"It is usually agreed," Lord Keynes wrote in his General Theory, "that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of stock exchanges." This, I think, is the lesson we are meant to take from the bizarre series of events that culminated in the disappearance of GameStop, a mall retailer, from various commission-free online trading platforms on Thursday morning after its shares rose as high as $480.
Before anything else, a confession: I have probably enjoyed the last two days of absurdity as much as I have any news story of the last four years. It would take a heart of stone not to cheer for the coterie of minarchists and Sailor Moon fans who appear to have outsmarted several major hedge funds, or to feel anything but elation upon learning of the heavy losses incurred by the latter. An organ made of some yet sterner material would be required to share the view, expressed recently by Ben Shapiro, that these heedless investors were guilty of "undermining confidence in the pricing mechanism," whatever that means, or even graver crimes: an unbecoming insouciance in the temple of Wall Street (and, no doubt, insufficient respect for its high priests).
Nor is my approbation limited to these feelings. It is a good thing for the American people to be reminded from time to time that whenever some excuse is given for the failures of our economic system — the unquestionable imperative of market forces to operate as they will, the inviolability of certain basic structural laws, congressional inertia — we are being told lies. The total collapse of America’s industrial base, and the poverty and addiction that followed, might well have escaped the notice of most investors. But when it is their pleasure to do, which is to say, when their own interests appear threatened, Wall Street, the financial press, the Securities and Exchange Commission, the Treasury, and even the White House itself can act swiftly and decisively. What the GameStop farce showed beyond any argument is that there is no meaningful relationship between the prices at which shares in corporations are bought and sold and their underlying utility, much less some undeniable public benefit in making these unedifying gyrations the most basic organizing principle of a society.
But if I have learned anything in the previous four years it is that we should distrust what I have come to think of as the middle finger principle in politics. It does not follow from the fact that my enemies (real or perceived) experience some injury or express their disdain for something or someone that either cause or person is on the side of the angels.
It will probably be some time before we discover (if indeed we ever do) the full story behind the short squeeze. But one thing we know already is it cannot simply have been the result of enthusiastic retail investors driving up the price of worthless shares. The volume of trading on Thursday morning alone — perhaps as much as $40 billion — makes it clear that serious money was behind this strange expedition.
Would it astonish me to learn that Reddit users were tacitly encouraged to do the bidding of one hedge fund intent upon sabotaging another? Certainly not. Indeed, my first impression upon learning what had taken place was that the whole thing must have been some kind of plot undertaken by reactionary hucksters.
At present there is no evidence that anything of the kind has taken place here. (The closest we have to a right-wing pied piper in this case is Dave Portnoy of Barstool Sports, who for days encouraged the squeeze and vowed on Thursday that he would rather lose $2 million than sell.) But what appears to have happened instead is something stranger and, in a sense, more sinister. It was not some obscure MAGA financier convincing the Reddit masses to live-tweet the revolution with T.D. Ameritrade screenshots, but the individuals themselves, like the companions of Oz opening the curtain only to find a mirror and their own voices issuing forth from the loudspeaker. This, I think, is a better explanation for the populist politics of the last four years than the parallel conspiracies usually evinced in fashionable circles.
The ridiculous narrative according to which the Great Gamestop Short Squeeze was some kind of revolt against unnamed representatives of the financial elite did not emerge from the fecund imagination of a Steve Bannon or a Jacob Wohl. Rather it appears to be the result of spontaneous generation, an essentially untraceable organic growth like QAnon. It was as if hundreds of thousands, perhaps even millions of people had decided simultaneously to create the South Sea Bubble to own the libs.
What can we learn from this episode and from others like it (among which I would include the events on Capitol Hill earlier this month)? One lesson that should be wearyingly familiar by now, namely, that we cannot allow roleplaying to be the only means by which citizens can attempt to redress their grievances, ill-formed and contradictory as they may be, against the modern world.