Plato’s Cave & Reddit Feeds

In just a few days, a subreddit did more to screw Wall Street than Occupy Wall Street did in years.

Pretty wild.

It’s even sort of inspiring that an organized group of plebeians could manipulate a major institution managed by a patrician class. That said, the GameStop/AMC story is getting a lot of attention primarily because money is at stake. People have been organizing like this on the internet for a long time, and what happened to Wall St. this week has already happened to the media, and that has backfired in a big way. It’s too early to tell how message boards and manipulated signals will impact financial markets over the long-term, but if media is any analog, perhaps we should be careful.

Consider how we get our information today.

First, we are each convinced to share our views and interests, and we’ll do so for free (we are the useful idiots who make distribution platforms like Facebook and Twitter profitable). So instead of paying journalists to produce quality content and paying editors to validate information according to its veracity, the information platforms have us as reporters, and an algorithm that validates (and rewards) information according to its popularity.

“What are people clicking on the most?”

“What do they share the most?”

“How many likes? And by whom?”

“These people have this in common…”

And we’re off to the races.

The trouble is that the answers to the above questions are asked at an individual and small-group level, not a macro societal level and without the fact-checking part. This has fundamentally changed the media incentive. We no longer reward good reporting, but achieving attention (“OMG I went viral! I’ve gained so many followers!). And once your attention is earned, the algorithm is designed to get you to engage — to like or share or comment. As you give off these signals, the technology learns and reacts — it optimizes to give you more of what pulled you in. More relevant content = more engagement. More likes = more dopamine bursts. And on it goes.

Not unlike the subreddit that broke Wall Street this week, entire group message threads exist solely to make tweets go viral — to manipulate the signals that the algorithms use to make decisions. This coordination is how you get QAnon and “Sandy Hook was a false flag” and other conspiracy theories to bleed out from the fringes and into mainstream consciousness. (It’s also apparently how you can trigger a short squeeze on retail stocks from a Reddit feed…)

Some folks see this as a good thing. After all, if you’re into hockey then being served more hockey content is preferred over getting served a bunch of tennis content. However, the algorithms are not designed for perfect 1:1 correlations, but 1:many covariances. For example, if you are a mother who has shown interest in homeschooling, it’s likely that you will be targeted with content related to the dangers of GMO foods. Say you’re curious and explore the topic. Next, it’s likely you will begin to see “related content” about vaccine dangers, which, if effective in drawing your interest, will produce adjacent content about chemtrails, which in turn will profile you for conspiracy content from QAnon.

It’s a slippery slope, and the entire experience will feel quite organic and natural — easy, even. Hell, you were likely just passing time at the end of a long day by scrolling through your News Feed when it happened. But along that surprisingly common and easy journey into Crazyland, people lose their tolerance for complexity and nuance, and begin to opt in to black and white worldviews that easily clash with reality.

As Antonio Garcia Martinez put it, “social media and markets are merely the shadows in Plato’s cave which reflect forms that actually live in some Signal group or Discord server somewhere.”

Perhaps the democratization of Wall St. will change the power structure of capital, or at least open people’s eyes to the easy manipulation of money — I hope so. But I can’t help but consider how the once-celebrated democratization of information has rendered truth impotent.

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