It seems as if everybody is talking about GameStop.
The saga is just the latest episode in our continuing, quickening drama of financialized shareholder capitalism here in the United States.
And in the way it generated so much chaotic excitement, so many surprising twists and turns, it was not unlike an episode of the hit Netflix series, “Peaky Blinders.”
Tommy Shelby, protagonist of that show, is a master at turning disadvantage to advantage. He excels at the struggle, of organizing his followers to win at the game, even when the odds are stacked against them.
Like a horde of retail investors on Reddit.
In fact, the plot twists of Peaky Blinders and GameStop also seem to illustrate a peculiar concept developed by English mathematician John Conway called “The Game of Life.”
John Horton Conway studied everything from knot theory to combinatorial game theory. Back in 1970, he devised a simple game with which a player interacts by creating an initial configuration and observing how it evolves.
An excellent December, 2020, article on Conway in The New York Times describes the game as, “an elegant mathematical model of computation — a cellular automaton, a little machine, of sorts, with groups of cells that evolve from iteration to iteration, as a clock advances from one second to the next.”
The game is simple, but the results can be astonishing:
Place any configuration of cells on a grid, then watch what transpires according to three rules that dictate how the system plays out….The Game of Life motivated the use of cellular automata in the rich field of complexity science, with simulations modeling everything from ants to traffic, clouds to galaxies. New patterns continually emerge.
Simplicity, in other words, often spawns unpredictable complexity, like a Peaky Blinders episode or a surge in GameStop stock, and the manifold theories and narratives borne of them:
The extremely simple rules can give rise to the most complex and most unpredictable behavior possible. This means that there are certain properties of the Game of Life that can never be predicted, even in principle! In this moment in time, it’s important to emphasize that inherent unpredictability — so well illustrated in even the simple Game of Life — is a feature of life in the real world as well as in the Game of Life. We have to figure out ways to flourish in spite of the inherent unpredictability and uncertainty we constantly live with.
In a way, that last point describes Tommy Shelby’s entire life. And in some sense it also describes what 1,888,019 underestimated financial market gamblers on the subreddit WallStreetBets (WSB) did last week too (they call themselves “Degenerates”).
The hedge fund Melvin Capital never saw them coming.
As a recent piece on Epsilon Theory explains:
There is a lot of despicable and sophomoric language but mixed in there are some good ideas and some well-informed speculators. For every dumb post, there is (for example) a quality analysis of the SEC uptick rule and how its enforcement or lack thereof can impact a stock with more than 100% of free float outstanding.
In WSB lingo, strong hands are called “diamond hands” and weak hands are called “paper hands.” Profits are called “tendies” as in chicken tenders, as in the ultimate luxury food….
A lot of the memes and posts and culture are self-effacing, self-deprecating and traders brag just as much about huge losses as they do about huge gains. It’s ridiculous but much of what is on there is clearly real and it’s serious money being wagered, much of it borrowed money or entire 401ks.
Should we be surprised by this online maelstrom?
Recently, I suggested that time itself seems to be speeding up. A set of emergent phenomena seem to be hurtling time forward at an ever faster pitch, playing their own part in the game. As the aforementioned piece in The New York Times puts it:
Fifty years later, the misfortunes of 2020 are the stuff of memes. The biggest challenges facing us today are emergent: viruses leaping from species to species; the abrupt onset of wildfires and tropical storms as a consequence of a small rise in temperature; economies in which billions of free transactions lead to staggering concentrations of wealth; an internet that becomes more fraught with hazard each year.
Back in 2017, during a visit to South Africa, I proposed that the world is actually being ambushed by technology. The drama that unfolded last week on Reddit involving names like GameStop, Melvin Capital, and Citadel was part of this ongoing coup. Because now technology is empowering millions of homeshored retail investors.
And of course, of all the technologies influencing our world, none will play more of a starring role behind the scenes of tomorrow’s world than AI:
Looming behind it all is our collective vision of an artificial intelligence-fueled future that is certain to come with surprises, not all of them pleasant. The name Conway chose — the Game of Life — frames his invention as a metaphor. But I’m not sure that even he anticipated how relevant Life would become, and that in 50 years we’d all be playing an emergent game of life and death.
As the GameStop drama reached its blinding peak late last week, my alma mater, Colby College, announced the first cross-disciplinary institute for AI at a liberal arts college in the United States. The Davis Institute for Artificial Intelligence positions Colby as a national center for training both faculty and students in the use of AI and the creation of new systems and capabilities.
Because every institution has got to be prepared to adapt in order to survive, to change or perish.
Like Tommy Shelby, master at the game of life.
For a brief moment in time last week, millions of “Degenerates” on WallStreetBets, stuck at home during a pandemic, decreed a new order and became masters of the game of life, by – in the words of Andrew Ross Sorkin on Squawk Box – “putting the squeeze on traditional capitalism.”
Think about it. Although the GameStop drama wasn’t by order of the Peaky Blinders, it’s boldness and execution made it seem as if it could’ve been.
Every organization – from BPO and contact center systems company to cloud-enabled platform – needs to understand this.
Every individual needs to as well.
Because whether it’s a drone swarm that’s making traditional ways of war obsolete, or a swarm of degenerate traders on Reddit, the new system emerging is coming for all of us.
Image: by Netflix