A recent event that caught many by surprise was a short squeeze in Gamestop. Several hedge funds, including Melvin Capital, had big short positions that came under intense pressure when a group of buyers emerged via a subreddit called Wallstreetbets. The stock shot up to crazy valuations and eventually plummeted back down. Along the way the hedge funds nearly went under and the popular trading app Robinhood suspended trading in Gamestop, which in turn fueled a narrative that Wall Street was bailing out their own at the expense of the everyday people who had bought the stock.
I am not going to try and sort out the details of what happened here as there are many wrinkles but simply want to point out that anyone who had read Martin Gurri’s excellent book The Revolt of the Public would not have been surprised. Gurri, who was an analyst at the CIA, presents a compelling thesis around the breakdown of authority and illustrates it with many events from around the world. The book was originally published in 2014 and anybody reading it then might still have thought that Gurri was overreaching, but the election of Trump to President is a perfect further illustration of Gurri’s thesis. I recommend buying the recent edition by Stripe Press, which includes additional material by Gurri, including commentary on Trump. Furthermore I suggest following Gurri on Twitter and checking out his blog The Fifth Wave.
In compressed form Gurri’s thesis can be stated as follows: we are living through a global crisis of authority because elites, used to hierarchical control of the narrative, are finding themselves confronted by an unruly public that leverages information networks. Gurri provides many excellent examples from around the world of how this conflict winds up undermining authority and opens the door for a dangerous nihilism. Instead of rehashing those, let me instead use the COVID-19 crisis to illustrate the thesis.
Early during the crisis elites tried to control the narrative via institutions such as the CDC and the WHO. But it was a complex situation and some of the early communication was quite off, with both of these agencies saying that people shouldn’t buy masks. It’s hard to know how much of that was simply being wrong or whether it was intentionally trying to avoid a mask shortage. Whatever the case may be, lots of people on the internet (myself included) quickly pointed to the mounting evidence that the virus was airborne and that consequently everyone should wear masks as one countermeasure.
The reaction from the institutions to such criticism from below is also central to Gurri’s thesis. Instead of treating it as legitimate, the agencies were dismissive of critics based on traditional notions of hierarchy, such as whether or not the individuals had any credentials such as being a professor of epidemiology. Much of the mainstream media also engaged in this institutional response, often showing outright disdain for anyone deemed to be an “amateur.”
Of course in retrospect we know that the early call for masks by amateurs was correct and the institutions were wrong. Gurri’s thesis doesn’t suggest that the public is always right, quite to the contrary Gurri worries that the public is often inclined to a position of pure negation bordering on and sometimes entering outright nihilism. But the key point is that the authorities have lost control of the narrative and at times the result is that their narrative is exposed as deeply flawed. Much of this is the result of a more fundamental issue: the belief that complex systems can be steered on a narrow path in the first place (e.g. the economy through interventions by the Federal Reserve). By now it should be clear that the Reddit-organized shortsqueeze of my introductory paragraph is another example of this conflict.
So the crisis of authority is one of a narrative that’s been shown to be wrong on many occasions and is no longer controlled the way it used to be in the age of mass media. The net result is an all time low trust in existing institutions across the board, including not just government but also mass media and academia. That leads to an important question: how can society function when its institutions are moribund? While Gurri’s analysis up to this point is outstanding his recommendation as to what might be done feels lightweight and tacked on. I for one would have been perfectly fine without the last chapter. Conversely I would be excited for Gurri to write an entire book about potential solutions, even though by his own admission he feels more comfortable in the analytical mode.
All in all, if you want to understand our current predicaments better, I highly recommend that you read Revolt of the Public.
