Beware social media’s aggregating power
Small number of people can distort and disrupt public opinion online
The image of the little guy sticking it to the man is one of the enduring images of Western democracy. So recently, when a small number of retail investors on social news site Reddit began gaming the stock market — causing a hedge fund to lose billions and wildly enriching themselves in the process — it had all the makings of a great David vs. Goliath story.
What actually happened is a little more complicated than a neat Robin Hood narrative. And it also suggests that what social media has done to how institutions and the public interact isn’t as simple as giving power to regular folks — and that, rather, the web may force us to rethink democracy itself.
The story thus far goes something like this. Reddit is organized into topical subgroups, and on the irreverent section called WallStreetBets, people gather to chat about investing, usually of the risky, speculative sort. There, spurred by a mix of nostalgia, greed and an animus for hedge funds, redditors began buying up stock of video game retailer GameStop, which they noticed the professionals had heavily bet against using a technique called shorting. The surge of buying caused the price of the stock to jump exponentially, giving some Reddit users some obscene profits, while causing hedge fund Melvin Capital to take a bath.
The process has since been repeated with other sinking stocks — movie theatre chain AMC, BlackBerry, Nokia and more — and the reaction has been cacophonous. For many, this episode highlights that the stock market is essentially a casino, and rich players with access to hedge funds engage in the same sort of gaming that those on Reddit do. For others, this points to how social media can be used to distort markets and public opinion, and think that regulators should step in.
In fact, the truth is somewhere in between those positions. Yes, the GameStop kerfuffle is an indictment of modern capitalism and hedge funds. But it also points to how the aggregating power of social media allows a very small number of people to distort and disrupt.
Reddit itself is an odd beast, showcasing both the best and
the very worst of the internet. On the plus side, the site is littered with stories of users coming together to help an individual or rally around causes like net neutrality. Because it allows people to gather and aggregate their action, it can turn what was once scattered, individual effort into a powerful force.
That power in social media can have real and positive change. Consider last year’s renewed Black Lives Matter protests. The collective force of so many people agitating online helped the broader movement gain traction and change the popular consciousness. It is but one example; the MeToo movement, the fight to raise the minimum wage and trans rights are all recent, noble causes helped by the power of social media to turn individuals into a collective force.
But the notion of protest and activism has always functioned a little metaphorically — or, to be more specific, metonymically where a part stands for the whole. If five thousand people protest outside Queen’s Park, we take that to symbolize some broader feeling in “the public.” The same can be said for online movement. It’s why we see news media reporting on Twitter all the time: it’s an attempt to capture in miniature what the public is thinking at large.
But that metaphorical idea of the public can, in the digital era, easily be both misused and distorted. For one, the same aggregating power of social media can be used not for just activism, but to target harassment or to manipulate public events — everything from the funny, like naming a boat “Boaty McBoatface,” to gaming stocks, or even disrupting elections. Social media’s capacity to make small groups seem more powerful than they are upends the usual relationship between a public and its institutions.
In short, the metonymic way public discourse works is easily gamed by people online. For one, how are we to understand what “the people” are thinking when a small group can have an outsize influence on public chatter or the market at large. For example, the GameStop investors from Reddit represent a tiny fraction of people, some of whom are small time retail investors and some of whom are already comfortable. If this is supposed to be a post-2008 uprising against capitalist exploiters, it is a profoundly ambivalent revolution that showcases how easily the collective power of tech can allow a tiny group to deploy to various ends.
It leaves one asking: yes, it’s better than hedge fund managers manipulating markets for the rich, but is allowing a handful of people to influence markets really that much better? How are we to understand what the public is thinking if “the public” can change depending on the whims of a few users of a notorious social news site?
It is a difficult question because it reveals that change is a function of getting your views in front of power. It is, in fact, a question of attention, and the web has fundamentally changed how we related to that nebulous concept. Political strategists know this, lobbyists for big industry know this and, increasingly, bad actors online also know this, too.
Yes, in this instance, it’s fair to believe that the victory of redditors over a hedge fund is symbolically at least a victory for the little folks. But the web has mudded what separates David from Goliath, and unless we face the challenge of what digital technology has done to democracy, it may be increasingly hard to distinguish who one is even supposed to root for — that instead, public discourse will simply be a yelling match between who can most cleverly manipulate the market of ideas.