Last week, a motley mass of shitposters, gambling enthusiasts, and disaffected Zoomers united by hate for Wall Street and love of chicken tenders beat a multibillion-dollar hedge fund at its own game. Through their collective intelligence and audacity, users of the Reddit forum WallStreetBets executed a sophisticated short squeeze that took money away from some billionaire speculators, gave it to some badly indebted workers, and made a mockery of neoliberal capitalisms legitimizing myths. Unfortunately, right when these working-class retail investors had Wall Streets titans on the run, the plutocracys visible hand appeared to reach down and thwart them: Robinhood, a trading app popular with young recreational investors, suddenly barred its users from buying GameStop shares, thereby relieving pressure on the hedge-fund shorts. That is one way of recounting the GameStop rally, anyway.
Here is another: A group of small-time speculators including some finance-industry professionals orchestrated a pump-and-dump scheme that involved convincing a lot of financially inexpert (and/or politically disaffected) people that they could stick it to Wall Streets largest money managers by bidding up the price of an equity that is owned by Wall Streets largest money managers. This generated enough momentum to trigger a short squeeze, and the price of GameStop shares shot to the moon. Wall-to-wall media coverage ensued. Inexperienced investors bought the hype, and began piling into what now resembled a Ponzi scheme: When the bubble finally burst, those who bought in early would have a chance to cash out before the stock fell beneath their break-even price; those who bought late would have little warning before the dump wiped them out. By late last week, so many people were buying GameStop shares over gamified phone apps that regulations aimed at ensuring the stability of financial markets kicked into gear. The stock markets central clearing hub calculated that it faced a high risk in facilitating more GME buys, and demanded billions in collateral from brokerages ordering such trades. Lacking the funds necessary to meet this demand, Robinhood was compelled to restrict GameStop buying on its platform while it sought an infusion of liquidity. That pause hastened the inevitable end of the GameStop rally, which ultimately achieved little beyond popularizing participation in stock trading (a development that will enrich Wall Street at the expense of working-class people with gambling problems).
There is some truth to both these accounts. But to believe that the GameStop short squeeze was an updated and superior version of Occupy Wall Street which is to say, a populist challenge to the tyranny of high finance that deserved the lefts avid support and attention one had to accept the first summary as gospel, and dismiss all confounding details as apologetics for Big Hedge Fund. Unfortunately, a number of influential progressives did precisely this. For a few days last week, amid mass hunger and unemployment, various left-wing Twitter influencers chose to focus their advocacy on the plight of small-time speculators whod been barred from buying into a pump-and-dump scheme while socialist congresswomen treated the right of amateur market manipulators to purchase whatever stocks they want, in whatever quantity they can afford, on the phone-based trading app of their choice, as a cause of national importance. These actions werent cynical. At least, not typically. And in the context of the GameStop media firestorm, they may well have been reasonable. On one level, the GameStop story was an object lesson in the power of collective action and absurdity of market fundamentalism. By pooling their wits and capital, a large number of relatively low-wealth, low-clout individuals took money away from a hedge fund. Whats more, they did this in a manner that served to delegitimize financial markets as all-knowing arbiters of economic value: When the share price of a brick-and-mortar video-game retailer increases 20-fold in the course of a month, the notion that there is a tight correspondence between market prices and objective worth becomes difficult to sustain. And absent that premise, the case for entrusting our nations investment needs to unaccountable private actors becomes harder to make. The American left is in sore need of converts. When a story with this kind of radicalizing potential becomes national news, progressives may be well-advised to engage with it, so as to steer popular understanding of the event in an egalitarian direction.
But if the left can benefit from engaging trending news stories, so as to remake them in its own image, there is also a risk that chronic immersion in such stories will have the opposite effect: Instead of imbuing social-media uproars with the values of the left, the left may find itself imbued with the values of social media.
