The Crash: Are Computers to Blame?

If big investors are determined to panic, computers can sure help. A few keystrokes into a broker's desktop computer can trigger the sale of thousands of shares of, say, 500 different companies. Such "program trades" may have played a role in making Black Monday the worst day in Wall Street history. As one Chicago broker joked, the difference between 1929 and 1987 is that last week, it was the computers that jumped out the windows.

But how much are the computers to blame? That issue stirs a great deal of confusion. The term program trading is misleading: it derives not from...