Memetic war has been coming fast and hard these last couple of years. And our understanding of it is so poor, it’s likely to continue without any hope of remediation or fixes, with uncertain consequence, for a while. Our journalistic/academic classes are so embedded in their own social structure frameworks, they simply don’t have the models for all but the most intuitive observers (I’m personally partial to Matt Taibbi.)
Take the Gamestop Short story. There are lots of renditions, with increasingly accurate detail, but in brief, this is it. Wall Street firms called “hedge funds” buy shares of companies whose stock price they think will decline, then sell these shares in futures contracts, “shorting” the stock — saying they will present sometime in the future, with the amount of shares necessary to fulfill the contract. In a month, or whatever the term for the contract is, they have to show up with the promised shares (which they already sold) and return the actual shares to the people they promised they would deliver them to.
The big difference between this and a futures options contract is that when buying and selling options, your “exposure” — the cost of the risk for the futures deal going sour is limited to the price of your options. But when actually shorting a stock, you have to show up with the stock itself. So, if the price of the stock goes up in between when you sold the shares you bought (or said you bought) and when you need to deliver them, you’ve got to go out and buy those shares and deliver them. It’s NOT an option.
In the case of Gamestop, a group on one of the most popular social media sites on the web — Reddit — called WallStreetBets, started tracking the hedge fund raid on Gamestop, and encouraged its members to buy Gamestop and drive its price higher, fully aware of the fact that the stock was severely shorted. This drove the price far higher than when the hedge funds, who were originally shorting the stock, bought their initial position.
Thus screwing them.
There’s a whole loop in the story about the micro-stock facilitation company called Robin Hood, where many small traders buy stocks, was then called on to stop trading in stocks that the large Wall Street funds had shorted, thus protecting those brokerages from a similar kind of price run-up. That game is still afoot, as various federal agencies are involved, and there are better people to cover what is obvious elite fuckery in the whole shebang. That’s not the point of this piece.
The one thing I want to cover is this quote, from this piece from the BBC:
Wall Street commentators have called it a “phenomenon”, “insane”, and like “nothing [they’ve] ever seen”.
[An aside — every time I quote anything from the MSM, I can expect that it’s run through it’s own lower v-Meme filters which broadcast their own status-driven, extreme limbic triggering viewpoints — which is largely why we can’t discuss important, nuanced issues like COVID in the public arena. But for the sake of this piece, let’s assume this is true.]
So… restarting the conversation here — “nothing they’ve ever seen.”
Back up. I have two sons, 22 and 20. Both are ahead of the curve in any kind of generational aspect. The 22 year old is the nominal CTO of the decentralized web concern Unstoppabledomains.com. The 20 year old is a computer science student at University of Nevada-Reno. They live together, and regularly chide me on my relative backwardness as far as any larger global trends, relying on me to tell them things like how to get their car fixed.
Both young men populate the Reddit ecosystem. My younger son does some small-scale trading, and older son, since he is in the blockchain business, trades cryptocurrency online. But that’s not all that they do. One of the things they do is bet for fun — on all sorts of sports. They bet on various parleys of basketball games. But the most interesting one (by far) for someone like myself is that they regularly bet on Ukrainian ping pong.
You may think this is a joke — but it is not.
What is interesting is that younger son (age 20) does reasonably well betting on Ukrainian ping pong, with information that he captures on Reddit. Yes, there is a subReddit dedicated to Ukrainian ping pong. He sometimes loses money, sometimes makes money — but the short version is that he makes a small profit, and amuses himself greatly in the process. He’s not turning into a pathological gambler. And in the pandemic, where young people have been walled off from any meaningful life by their elders, that’s good enough for me.
Older son, enmeshed deeply in the blockchain/crypto business, has been trading for the last three years. He watches intently the moves of the crypto market, as it directly affects his business. Like his brother, he is on numerous Reddit and subReddit communities, trading information constantly. Considering that he is one of the real blockchain pioneers, it’s fascinating to watch the evolution of his own knowledge, as well as his product. When I asked him how he learned everything he knows that’s enabled him to create his company, he told me “Pops, adults read the manual.”
Those are words to make a teacher proud, but they’re not quite accurate. There is no manual to read. He pioneers information himself, of course. But he has other sources — like Reddit — where he regularly frequents, finds people to work on coding contracts for his business, and though he gives more than he gets, I’m sure he learns some things as well. When he was home for the summer, during quarantine, he occupied himself constructing stock market dashboards and algorithms for predictive trading. That was for fun.
One may a.) believe I’m bullshitting you about my kids (I’m not — see this piece on older son) or b.) not be able to understand this phenomenon at all. I’ll tell you though — it all started with video games. And I’m not talking about Space Invaders.
For those of us in my generation (I’m the tail-end of the Baby Boomers) how we learn was structured by our school environments. We went to class, the teachers (in my case, the good Catholic sisters) gave us assignments, and we went home, executed our homework, and handed it in. Our relational learning environment was structured around following rules, and completing work. Friendships, and more complex informal learning, were limited to Friday night football games, and smoking cigarettes and dope on the walk home from work. This was back in the day where, when we were younger, people might come over and play (I was always building things like rockets, and I had a large Erector set.) But mostly, gatherings were passive outside team sports.
That is not the world my kids were raised in. For them, they faced sterile, lifeless academic environments, where contact between the kids was carefully metered. The schools they attended, during the course of their tenure, became more and more closed, ostensibly with the reasoning behind protecting kids from getting gunned down inside the school. Instead of riding the bus, parents would line up in cars to both drop off and pick up their kids from school. And then there were the myriad structured athletic activities, as well as band (a local highlight.) It wasn’t all bad — it was just rigid in a way that no one on the inside of the school system could see. Needless to say, kids didn’t smoke cigarettes together next to the creek after school.
But young minds need creative flexibility. And they found it — with video games, like Halo, or Call of Duty, or Legend of Zelda. As time went on, these games became far more team-based. Actually, virtual team-based. They could play with friends not in the room to kill whatever space aliens du jour were threatening the known universe. And they were good at it.
In fact, it was amazing to watch. As a single parent, I attempted to get involved. I tried to learn how to manage the canonical game controller, but was really never successful. They, on the other hand, would go on to develop what I call “hyper-collaboration” skills with each other. In the context of the game, they could very quickly move from walking and engaging in friendly banter about their day (Yu-gi-oh and Pokemon cards) and then shift inside the virtual threat environment within milliseconds to killing some bad guy. They’d bark orders to each other, rearrange their team on the map, and blast the alien.
They’d also frequent bulletin boards to learn various hacks, get background information on some aspect of that game, or even watch videos of successful move sequences. And they’d comment, share and synthesize that information, in that relational environment, for goal setting.
Even our framing of the problem, or understanding the circumstances suffers. Someone in my age cohort might say “Independent action and decision making was encouraged.” That would be a limited perspective. In many of these environments, independent heuristic decision making, as well as rational assessment of gaming partners, was inherent. You might play with someone who you knew from school, that was a worse Halo player than you. But you also would calibrate the play environment so you could have fun. And it’s no fun playing with someone getting shot by a space alien and sidelined all the time.
In the parlance of this blog, video games force calibration of rational empathy on a running basis. Emotional empathy? Not so much — that still was developmentally driven, as well as a bit stunted by the rigid school environment. But the notion of discovery-driven learning was inculcated at an early age. As well as the ability to coordinate large-scale in online environments. It’s in their brain wiring.
Sound familiar? Or rather, what about considering how this might translated to another game — like the stock market? Large Massively Multiplayer Online Role-Playing Games (MMORPGs) are, to the newer generation, not much different.
And here’s the key — coordinated action learned in these environments are immediately transferred, in some subset of that population (not all!) to another big game that involves real stakes. Namely commodities and stock trading. As well as cryptocurrency.
Where our misunderstanding of the Gamestop phenomenon has come is assuming, just as we have with politics, that somehow our old models, which by and large are submerged in our unconscious, about how people learn and collaborate are valid. The very fact that my phone isn’t ringing off the hook (dating myself with that statement, eh?) is the key that the larger media space is clueless.
In the Gamestop situation, what emerged was a highly coordinated campaign NOT to take over an entire industry. Rather, it was a demonstration of power law dynamics and information concentration making coordinated collective action possible, on a short timescale. It wasn’t a mob acting like an uncoordinated mob. It was a coordinated effort with a structured network, weaving together high status players along with generalized knowledge with limited participation from a social network platform. We assume knowledge comes from an authority, and then everyone blindly follows that authority. In fact, it’s naturally assumed that this is the mode of action. THIS IS WRONG.
And it was turned against an elite bubble that have been playing what they had presumed was a de facto closed game, adding little value to society, save for migrating more money into their space. When those elites started losing at their own game, they started hollering to their v-Meme-matched partners — in this case, the federal government, where they had already bought controlling positions (gotta love the fact that Janet Yellen had recently taken an $800K check from Citadel, one of the hedge funds involved in the Gamestop debacle) . It was no surprise that the government sprang rapidly into action. They had not just been memetically aligned. They had been bought.
What is not being understood here at all is that this is not a one-off. These are classic Power Law information concentration dynamics, based on the social evolution of the actors and their ability to exchange information. (READ that piece for the entire explanation, then transfer argument to this space!) The initial players in the WallStreetBets group didn’t meet in isolation down at the local pub. They met in the open on a Reddit subgroup. I’m sure that the group, since establishing its winning position in this fight, has seen massive upswings in growth of membership. But this was no secret algorithm, which is the current cause célèbre among the intelligentsia on everything ostensibly wrong with social media. This was out in the open. The Internet has created the ability for memetic like to find memetic like. Some of these people are crazy — like the Qanon folks. Some are nihilistic anarchists, like the assorted nut jobs that stormed the Capitol.
But some are just plain smart kids, like my own. If you believe that you’re going to take apart the Internet just to maintain class privilege, that’s going to be a much harder task than people realize.
We have been engaged in an ongoing conflict with our young people in this country for the last 40 years. As a university professor, I’ve had a ringside seat. We’ve suffered a decline in the quality of education experience, and those of us in charge have been happy to explain it all away. Just in my microcosm, I’ve watched whole fields of young people now be required to take unpaid internships (read work-for-free) for a year just to gain “experience” so they can get a full-time position. We’ve rationalized stagnating the minimum wage, which, while it does affect all people, disproportionately affects the young. In the process of creating class-driven and generational stagnation, we’ve driven more and more into the military, and then shipped them off to never-ending wars on, quite literally, the other side of the planet.
How does anyone really think this is going to turn out? Peter Turchin, a professor at the University of Connecticut, and one of the founders of the field cliodynamics — modeling history with math, has theorized that it is large classes of 20-somethings without prospects that create social turmoil and potentially collapse. I find Turchin’s work interesting, and should write something on it. But you don’t have to look far to see that the lack of that age cohort to find meaningful work drives societal decay. In one of the more recent examples, the formation of the Islamic State (IS, ISIS) was driven through recruitment from the Russian Caucasus states as much as anything. Declining economic prospects, coupled with collapsing standards of living, left some percentage of young men looking for answers — which they found in the context of a dysfunctional, Dark Ages caliphate, complete with slavery. I read an article about a year ago about how Russia now must deal with the repatriation of young Dagestani men — in an area that is already under essential religious control.
Of course, we in the U.S. are bound up, intergenerationally, in this crazy game. As a 58 year old man, my retirement is in the stock market, and my security rests in rigging the game. Wall Street knows this, and has no problem exercising its power to maintain the boundaries of its bubble.
But there’s a bigger wake-up call here. The idea that the younger generation is just going to continue to take it might be false. We might see active disruption of many of the systems in this country.
But the worst case scenario is likely NOT that. The fact that they’ll continue to take it might actually be true. The idea that even what some might consider the “best case scenario” — we bank on the passivity of our young people so we can just eke our way through retirement — is fraught. We need young productive people, happy, and meeting partners. Or we won’t have any grandchildren. China has already run the experiment with that type of social control. And now their elder population is literally dying of loneliness, to the point where the Chinese government is actively punishing people that won’t go home to visit their parents.
I could keep writing — but I’ll stop. Here are the basics.
- The idea of unrelated, statistically independent information flows, driven by various authorities, is no longer valid.
- Geography is a poorly supported means of understanding how people organize, with limited, and rapidly fading validity. Geography assumes statistical independence of opinion – no longer relevant in the Internet Age.
- The causes of intergenerational conflict are both concrete (resource-driven/money) as well as information-driven – memetic.
- The Gamestop situation is just the beginning — because our children have been raised in far richer relational environments than we understand, or even consider. As we relate — so we think.
- This is actually an incredible opportunity — but we must understand ourselves.