How Lulz Took Down Wall Street

r/WallStreetBets delivered cybernetic karma to those who deserve it

Photo: JIM WATSON/AFP/Getty Images

As the hedge fund billionaires suffering catastrophic losses in the r/WallStreetBets activist campaign now realize, we reap what we sow. Even more so in a digital age.

Norbert Wiener tried to warn us way back in the 1950s that digital technologies would be cybernetic in nature. They do not function in the straight linear fashion of the Industrial Age with its assembly lines, unidirectional drive toward progress, and growth-based capitalism. No, the world of cybernetics is a world of feedback loops — like the cycles of a computer. Call and response. Everything comes back, like karma. And though for a while it looked like digital technology was just going to accelerate that relentless drive toward infinite wealth for the few, feedback has finally kicked in, and the digital revolution so many of us have been waiting for may, at last, be here.

First off, we have to remember that migrating the markets to the internet was a bad idea in the first place. Media environments tend to determine a whole lot more about the way things function inside them than we like to believe. Initially, the tools help us do the things we want to do more efficiently. But then, we start to change our behavior to meet the needs of the tools. And eventually, the tools take over, making our decisions for us. It’s one big system, where people may as well be bots. Most hedge fund billionaires I’ve met really don’t make decisions anymore, beyond whom to hire to write their algorithms. The only ones who maintain any autonomy at all in these systems are the hackers and gamers — like the ones currently invading the marketplace to save the memetically appropriate company GameStop.

Indeed, the elite put business, politics, and eventually finance inside a video game. Now, we’re playing it. I wrote my dissertation about this 10 years ago when it still looked like digital trading platforms would remain one step ahead of human players. The discount brokers built online platforms that simulated the screens of professional brokers, encouraging retail users to day trade and play with options. As studies showed, the more frequently retail traders transacted, the more money they lost — and the more fees the platforms collected.