001. r/wallstreetbets & the Mona Lisa
Exploring the trend towards ‘bottom-up’ Cultural value
I'd share more of my story but you wouldn't believe it
It's farfetched like I threw that shit a hundred meters
I keep it a hundred like I'm running a fever
I might take a breather but I won't ever leave ya
If I was you, I wouldn't like me either
—Drake, “Views”
The Mona Lisa is priceless. It’s the crown jewel of the Louvre (roughly 80% of visitors come to see the Mona Lisa), which holds the most celebrated collection of art in all of Europe, and arguably the world. Painted by the one and only Leonardo da Vinci, the Mona Lisa is 525 years old and is widely recognized as “the most visited, most written about, most sung about, most parodied work of art in the world.” Even if you don’t know a lick about art, you know the Mona Lisa. Still, tens of millions of people pass through the Louvre just to see Mona Lisa’s strange, gentle smile(?) and intense stare behind bulletproof glass and tens of millions people walk away from the experience dissatisfied. In 2019, a survey found the Mona Lisa was the most disappointing tourist attraction in 2019, with 8 in 10 people feeling ‘let down’ by their viewing of the portrait.
This begs a few questions: Why is the Mona Lisa SO damn famous? And why does it play such a huge role in our broader culture? Why do we STILL ascribe so much value to it?
I’ll spare the long history lesson, but the portrait was purchased by King Francis I in 1519, and held a few other homes around France before going into permanent display at the Louvre in 1797. There have been thousands of remarkable pieces of art hosted in the Louvre over the centuries, many of which people find more gratifying to experience than the Mona Lisa. But sometime after da Vinci finished the Mona Lisa, a handful of wealthy French elite, royalty, and artists in leotards and puffy shirts decided the Mona Lisa was the greatest piece of art in the world. For reasons unknown to us all, a number of institutions and people at or near the top of society — royalty, museums, art historians and critics— maintained that sentiment and held onto the same narrative. Over 200 years later, most of us aren’t really sure why the original folks thought it was so damn special. This is essentially ‘Top-Down’ Culture: cultural significance that exists and remains almost at the will of society’s institutions and ruling elite, or for being historically culturally significant.
What’s been happening over the past decade or so, especially among younger generations, is a transition towards “bottom-up” cultural significance. The ways we decide what’s culturally significant are changing: we’re deciding through communities, in real time, from the bottom-up. In a stream of consciousness on Instagram Live that partly inspired this post, Alexis Ohanian said that “Culture is organic, and bottom up.”
For some context, this transition is demonstrated particularly well through the rise of social media: when a piece of content is created or posted on Twitter, Instagram, TikTok, YouTube, etc., we often register how culturally significant or relevant that thing is based on the amount of people that look at it, share it, or the amount of time and attention that’s devoted to consuming it.
Beyond our time and attention, in a capitalist society, the way we determine what’s really significant is with our dollars. Money speaks loudly, and consumers are able to put their money behind objects and assets that they deem culturally significant in the present and/or valuable in the future. One trend borne of this paradigm shift is the emergence of new alternative asset classes that I like to call “cultural assets.” As the name suggests, cultural assets are a new class of alternative assets with high cultural significance or influence that can be securitized or informally invested in. In 2021, cultural assets most commonly include art, cards, collectibles, sneakers, and wine.
More to come on cultural assets (I’ll be exploring them in my next piece), but as we’ve seen in the past week, this broader uptick in “bottom-up” cultural significance is also transforming the way consumers invest in traditional assets like public equities. Much like we’re rejecting the proposed value of art from historical institutions, consumers are challenging financial institutions and their principles head on.
The surge in stocks like GME, AMC, BBBY, and others that have benefited from the retail trading frenzy driven by r/wallstreetbets is complicated. There are plenty of layers including the actual market dynamics behind a short squeeze, consumers trying to invest stimulus checks in a zero interest rate environment, as well as the gamification of investing among the Robinhood generation. What I have not seen people explore or discuss much (besides Alexis Ohanian), however, is how community and capital merged to dismantle the traditional definition of value in the public markets. Only in the process, did the masses threaten and crush one of the most highly-respected hedge funds.
There was an incredibly high amount of anti-institution energy driving the thousands that poured their money into companies. For decades, shorting stocks has been a highly controversial way to make money, and no one does it at a larger scale than institutional hedge funds. Hedge funds take on short positions largely based on a company’s signals of financial strength, and they make money when that company’s share price falls. In the case of struggling companies like AMC, and GME, the hedge funds would’ve made money as these companies faltered and ultimately faced bankruptcies, fired employees. BUT, as we’ve watched unfold over the past few days, that’s not what happened.
A few thousand people on r/wallstreetbets compiled and analyzed enough research to determine which stocks had the highest short interest and executed a strategic, community-driven play to create tens of billions of dollars in market cap in GME, AMC, BBBY and a host of others. The original instigators were tactical but also driven by a “stick it to the man” attitude, and resentment for hedge fund managers that have made billions from ivory towers for decades. Scribbled across all of r/wallstreetbets was the line “fuck the suits,” essentially meaning “fuck the rich Wall Street guys.” Seeing the crowd-driven play succeed, thousands more piled in, many with different motives, creating billions of dollars of more value.
On its face, this may not seem to relate directly to the Mona Lisa, but there’s a parallel here. Cultural significance is what a community collectively decides is valuable, and in 2021 consumers have more power to ascribe value to things than ever before, especially with our capital.
When tens of thousands of 15-25 year olds say and decide to collectively put their capital behind a struggling company, who’s to say that company is not valuable? The line gets blurry rather quickly, but using financial models to assign value is a top-down model of value. It’s the way institutions have told us to value companies for decades. But when the masses are enabled with the access, speed, capital, and community to challenge institutions at scale, we begin to see bottom-up value attribution.
In the case of the Mona Lisa, art historians, the Louvre, and history itself act as the institutions that continue to maintain the Mona Lisa’s cultural significance. There are millions of folks that still accept that and will continue to, but younger consumers these days are far less likely to accept top-down cultural significance. We’re not in front of the Louvre with picket fences chanting, “fuck da Vinci,” or “Mona Lisa sucks,” but we’re taking value determination into our hands by building it with each other from the ground-up
Why inherit value that the community doesn’t believe in when the community can create the value on its own terms?
That’s what’s going on in 2021 with r/wallstreetbets, art, bitcoin, stockX, collectibles, fashion, music - the list goes on and will continue to grow. This transition has been ongoing for years and it’s only being accelerated across the entire cultural stack.
Very well written!
This explanation helped my understanding of what's going on.