Is the online rebellion of small investors a sign of a wider revolt against capitalism, or financialization in a new form?
Author_ Max Haiven
February 3, 2021
There is an apocryphal story that, in the ancient mediterranean, slaves being transported to market in the hold of a ship realized that, though otherwise powerless, if they could coordinate their collective movement, hurling themselves from side to side of their crowded cabin their shared momentum would rock the ship to the point of overturning it. Imagine the debate: the most short-sighted might have said “now we, not our captors, are in charge of our fate!” Others urged the immediate use of this suicidal tactic: better to die free, together, and have a last revenge. Still others, counselled negotiations with the ship’s crew with this desperate tactic as a bargaining chip. Some, perhaps all, must have silently thought to themselves: If I betray my fellow slaves to the captain, maybe I will be rewarded.
In our day, the ship is part of the armada of world-destroying digitalized capitalism, currently presided over by the financial sector. The GameStop revolt represents our discovery of a new expression of the power of collective movement, hidden in plain sight. Unfortunately, unlike the movement of the slaves in the story, and contrary to the starry-eyed hype of many of its self-styled prophets, this momentary rebellion has no real potential in itself to sink Wall Street. The capsizing of one or even several ships in a slaving fleet would not overturn the system that put those boats and others to sea. Neither will the decapitation of a few over-leveraged hedge funds lead to the collapse of the financial sector. Yet the questions asked below deck then are the same: having discovered our power, how can we make the most of it?
Let’s recap: last week headlines began to run announcing that amateur investors using stock-trading apps that allow nearly anyone to play the stock markets were eagerly buying discounted shares in brand-name companies hard-hit by the pandemic. The bricks-and-mortar video game chain store GameStop was the most popular, but they also bought shares in the ailing cinema giant AMC, the outmaneuvered smartphone maker Blackberry and others. The rush of newbie investors to familiar stocks is nothing new — usually it is orchestrated by Wall Street wolves to make a quick buck.
But last week it turned out that the irrational enthusiasm of the rubes was unintentionally sabotaging the strategy of some major hedge funds who were already “shorting” these companies: essentially betting against their future success. Hedge funds are essentially investment clubs for rich people and corporations that borrow a lot of money to hire allegedly smart people to make risky bets against the market. In this case, they were outsmarted by the mob and forced to shell out millions to cover their positions (which also drove up the price of the shares in question).
Hearing the “smart money” hedge fund managers cry foul, an interet full of “dumb money” amateurs, egged on by forums on Reddit, Telegram and elsewhere, began to swarm towards their favoured stocks as a kind of lucrative revenge. This created a cascade of market maneuvers and, as the dust settled, billions of dollars had been wiped off the balance books of significant Wall Street firms entangled with the hedge funds (though others appear to have made huge gains) and many amateurs made a tidy return on their usually quite small investments.
Many did it for money, others for the delightful joke of it all, still others for revenge. Today’s retail investors who are putting the squeeze to the hedge funds are very far from slaves in the story above and the stakes are relatively low. They are, for all intents and purposes, seeking to use the masters’ tools to dismantle the masters’ house. It is not simply that they are literally using “fin tech” (financial technology) apps like Robinhood that were bankrolled and ultimately benefit hedge funds and other investors. For decades, neoliberal thought-leaders, government agencies and NGOS have been strenuously encouraging us “little guys” to dabble in stock trading, based on an ideology which instructs that capitalist markets are the most perfect of humanity’s inventions and, if only we all had access, they would manage society better, fairer, with greater freedom and prosperity, than any other system.
REVENGE AGAINST WALL STREET, OR WALL STREET’S REVENGE?
Though it has caused some hedge funds to suffer heavy losses and given Wall Street a black eye, the GameStop affair in many ways signals the victory of financialization: it has been so successful at recasting social reality as a series of “investments,” and recasting each of us as an isolated, competitive risk-taker, that even our resistance takes financial form. In fact, far from a neoliberal’s nightmare, this incident in some way fulfills their prediction that markets always bend towards openness, disruption, the ascent of the little-guy and the creative destruction of old forms.
And yet for those of us who, for a decade since the Great Financial Crisis (or more), have dreamed of revenge against Wall Street, this moment is sweet. Especially so as we witness the blatant and naked (even at times absurd) hypocrisy of those who, even weeks ago, championed neoliberal “market participation” as the magical solution to the problems neoliberalism itself had created (rising inequality, racist exclusion, international conflict, etc.) and are now caught trying to put the genie back in the bottle.
But the history of capitalism (or its financial sectors) shows that simply because one of its many contradictions has been revealed for all to see does not mean that anything necessarily changes. The problem with pointing out the threadbare velvet glove that covers the iron fist is that, of course, the fist remains. Ultimately, the GameStop episode will be remembered as merely a momentary blip on markets, a strange and funny abnormality when a swarm of ill-informed market newbies, meant to be a light lunch for professional and institutional investors, crashed headlong into some overleveraged hedge funds, causing a momentary confusion.
It is like a cat walking onto a street and causing a traffic jam as cars swerve to avoid it: for all the cat might arrogantly think he caused the world to turn upside down, the chaos and damage was due to reckless speeds of the rush-hour traffic it momentarily interrupted.
REMEMBERING OUR COLLECTIVE POWERS
For all of that, there is that vengeful frisson, the chill up the spine: we can do this, we can make them pay, we are more powerful than they, or we, ever imagined. As anyone who has ever watched riot cops run in retreat, or has watched a regime topple from the streets knows, that feeling is as profound as it is haunting. For a moment one holds in one’s hand a long-stolen inheritance: the power to be free together. Beyond the particular ideology or tactics that led to the moment of revolt it is that irreducible kernel of collective potential from which we are all made — the radical imagination — that sparks in the darkness. Afterwards, you can never see the world in the same old light.
Any system of power cannot tolerate the persistence of that flame because it is a constant reminder that the ruling order we have made is arbitrary, temporary and can be changed. Systems of domination not only work to stuff it out through direct violence but also through subversion, cooptation and divide-and-conquer tactics. In the moments following its flare, it is crucial that we mobilize the radical imagination to fan the flames of transformation.
In the case of the GameStop affair, there is indeed profound potential: a collective power to disrupt and destabilize capitalism has emerged from within that system’s own contradictions. Its insistence that we all become miniature capitalists and play the market casino has opened a small and limited space for tactics of refusal. But of what broader strategy will those tactics be a part? And how will that strategy be oriented by an imagination that reframes this world and allows us to envision worlds yet to come?
THINK TANKS OF THE INSURGENT COMMON
We desperately need a proliferation of and cooperation between think tanks of the insurgent commons that could analyze these contradictions and potentials and discover ways to leverage them in solidarity with other anti-capitalist movements. These might look like gatherings of activists, artists, scholars and hackers that would assemble to create opportunities for creative rebellion and reinvention. The GameStop affair was a happy accident and was animated by no unified strategic vision. What would it mean to leverage the power it revealed towards other ends?
There are precedents. Anti-debt activists in the US and UK have found ways to use the same mechanisms subprime debt buyers use and have crowdfunded to buy people out of debt. In the US, the Debt Collective is trying to mobilize millions of financial subjects into a movement of collective refusal and organizing debt-repayment strikes and other forms of solidarity to leverage policy change and build mutual aid and solidarity.
At this point there are more questions than answers. How could the same techniques used to put the squeeze on hedge funds be used to accelerate the defunding and abolition of police and prisons? How might it allow us to take revenge on corporations building mines and pipelines on sacred lands, or against climate criminals? What if tens of thousands of mortgage holders refused to pay en masse until their conditions were met? What if everyone withdrew their money from a bank on a specific day? What if we researched how the hedge funds responsible for environmental destruction were placing their bets and sabotaged them not at random (as essentially happened with GameStop) but intentionally?
I am decidedly not calling for more shareholder activism, boycotts or “voting with one’s wallet.” Rather, I am calling for thinking that will sharpen, aim and popularize these tactics as part of larger movements, not just juvenile gestures. I want revenge too, but revenge in the service of a greater abolitionist avenging where not only this or that fund crashes but cracks open in the system such that real change is possible.
Key to this will be forming new narratives of the insurgent “we.” Today, the “we” that mobilized around Gamestop was an ideologically confused online swarm, some seeking to make money, others in it for the lulz, others seeking vengeance. All of them had, to some extent, been drawn in by technologies and platforms that have, at their base, the financialized idea that, to paraphrase Margaret Thatcher, “there is no such thing as society,” simply competitive individuals or households managing risk and investment in an unforgiving world. Thus, the overriding narrative in the wake of the GameStop affair has been a celebration of the “little guys” finally being able to break-in to the casino and play with the high-rollers. But the casino, and its necessary corruption and violence, is unchanged.
It is vital to recognize that capitalism survives and adapts by constantly cycling through new capitalists drawn from the ranks of the oppressed. That some newcomers got rich from an unexpected loophole is not evidence capitalism is failing but that it is working as planned. Capitalism is singularly and terrifyingly adept at using its own contradictions and crises to drive its mutation because it encourages each and every person to orient their ingenuity, creativity and even, to a certain extent, their sense of justice, fairness and charity to the task of finding new ways to survive and compete within the system.
What other “we” is hiding in plain sight? How else might we tell the story of our strange collectives that are assembling and evaporating online? Most importantly, how can we link the aspirations and dreams of these collectives to those of other people in struggle around the world? Much hinges on if we can imagine how the drives that animate the GameStop protagonists connect to the struggles of the Zapatistas, the revolution in Rojava, to the Movement for Black Lives, to struggles for decolonization and popular autonomy and to humanity’s battle against capitalism’s climate and ecological terrorism. If we fail to develop such narratives and make them irresistible, we will lose this potential to the far right, who have never been shy of criticizing the “parasitism” of finance and stroking the egos of the mob, and to the revanchist centrists who will connive to return us to the deadly normal.
NEW FORMS OF COOPERATION
Finally, what the GameStop affair reveals is that ubiquitous, networked digital technologies give us profound new methods for cooperating. Even though, today, these potentials are everywhere foreclosed by corporate paywalls, proprietary code, surveillance capitalism and the get-rich-quick slogans of false prophets, they nonetheless hold the promise to allow us to coordinate the cooperation of seven billion people in ways that go beyond the chaos of global capitalist markets and the failed model of the nation state. If thousands, perhaps millions of people can move like a swarm to take swift and decisive cooperative action using these tools, what else are we capable of?
Capitalism is a system of coerced human cooperation (including cooperation with non-humans like animals, plants and minerals). It uses money and other forms of violence as a lure and a whip to harness our labor and time, to place us in a now increasingly global network of relations that produce the goods and services we need, or have learned to need. It is unequal, exploitative, unsustainable and brutal, but underneath that it is a self-replicating pattern of cooperation. To defend and extend its inequalities and exploitation it has generated new digital tools of communication and coordination. But capitalism’s one and only goal in organizing this cooperative potential is its own limitless reproduction expansion.
Today, there are a proliferation of profoundly interesting experiments in how to use new digital tools to not only organize our movements but to begin to coordinate our cooperative production and distribution of goods and services, of creative and of care, in ways that do not rely on markets or an overarching coercive state apparatus. The power exists to reassemble social cooperation fairly, sustainably and democratically beyond capitalism.
Already it is happening in a million places: mutual aid networks are reinventing care and material provisioning in the austerity pandemic; queer and trans communities are reinventing the meaning of family and solidarity; Indigenous militants are reclaiming modes of kinship not only between people but also with non-humans as well; the movement of Black liberation is dreaming of and creating new futures beyond the white-supremacist worldview; workers of the digital economy are organizing in new ways that exceed and refuse any nostalgia for the capitalism of the past; and everywhere we are using the new digital tools, in spite of their corporate enclosures, to play together, to create together, to love and to learn together in profound new ways.
The GameStop frenzy does not, in and of itself, have the power to disrupt or challenge the financial order or the system of capitalism of which that order is a part. But it has opened millions of eyes to the fragilities of that order and the possibilities for resistance and reinvention within our grasp.