Note: In 2021 I’ll publish at least one blog post per week, ideally on Wednesdays. Here’s entry 4 of 52. Barely made it this time, on Saturday night!
Note: The second half of my two posts on Biden will come in February.
Note (added Sunday 31 January ’21): Motivations of the diverse r/wallstreetbets members can be found by searching the subreddit. From my readings of it, the community seems to largely share a disparagement of institutional investors, and a disdain for hedge funds shorting and destroying companies (not to mention their impact on the trade economy at large), though they sometimes admire various top dogs in the Wall Street world. To look further into the subreddit’s motivations and/or vibe, you might start by checking out the post histories of its members u/DeepFuckingValue, u/stonksflyingup, and the subreddit’s Ask Me Anything from Friday. My purpose is not to lionize these users, whose numbers are too large to permit easy generalization anyway, but to explain what’s happening and point to further texts that readers interested in the topic might consider digging into.
This past week, many among the now seven million-plus members of the subreddit r/wallstreetbets pushed a hedge fund, Wall Street financier Gabe Plotkin’s Melvin Capital, to close out its short position in the video game retailer Gamestop. With a few billion dollars, Melvin had bet against the beloved yet beleaguered Texas-based store. The subredditors persuaded each other to buy Gamestop stock en masse, boosting the price dramatically and causing Melvin to hemorrhage financial value. Plotkin’s peers on Wall Street then infused Melvin Capital with massive funds to keep it afloat, but the fund still had to flee the Gamestop battle. By then, Melvin had reportedly lost a stunning third of its assets, at the hands of average (apparently mostly U.S.-based) Internet users.
Following the same rules as the hedge funds, the subredditors won this round of the capitalism board game, thanks to their large numbers. Similar situations happen with unions. Corporations band together in cartels, increasing their number and power, to control markets; paid-workers unite in trade unions to (try to) control markets as well. Each side calls the other criminal cheaters, with the illegalities of the rich far outweighing those of the middle class and poor struggling to survive. Governments attempt to intervene as their donors and blackmailers wish, aiming to keep up the ongoing exchange of goods/services without which civilization would have to change paradigm.
Some of the subredditors are expressing surprise that various Wall Streeters aren’t taking their side. r/wallstreetbets has been stanning Dr Michael Burry of Scion Asset Management for a year-plus, presumably a partial result of the investor’s name recognition from the 2015 hit movie The Big Short. They are now realizing he’s dissing them publicly. That was on Tuesday, when in a tweet he soon deleted, Burry tagged the Securities and Exchange Commission’s enforcement arm and wrote of the market battle: “what is going on now – there should be legal and regulatory repercussions. This is unnatural, insane, and dangerous.” Burry owned 1.7 million GameStop shares last September; assuming he hadn’t changed his position, the subredditors, without aiming to benefit him, just gave him a bonanza of nearly a quarter billion dollars, almost 1400% in four months, on paper anyway, and he still called for legal repercussions against them.
It looks quite like Burry can’t abide rubbing elbows with the several million ordinary people on the subreddit, can’t let his class status slip, despite them praising him for months and months and possibly handing him a gigantic windfall. No, Burry wants the rabble hordes arbitrarily blocked from doing what hedge funds like Melvin Capital or his do.
More big names than Burry are troubled that the public beat a hedge fund at the capitalism competition. Others of the ruling class are calling for an investigation into r/wallstreetbets, treating everyday folks playing capitalism like the game it is as a potential crime. Financial apps such as Interactive Brokers abruptly blocked the users’ ability to buy Gamestop shares (and other stocks also involved) and, it appears, Robinhood Markets sold away shares of users who’d bought Gamestop on margin, something reportedly permitted by their one-sided terms of service but in opposition to userbase trust. Like The Daily Show (corporate television) smearing Occupy Wall Street protesters in 2011, the fourth branch has rushed to describe the redditors condescendingly (the audience for the news media are the politicos and intelligenstia of the status quo, not the public). The Biden administration, which as rent deadlines approach has yet to deliver the promised $2000 stimulus cheques, is “monitoring the situation.” But forces as disparate as Republican senator Ted Cruz and Democratic House member Alexandria Ocasio-Cortez have been lining up behind the subredditors.
The capitalists’ own propaganda paints them as shrewd alpha males who deserve their yachts and affluenza legal defenses as reward for their (or their parents’) trading skill, yet the moment unions or the public, following the rules, or at least the logic, of the money game, manage to exploit a weakness in the ruling class’s position on the game board, the powerful overturn that board and bring out force. Consider the disproportionate targeting that happens in meatspace. Fancy restaurants place tents and tables on nearby public grass by a sidewalk without significant hassle from the authorities, perhaps mere food safety regulation assessments; homeless people pitching a tent in the same spots will face violent sweeps from security forces. Well-to-do civic associations can shut down streets for parades, stopping vehicles, but Black Lives Matter protesters objecting to street executions by cops will be arrested or worse for doing the same thing, while reactionary legislators in multiple states strive to legalize running over traffic-blocking protestors. Thus, it’s not about who has the best knack for surviving and thriving in a trade civilization, because once the public discovers an effective tactic, the ruling class knocks them back down and then sets the board in position again, acting like everything’s back to normal business hours.
The illogic continues to the economic system as a whole. The dangerous effort of creating humanity in the first place by giving birth does not pay, but building tasers or using them to kill people, including those diagnosed with mental health problems, does pay. Less dramatic examples can be found too. Substitute teachers are paid to bone up on their subjects during certain hours of the day (planning periods) but not during other hours (evenings), and the students aren’t paid to learn. Therapists get paid to help clients overcome addictions, but aren’t paid to work to overcome their own addictions. An economic system is just a board game, often with moneytokens (or other tokens such as indulgences to buy from priests to get into heaven). If the board game doesn’t make sense, there is every reason to start playing a different one.
Fairness, but to what end?
To date, much of the conversation around r/wallstreetbets has focused on the lack of fairness in the financial system. Humans have an innate desire for fair treatment, as observed in experiments on primates, and more simply, as observed in children. Debates over whether $10/hour, $15/hour, $20/hour, or some other rate constitutes fair pay are perennial (why not an arbitrary amount like $50,000.000033785/hour?). For instance, James Joyce’s protagonist Mr Duffy tired of such predictable and myopic talk in the author’s short story “A Painful Case” published more than a century ago in 1914. People have taken for granted that a wage system is it, and got hung up on comparing who gets paid how much, for a very long time. But the understandable call for fairness is simply a starting point. Questioning and ultimately replacing the wage/trade system itself is more important.
Just because a game is fair, doesn’t mean it’s good. Bad games, neutral games, or good games can all be either fair or unfair according to whether the rules are followed, or not, by whichever sides. Like fossil fuel companies, Billionaire A and Billionaire B can compete in the capitalism game to see who can drive humanity extinct most profitably. Their capitalism competition can be played fairly, or unfairly, but either way, we all end up dead. In the hundreds of thousands of years of humanity (not just 2500 years back to ancient Greeks), we have organized the production and distribution of goods/services into multiple different economic systems across multiple different civilizations, with a variety of results. Those experiments wait outside the corporate media spotlight, so fixed as the news spotlight is on mesmerizing everyone with the vastly overemphasized war criminal politicians or those seeking to replace them with saleable identity labels. Further, the emphasis on left brain charts describing the production, circulation, and distribution of goods, from Royal Society fellows like Karl Marx (also a racist), merely scratch the surface of what’s going on with humanity. Underneath, we want not to hoard abstract money-tokens; we want to feel good, get to know each other and ourselves, explore, share, grow, and so on. It is possible to organize production and distribution in ways that respect this.
More detail would take too long for a blog post, so here are some suggested readings for people interested in this topic to pursue. As the trade system continues its slow implosion, and the oncoming effects of global warming increasingly throw lives into disarray, it’s a good time to explore alternatives. It’s not unrealistic; every day, people quit their paid-jobs to go shut down pipelines or reunite with nature or try any other number of outside-the-box ideas. Thus to conclude, the short list of texts involving economics (and the personal relationships and emotions below the surface level of existence described by economics) that readers might find helpful.
- Ursula K. Le Guin’s novels The Dispossessed (1974) and Always Coming Home (1985)
- Heather Marsh’s Binding Chaos books
- To know what came before, try Robert L. Heilbroner’s The Worldly Philosophers (1953, seventh edition 1999) and reading canonical economics texts firsthand. Those canonical economics texts can be old and written with archaic language and examples, so check sites such as OpenCulture.com to find secondary sources to help with understanding
- Marcus Brancaglione’s Universal Basic Income (2016), translated into English by Marcio Rolim and Fabiana Cecin
- Crimethinc.com, especially To Change Everything
- Follow @YourAnonCentral for general world news and analysis
This blog post, Gamestop & r/wallstreetbets: fairness just a starting point by Douglas Lucas, is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License (human-readable summary of license). The license is based on a work at this URL: https://douglaslucas.com/blog/2021/01/29/gamestop-wallstreetbets-fairness-starting-point/. You can view the full license (the legal code aka the legalese) here. For learning more about Creative Commons, I suggest this article and the Creative Commons Frequently Asked Questions. Seeking permissions beyond the scope of this license, or want to correspond with me about this post otherwise? Please email me: dal@riseup.net.
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