The first hedge-fund manager, Alfred Winslow Jones, did not go to business school. He did not possess a Ph.D. in quantitative finance. He did not spend his formative years at Morgan Stanley, Goldman Sachs or any other incubator for masters of the universe. Instead, he studied at the Marxist Workers School in Berlin, ran secret missions for a clandestine anti-Nazi group called the Leninist Organization and reported on the civil war in Spain, where he hitch-hiked to the front lines in the company of Dorothy Parker. It was only at the advanced age of 48 that Mr. Jones raked together $100,000 to launch a "hedged fund," setting...