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The Memeification of American Capitalism
The Common Threads Between GameStop Mania and NFT Mania
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The Memeification of American Capitalism
The Common Threads Between GameStop & NFT Mania
In the early innings of the internet, internet culture reflected mainstream culture. As the internet matured and more people came online, internet culture and mainstream culture became a two-way mirror: each reflected, magnified, and distorted the other. Today, internet culture is the primary driver of culture; mainstream, offline culture is a reaction to what happens online.
My last two Digital Native pieces were on meme culture (Memes and the Atomic Units of Culture) and on how blockchain technology will unlock the creator economy (The Digital Renaissance). This week, I want to combine the two while also stepping back to reflect on this moment in time. This piece is less an analysis of one trend than a synthesis of several, as I try to make sense of the internet’s turbulent and fascinating start to the year.
From GameStop to Beeple, internet culture is seeping into corporate America. I’ve started characterizing this as “the memeification of American capitalism”.
This week’s thoughts are half-baked and I welcome any additional views, both in agreement and (especially) in disagreement. In the spirit of attempting a framework to organize my thoughts, I’ve identified two rough throughlines for what’s happening.
The Search for Belonging
The Reclaiming of Agency
Let’s take each in turn.
The Search for Belonging
Supreme, the streetwear brand, recently sold out of bricks. Supreme bricks are now reselling on StockX for $240.
Why would anyone pay hundreds of dollars when a brick retails for $0.50? Supreme’s entire business model is predicated on exclusivity breeding status. What’s crucial to understanding Supreme’s success (VF Corporation—the parent of Vans, North Face, and Timberland—bought Supreme for $2 billion last fall) is understanding how it taps into the human desire to be part of a community. By buying $240 bricks, you’re buying status, but you’re also buying belonging.
This isn’t anything new. Anyone who braved Abercrombie’s cologne-infused, tomb-like stores to buy overpriced shirts (guilty as charged) understands the concept of community-driven consumption. People buy things to be part of the in-crowd, to gain access to an exclusive community. Status and community go hand-in-hand.
The internet accelerated community formation: it’s both easier than ever to find community, and there are infinitely more groups to aspire to be part of. This has had the side effect of creating a loneliness epidemic: 3 out of 5 Americans report being lonely, with one study finding a 13% jump in loneliness from 2018 to (pre-COVID) 2020. That’s only been exacerbated by the pandemic.
This lens—growing loneliness and a search for belonging—is an interesting lens through which to view the rise of NFTs. Last week, on the same day that Beeple sold his Everydays work for $69 million, Figma co-founder and CEO Dylan Field sold CryptoPunk #7804 for $7.5 million. CryptoPunks are unique, algorithmically-generated characters. Each is 24 pixels by 24 pixels.
CryptoPunk #7804 is a green alien smoking a pipe:
Dylan originally bought #7804 in 2018 for $15,000. Explaining why he sold #7804 (for a 500x return), he framed art as community:
“What is art? You might say that the CryptoPunks art piece is the algorithm used to generate the punk. Or you might say it’s the individual punk. But the actual art piece is the CryptoPunks community.”
The value of the art is in the value of the community. This is fascinating, and I think it gets to the heart of NFT mania (and much of media and commerce). People buy products and consume content to be part of something. It seems absurd to read about the $600,000 sale of a GIF of a cat with a cherry poptart for a body, flying through outer space and leaving behind a rainbow trail. That sentence reads like a bad Mad Lib. It seems (slightly) less absurd when you view it in the context of human nature and our desire to belong. Yes, owning art may be about a love of the work or the artist. Yes, part of it is certainly about status. But there’s also a meaningful component that’s about the desire to be part of a community, movement, moment.
The 2020s will be driven by this search for belonging, a reaction to the arms-length and performative and inauthentic online interactions of the 2010s. Consumer companies like Discord, TikTok, and Clubhouse are all built around the idea of community; enterprise companies like Figma, Airtable, and Notion also have vibrant communities.
The zeitgeist is increasingly driven by a sense of community. The WallStreetBets subreddit and the GameStop craze is one example (more on that below). Another example is in how creator fanbases form and behave and grow. MrBeast is the 2nd-highest-paid YouTuber in the world, earning $24 million last year with 55 million subscribers. Much of what he does is around cultivating community:
This tweet propelled “Finger on the App” to #1 in the App Store. People participate because they want to be part of something and have a shared experience. It’s a chance to belong. The other piece—of course—is that they’re scrappy and ambitious and want the opportunity to get really rich. That brings us to the second throughline: reclaiming agency.
The Reclaiming of Agency
“This is the first time we all literally get to decide our destiny.”
That’s a comment on the subreddit r/WallStreetBets, the focal point of January’s GameStop craze—the movement where Main Street kneecapped much of Wall Street. GameStop and WallStreetBets are a fascinating case study of how a younger generation is revolting against the bastions of American capitalism, armed with memes and internet forums.
These are kids who grew up watching their parents struggle in the aftermath of the Great Recession. They’re skeptical of institutions and the elite. Their families, after all, worked within “the system” and were promised good lives and stable jobs—until those promises disintegrated under Wall Street’s greed.
Albert Einstein once said that compound interest is the most powerful force in the universe. Not in 2020, when interest rates hover around 0%. American capitalism used to be built on the expectations of affordable education, homeownership, and compounding savings to create a nice nest egg for retirement. For many Gen Zs, this form of capitalism is an illusion or outright lie.
We’re just beginning to see the ripple effects of the financial crisis, as young people come of age with a radically different worldview than older generations. These people aren’t interested in traditional career paths or in “renting” their time; they’re much more interested in using their hustle and savvy to dictate their own futures.
They trade Millennial idealism for shrewdness and practicality.
Many young people feel a loss of control, and they want to reclaim their agency. We see this in WallStreetBets and Robinhood traders. We see it in the hype around buying and selling Bitcoin, and now around NFTs. This shift is driving the disaggregation of work, as people freelance in pursuit of more independence: they’re TikTok creators or PopShop sellers or Metafy gaming coaches. An emerging set of platforms enables these new, more self-actualizing careers.
This is all a reaction to the system—to record student debt and foreclosures and decades of being oppressed by centralized authorities and broken capitalism. People are thinking from first principles. They’re asking, why would I rent out my time to this megacorporation—that might let me go at any moment—when I could be my own boss and determine my own fate? (That question gets even more pressing when they realize the average CEO-to-worker compensation is 320-to-1, up from 21-to-1 in 1965.)
This stick-it-to-the-man ethos will drive more entrepreneurship, both in the traditional sense and in the form of the burgeoning creator economy. Innovative companies and founders will also rework the economics. Airbnb let hosts participate in the IPO. Wes and Gagan at Didactic opened their seed round to anyone who had at least $100 to invest. This week, Sahil Lavingia announced a similar plan at Gumroad.
In the coming years, we’ll see technology obfuscate the institutions of corporate America. As I wrote about last week, NFTs and social tokens will remove gatekeepers and unlock more equitable value creation and capture. Just as workers are now questioning “the system”, creators will start to question why intermediaries monopolize value. In what world—for instance—is it fair or right that record labels own an artists’ work into perpetuity? This construct will change.
Companies like Zora are building the rails for this new creator economy. We’ll see the continued memeification of capitalism, the financialization of culture: just as you can trade stocks, you’ll be able to trade any unit of culture. NFTs are the early innings, and this movement will be propelled by the same ethos behind GameStop. Corporate America and the current model of capitalism are in for a reckoning.
Chris Dixon famously said, “The next big thing will start out looking like a toy.” This is meme culture—it’s GameStop and NBA Top Shot and a cat with a cherry poptart body. It seems silly and trivial, and American capitalism’s centers of gravity will dismiss it as a joke. We’ve already seen this with Wall Street’s reaction to r/WallStreetBets as “youth antics”.
But meme culture embodies an entire generation that’s coming of age allergic to centralized authorities and gatekeepers. Today’s power brokers remain flatfooted, unprepared for what’s to come. The events of the past three months are harbingers of a huge upheaval of American capitalism that (if successful) will lead to a massive redistribution of concentrated wealth and power.
The rejection of traditional American capitalism becomes more evident the more you look. It’s there politically, in the youth’s support of Bernie Sanders. It’s there culturally, in the backlash to Gal Gadot’s tone-deaf “Imagine” video. It’s there financially, in the deification of Elon Musk and in the $5 billion market cap of Dogecoin.
People are reacting to a broken system and they’re turning to grassroots communities to do so. The 2020s will be shaped by these cultural forces—the search for belonging and the reclaiming of agency—and where they intersect to take down centralized power and build a new architecture for American capitalism.
Sources & Additional Reading
The GameStop frenzy says more about Gen Z than Wall Street | Luke Lyman, Deseret
GME, Doge, Supreme: How Getting Rich Went Full Internet | Felix Salmon, WealthSimple
The Financialization of the American Elite | Sam Long, American Affairs
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