Unless you’ve been living under a rock, you’ve probably heard the story of GameStop and Robinhood. Many writers and outlets have claimed this is either a David vs. Goliath story or a dangerous new trend. On this episode of the Capitalisn’t podcast, hosts Luigi Zingales and Bethany McLean are joined by Matt Stoller, Director of Research at the American Economic Liberties Project, who has an entirely different view.

Matt Stoller: We’ve given up on the ability to stop cheating in the economy. We believe in democratizing finance, which another way of saying that is, everybody should get equal access to cheating, versus the traditional American model of saying, “No, we want to keep speculation to a minimum, so people can focus on business and working for a living and making useful and productive things.”

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Bethany: Matt, the key line in the piece you wrote, which I loved, is the basic problem that GameStop is revealing in our economy writ large: “As a society, we are increasingly putting our time, energy, capital, and talent we could use to build fun or useful things into gambling or acquiring market power.” You see the GameStop episode through this lens of a broader societal issue. And so many people are doing, I’d say, micro pieces saying, “It’s the little guys against the big guys,” “It’s David versus Goliath,” or, “It’s the way the market can be gamed,” or, “Let’s investigate Robinhood.” And there is this larger systemic issue behind it, right?

Matt Stoller: Well, I think every line in my piece is brilliant. So, there’s this traditional populist framework, pro-business, pro-justice, American framework that doesn’t really sit comfortably on the right or the left. It’s sort of the yeoman farmer thing from Thomas Jefferson, which kind of got updated to be the middle class and so on and so forth, that the enemy of business, agriculture, and labor is finance and monopoly. We don’t like the middlemen. We don’t like the monopolists, right? This goes back to the Middle Ages. Producerism. So, you roll that forward to the 1980s, 1990s, 2000s, and there’s this kind of shift away from the idea that the producer, the businessperson, the worker, the farmer, should have the fruits of their labor, towards a kind of different social-justice framework, which you can look at as consumerism or democratizing finance, right?

The idea that everybody should have access to this speculative frenzy or get cheap stuff. This is a political shift in the way that we think about our society. And so, GameStop, the political argument behind the Reddit types is that the market is rigged and we’re rigging it back. And their basic political argument is right. There are a lot of middlemen and hedge funds and various others that are doing sleazy things to steal money. And when they lose, they get bailed out. I am a little offended when people call it a casino, because casinos are regulated. Whether GameStop itself represents the little guy versus the big guy is less important than the political argument that they’re making.

But what they’re also saying is that we’ve given up on the ability to stop cheating in the economy. We believe in democratizing finance, which another way of saying that is, everybody should get equal access to cheating. Everybody should get equal access to the speculative fervor versus the traditional American model of saying, “No, we want to keep speculation to a minimum so people can focus on business and working for a living and making useful and productive things.”

I mean, one other thing I wrote in that Cantillon Effect piece on GameStop is, a friend of mine on Wall Street called me up. And he’s like, “Did you know that there’s a bubble in basketball trading cards?” And then I started hearing there’s a bubble in comic books. There’s all of this sort of strange behavior that you saw in the 1920s with just weird speculation everywhere. So, something is really off-kilter about our society when all of this money, and this is the Cantillon Effect, it’s like the money is not neutral. It is flowing into channels and it is winding up in these strange speculative bubbles. Elizabeth Warren came out and said, “GameStop has employees, and it has customers. And these are important things to consider. And we have to deal with this speculative froth that could be causing real problems here.”