Feb 1, 2021
The media was full of talk of the run-up in the price of the stock of GameStop and a few other companies like AMC. GameStop stock went from $17 to $483 in a matter of days.
The media emphasized that this cost some big hedge funds billions of dollars. These giant investors had bet that the stock price would go down. And by betting against the stock price, called “short selling,” the hedge funds were not just counting on a collapse of these companies—they were encouraging it. Capitalists running similar games contributed to the destruction of Toys “R” Us, Sears, and other companies.
When the price went up instead of down, these hedge funds lost on their bets—to the tune of billions of dollars. They seemed to have been beaten at their own game, for once.
This was presented as a major victory by the “little guys” against giant hedge funds. The papers made a big deal of the fact that many small investors drove up the stock price, and that the main stock trading website used by these small investors is called “Robinhood.”
Of course it would be nice to see the underdog win at the casino once in a while. But everyone knows that, in the end, the house always wins.
For one thing, all the talk of small investors aside, other high rollers are the ones making the real money. They made it as these stocks went up—and many are already placing bets on the inevitable crash. As always, we can be sure that most small guys will ultimately be fleeced to the benefit of the high rollers. That’s what the casino is for, after all.
For another, the big hedge fund guys immediately went about trying to make sure they couldn’t be played at their own game this way in the future. The stock trading site Robinhood even stopped people from buying GameStop stock when it went up too much—some speculate because Robinhood is itself linked to one of the giant hedge funds.
And what did GameStop or AMC workers get out of all of this? The same low wages and job uncertainty they’ve always gotten.
The casino they call the stock market is set up to benefit those who already have the money.
Workers’ power doesn’t come from the rare chance to win a hand, but from the fact that we create all the wealth they are gambling with. It’s in our power not only to choke them off, but replace them entirely.