October 4, 2023

Wall Street was one of the last powerful institutions to be overrun by online populists, partly because it had a higher barrier to entry. Anyone with an internet connection and a Twitter account can start a hashtag campaign. However, because trading stocks costs money and requires a certain amount of expertise and time, this has largely been left to professionals.

Smartphone-based trading apps like Robinhood changed that by introducing commission-free trades and an interface that made performing a gamma squeeze as easy as ordering a burrito on Uber Eats. All of a sudden, millions of amateurs could get organized, create their own market research and investment theses, add excitement in Reddit threads and TikTok videos, and go to the casino with the big boys. (Whether storming the high roller tables helped them financially is a whole different question.)

Many accounts of the GameStop saga have captured the hilarious, mundane excitement of the dealers and the stunned disbelief of their Wall Street antagonists. But there is a corner of economic justice that is easy to miss. On r / WallStreetBets, you’ll find passionate essays from traders who say that betting on GameStop will make them re-empowered in a financial system that has only been exploiting them and their families for years.

“Greed is absolutely out of control at the top, and this funny little message is tangible evidence of it,” one user wrote in a popular post on Wednesday. “Don’t let them make you think that getting a slightly bigger piece of cake is wrong for you.”

If you can get past the madness and weird jargon, the Redditors make some good points. Big banks and hedge funds actually adhere to different rules than private investors. Wall Street banks were truly bailed out after the 2008 financial crisis, while Main Street homeowners suffered. MBAs in fancy suits probably won’t give you good investment advice than people on YouTube with names like “RoaringKitty”.

While watching the GameStop drama, I was pondering what writer Martin Gurri calls “the public revolt”. Mr. Gurri writes that the Internet has empowered ordinary citizens by providing them with new information and tools that they then use to discover the flaws in the systems and institutions that run their lives. Once they discover these flaws, he writes, these citizens often rebel, raging down elites and dominant institutions for being lied to and holding back.

The result, writes Mr Gurri, is a kind of vengeful nihilism, an urge to burn the establishment down without a clear sense of what to replace.