In early 2009, CNBC analyst Rick Santelli erupted into a rant against bailing out people who made poor financial decisions, including a now-famous call for a Tea Party to protest the unfairness evinced by the prospect of using taxpayer money for such purposes. Activists across the country heeded his call and began organizing the Tea Party movement that would later sweep the nation.
A similar watershed moment may have occurred when venture capitalist Chamath Palihapitiya took to CNBC last week to vigorously defend the Redditors of “r/wallstreetbets,” who had catalyzed short squeezes on hedge funds. In short, the professional investors at the hedge funds bet that certain stock prices would go down and “r/wallstreetbets” forced the prices up, most notably with GameStop, leaving some funds scrambling to avoid collapse. While this incident is a blip in the grand scheme of the stock market, it serves as a socio-political harbinger of what the future may look like as technology and the free exchange of information radically alter society. In that vein, we may look back at Palihapitiya’s fiery interview as the moment when technopopulism entered the mainstream. Broadly, technopopulism applies the venture capitalist mindset of focusing less on ideology, having greater tolerance for risk, extensively using trial and error and relentlessly seeking progress of politics and public policy.
As Martin Gurri notes in his prescient book “The Revolt of the Public,” changes in communication and information technology, such as the internet and social media, have fundamentally upended the old way of organizing society dating back to the Industrial Age. The institutions of this bygone era—government agencies, Wall Street firms and newspapers—functioned because their monopoly on information gave them legitimacy and authority in the eyes of the public. This dictated to the masses what was happening in the world in an “I-talk-you-listen” method of communication. Hedge funds are a perfect example of this model; they use their institutional clout to execute massive trades and go on CNBC to pronounce their view of the market, while the public is left watching and listening. However, with tools like Robinhood, which allows users commission-free trades, and Reddit, where groups can crowdsource and organize information, the public is not only talking back, but squeezing hedge funds’ short positions. In a world where Redditors can torpedo the holdings of Wall Street professionals, the elites and their institutions hemorrhage authority in the eyes of the public.
The masses leveraging vast networks of informational technology in disruptive ways have occurred worldwide in the past decade. Similar revolts of the public include the Arab Spring, Occupy Wall Street, the Indignados in Spain, the Gilet Jaune in France, the Estallido Social in Chile, Antifa in Seattle and Portland and many of the groups that recently invaded the Capitol. These disparate groups shared a deep resentment of the elite establishment within their respective societies and utilized social media to organize. Our elites and institutions have no clue how to respond to these developments. They are used to top-down bureaucracy and a monopoly of information. They are not familiar with the decentralized, networked world of the internet where Redditors can pull off a Bull Run, Egyptians can oust Hosni Mubarak after weeks of protests planned on Facebook and women can use social media to expose the sexual predators within elite media circles through #MeToo. This process has drained the elites of their legitimacy because not only does the public realize the elite emperor class has no clothes, but it was the public itself who stripped them naked. The elites of the major institutions have responded with a repressive and reactionary stance seen most clearly in the de-platforming of Parler and Discord banning the wallstreetbets server. These events have only furthered the public’s distrust and the belief that the elites’ claim to the mantle of meritocracy is bunk. Eventually, a new elite class that truly earned the trust of the public will rise to replace the out of touch crop currently in power who are desperately grasping at straws for what is already lost.
Palihapitiya, a former executive at Facebook, provides an example of someone who could successfully navigate this changing landscape. Like Trump and Rep. Alexandria Ocasio-Cortez (the most prominent left-wing populist figure in this new age), Palihapitiya intuitively understands how the democratization of information has changed society and the importance of media—both traditional and social—to politics in the digital age. Much like how then-candidate Trump called into cable news shows and held half-hour conversations with the hosts, Palihapitiya often does the same when he spars with CNBC’s investment experts by intoning against the status quo. Similar to AOC streaming on Instagram Live or Twitch and Trump lobbing bombs on Twitter, Palihapitiya often engages with his followers on Twitter to talk about investment and public policy ideas. He also hosts a podcast with other prominent Silicon Valley investors and has been an early adopter of the audio-chat social media app Clubhouse, which is popular with venture capitalists and futurists. These communication strategies eliminate the perceived distance between the elites in their ivory towers and the public, who, in Gurri’s estimation, instinctively distrust detached, removed institutional elites.
These trends may manifest at the ballot box more quickly than previously thought, as Palihapitiya is among the many prominent voices in the effort to recall California Governor Gavin Newsom and announced that he would run against Newsom in a potential recall election. His platform contains a number of bold policies but does not nearly fit into our current Democrat-Republican divide. Instead, it is a look at what a future-oriented technopopulism might look like and provides a stark contrast to the nostalgic populism of figures like Trump, which was primarily defined for what it stood against rather than what it affirmatively proposed. Old school populism has historically been driven by nihilist revulsion against the status quo without a vision of the future. The evolution of channeling sentiments undergirding previous forms of populism into a positively-oriented technopopulism agenda seeking to democratize the ivory towers of society for the benefit of the average person would portend a major shift. Whereas the nihilist populism of old could be symbolized by the Trump rally, this technopopulism of the future is encapsulated in the Bitcoin white paper.
Regardless of whether Palihapitiya actually wins the California governor’s mansion, his style and mindset, which are radical departures from the rigidly ideological and reflexively partisan politics of the current elite class, will likely become ascendant as the digital information age matures. Societal shifts have left our country polarized, the populous mired in distrust and the public in revolt. Venture capitalists have given us incredible inventions and services that we use every day, and maybe technopopulism can bring their innovative problem solving to rescue our politics.