Hostname: page-component-8448b6f56d-mp689 Total loading time: 0 Render date: 2024-04-23T10:05:43.472Z Has data issue: false hasContentIssue false
  • English
  • Français

The market and the masses: From chaotic corners to social media (re)tail events

Published online by Cambridge University Press:  09 November 2023

Kristian Bondo Hansen
Kristian Bondo Hansen*
Affiliation:
Copenhagen Business School Denmark
*
Corresponding author: Kristian Bondo Hansen, Department of Management, Society and Communication, Copenhagen Business School, Dalgas Have 15, 2000 Frederiksberg, Denmark. Email: kbh.msc@cbs.dk.
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

In this essay, I examine and discuss the relationship between the market and the masses in light of recent retail-driven surges in the stock prices of firms like GameStop and AMC. Using two historical snapshots, I draw out similarities and differences between the way the collective power and rationality (or lack thereof) of the masses was portrayed in late-nineteenth and early-twentieth-century market literature and in recent debates about retail investor inclusion and social media or social trading platform-driven market volatility. The main difference between the historical discourse and the present situation is that the new digital market-expanding technologies enable effective retail investor mobilization and thus, increase the retail swarms’ market-moving powers, which were previously less agile and forceful. However, eased and widened market access also transforms digital life into alternative data that is subjected to age-old strategies of market exploitation.

Keywords

Financial marketsretail investingmassesGameStop
Type
Essay
Information
Finance and Society , Volume 8 , Issue 1 , 2022 , pp. 67 - 77
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This is an Open Access article, distributed under the terms of the Creative Commons Attribution-NonCommercial-No Derivatives licence (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits noncommercial re-use, distribution, and reproduction in any medium, provided the original work is unaltered and is properly cited. The written permission of Cambridge University Press must be obtained for commercial re-use or in order to create a derivative work.
Copyright
© 2022 The Author(s)

References

Beunza, D. and Stark, D. (2004) Tools of the trade: The socio-technology of arbitrage in a Wall Street trading room. Industrial and Corporate Change, 12(2): 369–400.CrossRefGoogle Scholar
Biers, K. (2011) Frank Norris's common sense: Finance as theatre in The Pit. Textual Practice, 25(3): 513–41.Google Scholar
Borch, C. (2012) The Politics of Crowds: An Alternative History of Sociology. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Borch, C. (2020) Social Avalanche: Crowds, Cities, and Financial Markets. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Brignall, M. (2021) How GameStop traders fired the first shots in millenials’ war on Wall Street. The Guardian, 30 January. Available at: <https://www.theguardian.com/business/2021/jan/30/how-gamestop-traders-fired-the-first-shots-in-millenials-war-on-wall-street>. Accessed 12 February 2021..+Accessed+12+February+2021.>Google Scholar
Calhoun, G. (2021) GameStop, the second surge: Anatomy of a ‘gamma swarm’. Forbes, 10 March. Available at: <https://www.forbes.com/sites/georgecalhoun/2021/03/10/gamestop-the-second-surgeanatomy-of-a-gamma-swarm/?sh=3bb9eb9f4225>. Accessed 30 November 2021..+Accessed+30+November+2021.>Google Scholar
Cassidy, J. (2021) The GameStop stock saga is dangerous and all too familiar. The New Yorker, 28 January. Available at: <https://www.newyorker.com/news/our-columnists/the-gamestop-saga-is-dangerous-and-all-too-familiar>. Accessed 20 November 2021..+Accessed+20+November+2021.>Google Scholar
CME Group (2021) CME Group to permanently close most open outcry trading pits; Eurodollar Options Pit will remain open. 3 May. Available at: <https://www.cmegroup.com/>..>Google Scholar
Cronon, W. (1991) Nature's Metropolis: Chicago and the Great West. New York: W.W. Norton & Co.Google Scholar
Fetter, F. (1904) The Principles of Economics. New York: The Century Co.Google Scholar
Fisher, I. (1907) The Rate of Interest: Its Nature, Determination and Relation to Economic Phenomena. New York: MacMillan.Google Scholar
Gensler, G. (2021) Testimony before the House Committee on Financial Services. 6 May. Available at: <https://www.sec.gov/news/testimony/gensler-testimony-20210505>. Accessed 21 December 2021..+Accessed+21+December+2021.>Google Scholar
Goldin, I. (2021) How herd behaviour drives action on r/WallStreetBets. Financial Times, 10 February. Available at: <https://www.ft.com/content/971df303-726a-4bdf-93eb-9a9e848f7109>. Accessed 9 December 2021..+Accessed+9+December+2021.>Google Scholar
Handel (2021) The material politics of finance: The ticker tape and the London Stock Exchange, 1860s-1890s. Enterprise & Society. Online first, https://doi.org/10.1017/eso.2021.3.CrossRefGoogle Scholar
Hansen, K.B. (2017) Crowds and Speculation: A Study of Crowd Phenomena in the U.S. Financial Markets 1890 to 1940. Doctoral thesis (PhD), Copenhagen Business School.Google Scholar
Hansen, K.B. (2021) Financial contagion: Problems of proximity and connectivity in financial markets. Journal of Cultural Economy, 14(4): 388–402.CrossRefGoogle Scholar
Hansen, K B. and Presskorn-Thygesen, T. (2021) On some antecedents of behavioural economics. History of the Human Sciences. Online first, https://doi.org/10.1177/09526951211000950.CrossRefGoogle Scholar
Hansen K.B. and Borch C. (2022) Alternative data and sentiment analysis: prospecting non-standard data in machine learning-driven finance. Big Data & Society. Online first, https://doi.org/10.1177%2F20539517211070701.CrossRefGoogle Scholar
Jones, E.D. (1900) Economic Crises. New York: Macmillan.Google Scholar
Kaplan, C. (1953) Norris's Use of Sources in The Pit. American Literature, 25(1): 75–84.CrossRefGoogle Scholar
Kolhatkar, S. (2021) Robinhood's big gamble. The New Yorker, 10 May. Available at: <https://www.newyorker.com/magazine/2021/05/17/robinhoods-big-gamble>. Accessed 30 November 2021.. Accessed 30 November 2021.' href=https://scholar.google.com/scholar?q=Kolhatkar,+S.+(2021)+Robinhood's+big+gamble.+The+New+Yorker,+10+May.+Available+at:+.+Accessed+30+November+2021.>Google Scholar
Komporozos-Athanasiou, A. (2022) Speculative Communities: Living with Uncertainty in a Financialized World. Chicago, IL: University of Chicago Press.CrossRefGoogle Scholar
Langley, P. and Leyshon, A. (2021) The platform political economy of FinTech: Reintermediation, consolidation and capitalisation. New Political Economy, 26(3): 376–88.CrossRefGoogle Scholar
Latour, B. and Lepinay, V.A. (2009) The Science of Passionate Interests: An Introduction to Gabriel Tarde's Economic Anthropology. Chicago, IL: Prickley Paradigm Press.Google Scholar
Lazzarato, M. (2004) From capital-labour to capital-life. ephemera, 4(3): 187–208.Google Scholar
Le Bon, G. (1896) The Crowd: A Study of the Popular Mind. New York: MacMillan.Google Scholar
Le Bon, G. (1899) The Psychology of Socialism. New York: Macmillan.Google Scholar
Leach, E.E. (1986) Mastering the crowd: Collective behavior and mass society in American social thought, 1917-1939. American Studies, 27(1): 99–114.Google Scholar
Leach, E.E. (1992) ‘Mental epidemics’: Crowd psychology and American culture, 1890-1940. American Studies, 33(1): 5–29.Google Scholar
Lefèvre, E. (1901) A break in turpentine. McClure's Magazine, April: 539–50.Google Scholar
Leonard, T.C. (2005) Retrospectives: Eugenics and economics in the Progressive era. The Journal of Economic Perspectives, 19(4): 207–24.Google Scholar
Levy, J. (2012) Freaks of Fortune: The Emerging World of Capitalism and Risk in America. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
Los Angeles Herald (1898) Leiter's Story: He tells how he lost six millions in wheat. LA Herald, 15 June.Google Scholar
Marcosson, I.F. (1909) The perilous game of cornering a crop: The famous wheat deals in which ‘Old Hutch’, P.D. Amour, and Joseph Leiter were the leading figures. Munsey's Magazine, September: 868–76.Google Scholar
Marcosson, I.F. (1913) The passing of the plunger. Munsey's Magazine, April: 3–13.Google Scholar
Martin, K. and Wigglesworth, R. (2021) Rise of the retail army: The amateur traders transforming markets. Financial Times, 9 March. Available at: <https://www.ft.com/content/7a91e3ea-b9ec-4611-9a03-a8dd3b8bddb5>. Accessed 28 June 2021..+Accessed+28+June+2021.>Google Scholar
Michaels, D. (2021) GameStop Mania is focus of federal probes into possible manipulation. Wall Street Journal, 12 February. Available at: <https://www.wsj.com/articles/gamestop-mania-is-focus-of-federal-probes-into-possible-manipulation-11613066950>. Accessed 19 December 2021..+Accessed+19+December+2021.>Google Scholar
Norris, F. (1920) The Pit. New York: Doubleday, Page & Co.Google Scholar
Pardo-Guerra, J.P. (2019) Automating Finance: Infrastructures, Engineers, and the Making of Electronic Markets. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Park, R.E. (1904) Masse und Publikum: Eine methodologische und sociologische untersuchung. Bern: Buckdrukerei Lack & Grunau.Google Scholar
Park, R.E. (1915) The city: Suggestions for the investigation of human behavior in the city environment. American Journal of Sociology, 20(5): 577–612.CrossRefGoogle Scholar
Pigou, A.C. (1912) Wealth and Welfare. London: Macmillan.Google Scholar
Pinzur, D. (2021) Infrastructural power: Discretion and the dynamics of infrastructure in action. Journal of Cultural Economy, 14(6): 644–661.CrossRefGoogle Scholar
Ross, E.A. (1908) Social Psychology: An Outline and Source Book. New York: Macmillan.Google Scholar
Scott, B. (2021) The real lesson of the GameStop story is the power of the swarm. The Guardian, 30 January. Available at: <https://www.theguardian.com/commentisfree/2021/jan/30/gamestop-power-of-the-swarm-shares-traders>. Accessed 20 February 2021..+Accessed+20+February+2021.>Google Scholar
SEC (2021) Staff report on equity and options market structure conditions in early 2021. US Securities and Exchange Commission. Available at: <https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf>. Accessed 20 February 2021..+Accessed+20+February+2021.>Google Scholar
Smith, R.E. (1901) The mighty river of wheat. Munsey's Magazine, April: 17–30.Google Scholar
Smith, R.E. (1908) Wheat Fields and the Markets of the Worlds. Saint Louis, MO: Modern Miller Co.Google Scholar
Stäheli, U. (2013) Spectacular Speculation: Thrills, the Economy, and Popular Discourse. Stanford, CA: Stanford University Press.CrossRefGoogle Scholar
Sumner, W.G. (1907) Folkways: A Study of the Sociological Importance of Usages, Manners, Customs, Mores, and Morals. Boston, MA: Ginn & Co.Google Scholar
Tarde, G. (1902a) Psychologie Économique. Tome Premier. Paris: Félix Alcan.Google Scholar
Tarde, G. (1902b) Psychologie Économique. Tome Second. Paris, France: Félix Alcan.Google Scholar
Tarde, G. (1903) The Laws of Imitation. New York: Henry Holt & Co.Google Scholar
Tarde, G. (1968) Penal Philosophy. Boston, MA: Little, Brown, & Co.Google Scholar
Tarde, G. (2007) Economic psychology. Economy and Society, 36(4): 614–43.CrossRefGoogle Scholar
Tett, G. (2021) Meme mania is reshaping US markets. Financial Times, 9 December 2021. Available at: <https://www.ft.com/content/505ce28d-3b46-4f53-8e7e-0262bba11d2e>. Accessed 20 December 2021..+Accessed+20+December+2021.>Google Scholar
van der Heide, A. and Zelinsky, D. (2021) ‘Level up your money game’: An analysis of gamification discourse in financial services. Journal of Cultural Economy, 14(6): 711–31.CrossRefGoogle Scholar
Weber, M. (2000a) Commerce on the stock and commodity exchanges [Die Börsenverkehr]. Theory and Society, 29(3): 339–71.Google Scholar
Weber, M. (2000b) Stock and commodity exchanges [Die Börse (1894)]. Theory and Society, 29(3): 305–38.Google Scholar
Westermeier, C. (2020) Money is data: The platformization of financial transactions. Information, Communication & Society, 23(14): 2047–63.CrossRefGoogle Scholar
Zimmerman, D.A. (2006) Panic! Market, Crisis & Crowds in American Fiction. Chapel Hill: University of North Carolina Press.Google Scholar