When in 2008 I heard that Lehman Brothers collapsed, and thousands of its staff were laid off, I allowed myself a fantasy. I imagined that one of the laid off financial engineers, whom for some reason I named Esmeralda, would turn into a dissident. That, incensed with the way she had been discarded by the same bosses who had enticed her into a lucrative career making weapons of mass financial destruction, Esmeralda would contact people like herself to form the Crowdshorters. Their purpose? To stop the central banks from bailing out the investment banks and the hedge funds by targeting, or ‘shorting’, the structured derivatives that had brought the calamity of 2008 upon an unsuspecting world – instruments like the CDOs that the authorities were trying to resuscitate.
In my fantasy this is how the Crowdshorters would do it: Using their financial expertise, Esmeralda and her comrades would look inside derivatives crucial to the survival of large banks and hedge funds with a view to identify the payments whose delay would cause the derivatives to lose value. Then, they would approach the people who were due to make these payments (e.g. a water bill, an insurance premium) and plead with them to delay the payment. As for any late payment fee incurred, the Crowdshorters would compensate them with money already crowdsourced with small donations from millions of common people desperate to punish bankers and hedge funds.
Back then, in 2008, as the spirit of Occupy Wall Street soared, I was convinced that millions would be eager to be part of such a well-orchestrated, rolling crowdshorting assault on the repulsive financiers. The key to the fictitious movement’s potential success was the Lilliputian Principle: each making a tiny sacrifice which, multiplied by millions of participants, is enough to bring capitalism down – or, at least, to prevent the American and European authorities from bailing out the bankers at the expense of the many.
More recently, I decided to retrieve my fantasy and to incorporate it in ANOTHER NOW: Dispatches from an alternative present – a political science fiction novel. (*) And that’s where I thought the story would end. Until a few days ago, I received a message from an American reader that read: “Are you following the GameStop saga? Your Crowdshorters have been in action!” It was a gross exaggeration. Nevertheless, elements of my fantasy were in evidence.
What had apparently transpired was that, over a couple of days, 4.4 million people used a Reddit page to coordinate their modest individual purchases of GameStop shares with a view to bankrupting two Wall Street hedge funds which were shorting those same shares. In short, the crowd attempted to short the shorters. And they succeeded, causing both hedge funds to file for bankruptcy! That’s where the similarity with my Esmeralda’s Crowdshorters ends. The Reddit crowd were not targeting capitalism in general and most of them were profit seekers. Nevertheless, many of them were driven also by an ethical drive to ‘sock it’ to the hedge funds. At the end of the day, while the GameStop incident was not a revolutionary moment, it did point to new forms of collective action for the 21st Century. One day, maybe we shall look back on it as the equivalent of 19th Century’s trades unionism.
(*) ANOTHER NOW will be soon published in German by Kunstmann. Also, you may watch an intimate presentation of the motivation that led me to writing it here.
For Der Freitag’s site, click here.