn't offer much comfort on that score. In an exchange with a reader after his essay was published, the economist wrote: "Since the second economy began, in the early and mid-1990s, we've had wave after wave of downsizing and layoffs, and now we have ongoing structural joblessness. I hope jobs will be created, and maybe they will. More likely, the system, as so many times before in history, will have to readjust radically. It needs to find new ways to distribute the wealth."

• A Permanent Economic Emergency