A Reddit logo on a smartphone with the WallStreetBets logo.
(Image: Thiago Prudncio/SOPA/Sipa USA)

There’s something piquant in that those crazy Reddit WallStreetBets folk are going after silver now.

The great gaming of the global silver market in 1980 was one of the last events of the relatively stable Keynsian era. The Hunt family of Texas — billionaires, when there were only about six of them in the world — tried to corner the market, at one point owning a third of the world’s private silver.

The effort collapsed, sending a shock through the world. But what’s striking about the great Hunt silver corner was how long it took. The effort began in 1973 — another era, of phones and telexes, open-call markets and capital flow barriers, and nothing like the layers of ever more abstract financial products available today.

Is the switch from short squeezing dying consumer chains to an old metal a tip of the hat to the old world?

Maybe, maybe not. But it seems very likely that the GameStop short squeeze and all that came after was about more than making a quick buck, and more even than the stated aim of punishing colluding hedge funds.

The mainstream financial press has had a lot of difficulty coming to grips with the GameStop thing, because of a deep-seated belief in the eternal truth of the stock market as the unchanging steering mechanism of capital.

Though the “first order” market — the buying and selling of actual bits of companies — has long since been swamped by the multiple abstract instruments that leverage bets upon them, the notion that there is a rationality and efficiency at the core of the whole process is essential to its command.

The whole funding of the Amazon/Uber revolution has relied on trading floating free of any ground-level measure of value (profits, earnings etc). But at the same time, the forces controlling financial capital have some awareness that a market cannot live up to its own implicit promise — of being an open and unbounded system — and reproduce itself.

Since the great crash of 1929 — actually since the near crash of 1910 — markets have ceaselessly introduced rules to stop the market being a market, from trading suspension, investigation of mathematical anomalies, insider trading and so on.

This only really came apart in the years 1999-2008, when a mix of greed, ideology and sheer nihilism saw the system tear itself apart. The crash of this open slather system showed that markets will always collapse over a five to 10 year period, if left to their own devices. The classical liberal idea of the “catallaxy” — a spontaneously arising order — is just a myth used to legitimate the private rights to system profits.

The state is the guarantor of value; the market simply a space within the state. The opportunity to short a stock for profit can only be achieved by an imposed asymmetry: hedge funds and broking houses, dominated by the long-established haute-bourgeoisie, colluding through a mix of simple market signalling and a degree of informal interconnection through clubs and dinner parties.

The collective short of something like GameStop can only be potentially lucrative if the mass of investors have no mechanism of interconnection and communication.

The market as it has been, in which agglomerated finance capital makes steady, unchanging profits, doesn’t promote — and can’t be — a level playing field. There must be barriers, breaches and huge inequalities of access built in. Hence the panic at the sudden appearance of the r/WallStreetBets push.

Organised capital has always had minnows that make profits by turning against the current — typically, investment newsletters with a few hundred or thousand subscribers, such as the half-dozen or so “big shorts” which operated during the 2007-8 sub-prime crash.

But the very method — the subscriber newsletter, an in-group — limits the capacity of such groups to shift the whole terrain (nor would they want to). The rise of social/peer-to-peer media changes that radically. WallStreetBets had 4.5 million members when the GameStop “short squeeze” began. It is now on its way to 7 million.

Social media has a great capacity to aggregate action, not by price signalling as markets do, but by creating multiple massive intersecting conversations which tend to resolve towards synthesis and course of action.

Reddit’s WallStreetBets mirrors the evolution of the “Anonymous” movement out of the notorious 4chan site. These sites have a capacity to supercharge dialogue in ways beyond the intent of the lead participants themselves.

For markets, that is a nightmare, because it means that there is something non-quantitative that moves faster than the market itself. It’s social media that is the true catallaxy, and the GameStop “event” shows how utterly superseded the Mises/Hayek/Robinson argument of supreme market efficiency has become.

GameStop was a market “intervention”. The event (and the subreddit itself) may have been capitalist in intent, but it was also a post-capitalist moment, displaying a form of mass action that is superior to capitalism’s purely quantitative mode of steering.

Essentially, capital’s capacity to set its own value and rate of accumulation was radically undermined. It was another victory for the geeks over the suits, another battle between the knowledge class and capital, as the world is handed over.

Moving on to silver might have been hubris, or a knowing sign that they are back in it for the lulz (and the money). The response may well be a legal one, extending notions of collusion to the mere act of discussion, using carceral terror to chill cooperative action.

That will be less easily done in this case than with Anonymous, who were doing crimes. For WallStreetBets simply takes the market at its word; any statist attack on its capacity to invest and discuss undermines the very ground of capitalist legitimacy.

Where to next after silver? Will they go for gold, and turn the global financial system on its head?

Peter Fray

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