A new study explores how investors' behavior is affected by participating in online communities, like Reddit's WallStreetBets.
- The study found evidence that "hype" over assets is psychologically contagious among investors in online communities.
- This hype is self-perpetuating: A small group of investors hypes an asset, bringing in new investors, until growth becomes unsteady and a price crash ensues.
- The researchers suggested that these new kinds of self-organized, social media-driven investment behaviors are unlikely to disappear anytime soon.
Social media has reshaped human behavior in ways we're only starting to understand. The proliferation of online communities has helped spawn novel strategies for promoting political causes, conducting business, finding sex and love, and transforming culture.
Could online communities also transform behavior in the financial world?
That's one of the key questions explored in a new study published on the preprint server arXiv. Titled "Reddit's self-organised bull runs: Social contagion and asset prices," the study used discussion data from the subreddit WallStreetBets to analyze relationships between the price of stocks and "hype" among online retail investors.
Hype is nothing new in the investing world. But the researchers noted that there seems to be something novel about the short squeeze of GameStop's stock in January, when the price of the stock rose tenfold, thanks largely to self-organized retail investors from WallStreetBets.
"As academics and regulators alike grapple with the implications, many wonder whether large-scale coordination among retail investors is the new 'modus operandi,' or a one-off fluke," the researchers wrote. "We argue that this is a new manifestation of a well-established global phenomenon."
To better understand how online hype is associated with stock prices, the researchers focused on two social components of hype: contagion and consensus. Contagion refers to investors spreading interest in an asset among each other, while consensus refers to their ability to agree on whether to buy or sell an asset.
The analysis found empirical evidence that both contagion and consensus emerge in online communities like WallStreetBets. In other words, investors spread sentiments about future stock performance to other investors, and then they cohere around investment strategies.
Popularity over fundamentals
The findings suggest that an asset's popularity, not its fundamentals, is paramount to many investors.
"Our results consistently show that investors become interested in discussing an asset, not because of fundamentals, but because other users discuss it," the researchers wrote. "Subsequently, this paper tests whether an individual's sentiment about future asset performance [is] affected by those of others. We find that this is the case: people look to their peers to form an opinion about an asset's potential."
To find evidence for social contagion among online investors, the researchers compiled a large dataset of posts and comments submitted to WallStreetBets. The goal was to analyze whether investors' past comments or posts about a given stock, such as Tesla, had a predictable effect on future discussions of that asset within WallStreetBets.
After conducting a regression analysis, the results suggest that hype is socially contagious and cyclical. The cycle usually plays out like this: A small group of investors hypes an asset. This attracts a larger group of investors who join the discussions.
But eventually, too many investors have joined the discussion, and fewer new investors are buying into the hype. As investors lose interest, they spend less time discussing (or "spreading") the asset on the forum, and they turn to new opportunities. The process is similar to a virus: As enough people become infected, they reach herd immunity, and the virus (hype) dies out.
So, does this process affect the stock price, and if so, how? The researchers said it was difficult to establish causality between hype and actual market activity. After all, they didn't have access to the trading records of subscribers to WallStreetBets.
But their model did show that activity on WallStreetBets was able to explain "significant variance" in trading volumes for the most-discussed assets on the forum. This suggests that when social contagion is strong for a given asset, consensus is strong too.
On the stock chart, consensus may start off bullish (or positively): As hype spreads, there's a slow, steady run-up in price. But the growth eventually becomes unstable and is followed by a crash and a period of volatility.
"The price crash stems from panic selling, as investors turn nervous in the face of volatility," the researchers wrote.
Bad news spreads faster than good news
Interestingly, the analysis found that bearish (or negative) sentiments were significantly more contagious on WallStreetBets.
"The data demonstrates that authors who previously commented on a bearish post are 47.7% more likely to express bearish over neutral sentiments, and 18.1% less likely to express bullish sentiments over neutral sentiments. Similarly, but less markedly, authors who previously commented on at least one bullish submission are 9.4% more likely to write a bullish submission, yet 11.3% less likely to write a bearish one."
The researchers said that the changing investing climate and widely available online data offers "promising opportunities for future research."
"As social media galvanizes a larger pool of retail investors with the potential for exciting stock market gambles, it is crucial to understand how social dynamics can impact asset prices," the researchers wrote. "With the first publicly acclaimed victory of Main Street over Wall Street, in the form of the GameStop short squeeze, it is unlikely that socially-driven asset volatility will simply disappear."
The British economic anthropologist Jason Hickel proposes "degrowth" in the face of recession.
What would happen if we waved goodbye to capitalism and instead focused on nurturing trust? The British economic anthropologist Jason Hickel tells Paulina Wilk that a better world is possible – but we only have 20 years to build it.
Paulina Wilk: In the middle of a pandemic caused by a new virus, you have published a book in which you call for a revolution and set humanity a new challenge that will require not only courage but also imagination. Is it really a good moment for that?
Jason Hickel: On the face of it, I was worried that I chose the worst possible time. Many economies are falling into recession and people think what we need right now is growth and consumption, while I propose the opposite: degrowth. However, what I see is that the crisis has made people eager for alternatives. We need change, we need a different proposition for the world. It is now clear that the way we have been running our economies is exactly what has gotten us into this crisis in the first place. Growth-driven incursions into the natural world triggered the development and the expansion of the virus. Also, in the West the obsession with protecting growth makes it very difficult for politicians to respond in a way that would protect people's health. People have now realized that we need economies organized around human wellbeing and ecological stability, not around the accumulation of capital. Any attempt to come out of the pandemic through even more excessive growth would be deeply counterproductive because we are facing an even greater problem: the climate crisis. Therefore we ought to respond to two crises at the same time, which requires rethinking the way we've organized the economy. The more I talk about it to people from all over the world, the more I feel the eagerness for a change.
Do you find this eagerness among ordinary people, or among politicians and the business elite?
I find it mainly in the interactions during my public lectures, as well as when talking to scientists. Even people from the Deep South of the US – who are overwhelmingly Republican voters – are of the opinion that supporting ecological stability is more important than growth. Surveys show that for Europeans, protecting the ecosystem is necessary even at the expense of economic growth. I think a lot of this emerges from what has happened over the past 10 years, after the global financial crisis. It has become clear that growth only really benefits a small fraction of our societies. We are watching billionaires get richer, and yet wages are stagnating. In the US and the UK, we are witnessing a decline in happiness levels. Growth is not delivering the good lives we were promised it would. And so people are asking: "What's in it for us?"
You tackled economic inequalities in your previous books. But isn't the pandemic the great equalizer? Everyone can get sick, even a Hollywood star. Or is it the other way round: maybe it deepens the divide between the privileged elites and the rest of us?
It has very clearly exacerbated the inequalities. US billionaires in the past few months alone have increased their wealth by $600 billion. Meanwhile, since March the debt of the poor has been rising by $5 billion a day. The crisis is pushing hundreds of millions of people into poverty. What becomes obvious is that we need a different kind of recovery – a recovery without growth. The problem is not that GDP is too low. The problem is that people don't have access to the livelihood they need. We need to answer this directly rather than stimulating the economy in the false hope that the trickle-down effect will magically solve everything, which it virtually never does.
You want us to wave goodbye to the concept of growth on which capitalism is based; to reject the blind faith that growth brings prosperity and wellbeing. Instead, we should focus on actual human needs, not on abstract indexes. It is a lot to ask. Do you consider it a radical idea, or is it in fact a lot easier than one might think?
The concept of degrowth is not radical. It has widespread support from scientists. Just last year, 11,000 scientists signed an open letter in the journal BioScience calling for world governments to abandon GDP growth as a political and economic objective. Now, the reason for that is quite simple. The more we grow the global economy, the more energy it requires and the more difficult it is for us to supply renewable alternatives able to meet the demand. We know we have to reach zero emissions before the mid-century. It is a very short timeline. The Intergovernmental Panel on Climate Change is clear that the only way we can accomplish such a rapid transition is to scale down energy demands and unnecessary industrial production.
Right now, we live in a global economy in which the dominant belief is that all industries must grow rapidly all the time. In an era of ecological breakdown, this is irrational and unfeasible. We need an open democratic conversation about what industries we still want to grow (like, for example, renewable energy, public health, public transportation) and which industries are big enough already and we should scale down (maybe SUV production, private jets production, advertising). It would help us solve the climate crisis because this approach takes into account many things: deforestation, soil depletion, fish stock depletion, mass extinction of species. All these things are driven by excessive exploitation of resources. By scaling down industrial production we would take pressure off the living world and bring the economy into balance with it.
What about the losses?
The crucial thing is that all this could be done while improving people's lives. We've been sold the lie that human wellbeing increases with GDP. Actually, the correlation is very low and in time breaks down completely. In high-income nations, additional GDP has nothing to do with wellbeing. Take, for example, the US. The GDP per capita there is $60,000. Now compare that with Portugal, where the GDP per capita is 60% less. And yet Portugal has higher life expectancy and higher happiness levels than the US. How does it accomplish that? By investing in things that matter for human wellbeing – by reducing inequalities, guaranteeing good wages, and investing in robust, universal public services such as education, healthcare and housing. This is the secret to a flourishing society. It can be accomplished in high-income nations without additional growth.
When you say it, it all sounds surprisingly simple.
Because it's much easier than we think. And it's a more rational and effective approach to human progress. My proposal is not radical; it is in fact very sensible. The radical idea would be to stick to the status quo and not face any pressing problems.
You want us to change the way we think, especially the way we think about capitalism. But wasn't capitalism, in its inception, a good and noble idea? It has many apologists who point out that it went wrong only in its late, neoliberal phase.
Let's take a look at the history of capitalism. The growth of rich countries in Western Europe and North America was possible because of colonization and the slave trade. Europe's industrialization relied on the appropriation of land, resources and labour from the Global South. Therefore, for hundreds of years capitalism had negative consequences for the indigenous populations in many parts of the world. The crisis was there from the very beginning – just not a crisis for Western Europe. We must put capitalism into perspective. When we say 'capitalism' we mean trade, private enterprise, markets, and so on. But those things existed long before capitalism came into being in the 16th century.
What makes capitalism distinctive is that it was the first economic system in history organized around constant growth. That might have been be fine for a while, but you quickly reach a point where you are causing ecological and social problems. For a long time, the West has been exporting those problems to the Global South, but it's no longer an option – now we're all facing the climate crisis. So when I call for a transition to a post-growth economy, I mean essentially a post-capitalist economy. We shouldn't confuse this with a command economy, like in the communist states of the 20th century. We simply need a new order that isn't organized around constant expansion and is in balance with the living world.
You've brought up the spectre of communism, so let me ask you a question from the perspective of someone who grew up in a socialist economy. For the first 10 years of my life, I did not know growth – only scarcity. I remember borrowing, fixing, exchanging things. I remember not having the things I wanted. Then a shock doctrine was employed to effect the transition to a new capitalist economy; people in Poland paid a steep price for the so-called 'transformation' and for the free market. Some, for example, lost all their savings. Can you assure me that degrowth will occur without this kind of turbulence?
If we do nothing, we'll end up in a crisis anyway, simply because of climate change. Around the world right now, we see many tragedies. People are losing their homes and resources, communities are being destroyed. Nigeria has just lost 25% of its crops due to flooding. We need to change our path. I'm calling for a transition that is focused on ensuring stability and human wellbeing. The crisis that happened in Poland was very destructive for many people, though some benefited tremendously. But I'm arguing for something that is exactly the opposite. The new transition will have to be organized around protecting and benefiting the lives of the majority of people.
The experience of socialism also brought us the ability to exchange and to share resources. Can these skills and social practices serve as tools for building a new future? Can the change come from societies that are able to imagine new and different ways of organizing economies?
Poland is an interesting example. I've talked to a lot of Polish people on this issue and I found that they are very divided. Some of them are in ideological lockdown and defend free-market capitalism because they still fear the past. So the answer to your question is: yes and no. There are people who can draw on knowledge about different economies in the past and imagine different economies in the future. This is a powerful intellectual resource. But at the same time, the kind of economy that Poland had throughout much of the 20th century is not what I'm calling for. It wouldn't solve any current problems. After all, the Soviet model was also organized around growth – it competed with the US and wanted to expand as much as possible. Which led to catastrophe, because the Soviet economy was exploiting human and natural resources just like the American economy was, only in a different way. All in all, the 20th century doesn't provide us with a solution. We need to evolve an entirely new system fit for the realities of the 21st century.
That said, there are many promising ideas emerging in the Global South. We see it in Indigenous philosophies, in movements like La Via Campesina – namely the movements of peasants working towards food sovereignty. We see it in the Indian concept of ecological flourish. But there are also some interesting developments in the Global North. Just last year, New Zealand decided to abandon GDP as an objective in their next budget, which inspired the leaders of Scotland and Iceland. I think we are witnessing the birth of a global alliance of countries – although at the moment only small ones – that are keen on developing new economic models.
When thinking about degrowth, you take inspiration from the past. You write about the animalists who don't distinguish between the human world and the natural world, you write about Indigenous people who utilize natural resources with care. And you call for going back to an economy that is rooted in actual needs instead of artificially-manufactured desires. Was there a period in history that you consider especially inspiring and hopeful?
I guess one of the problems we are facing is that degrowth has never been attempted. This is a totally new challenge. But let's take a look at the history of Europe. Feudalism was, of course, a very bad and destructive system. It broke down because of the peasant revolutions against the feudal class in the mid-15th century. The peasants demanded access to the commons, forests and lands for their own use. And they succeeded – between 1450 and 1500 there was a flourishing of revolutionary society, deeply democratic and deeply egalitarian. Wages went up, various indicators of human wellbeing improved, nutrition improved. At the same time, the natural landscape of Europe was regenerating. Why? Because democratic egalitarian societies are intrinsically more ecological. You can focus on human needs rather than on generating a surplus that will then be extracted from you by the elites. Of course, it was all later dismantled by the enclosure movement, which kicked peasants off the lands in order to drive wages down and make labour cheaper for the nascent capitalist class, for the plantations and factories. But there remains this inspiring period in Europe's history that we can look back on and be hopeful about the kind of society we can create.
Looking for positive inspiration in past experiences is certainly helpful, but in order to forge a new and different future, we need imagination. Meanwhile, at least since the beginning of the 21st century, we are witnessing a deficit of imagination. The present is so intense and overwhelming that there's not much space left for thinking about alternate scenarios. How should we nurture the power of imagination?
It's a fascinating question. When you tell people that capitalism is, let's say, problematic, and we need a new system, they immediately shut down. "No, it has to be capitalism." This idea was entrenched in the 1980s by people like Margaret Thatcher, who literally thought there was no alternative. But it strikes me as very odd because we live in a culture that is totally enamoured of innovation and creativity – those are among our highest values. You'd never look at a smartphone and say: "This is the best smartphone that's ever been produced, it shall never be surpassed, and we shouldn't even try to do that." And yet, for some reason, when it comes to our economic operating system, we routinely say it is the best possible one. We need to take a much more innovative and creative approach to the economy. I believe we're perfectly capable of doing that.
Perhaps what hinders our imagination is the 'kidnapping' of language. In your book Less is More you suggest abandoning or changing some words and concepts. For example, you say that instead of the Anthropocene we should be using the word 'Capitalocene'. But what interests me the most is the concept of abundance. It brings to mind nature, the pulsating diversity of life, the Amazon rainforest. How do you define abundance, and what part does it have to play in the future of civilization? Can we create abundance?
Capitalism is a system predicated on scarcity. It's difficult to grasp because we look at capitalism as something that produces an incredible amount of goods. Look at all the stuff in the shops, look at the adverts. But in reality, capitalism has always been creating the illusion of scarcity in order to compel people to work and to consume. Advertising itself is a process of creating artificial scarcity. It makes us believe that whatever we have is not enough and we should want more so that capitalism can keep growing. We can solve the problem of scarcity by switching to an economy organized around abundance. When people have access to everything they need to lead flourishing lives, they no longer need high levels of personal income. Therefore we can reverse the pattern of artificial scarcity by introducing organized abundance.
What would it look like?
Like a fair distribution of existing income. There is no actual scarcity of income in the global economy. However, we experience artificial scarcity at the bottom, because much of the income is captured by the people at the top. A fair distribution of existing incomes and opportunities would enable people to lead good lives. The same goes for public goods, like healthcare, education and housing. The more access people have to robust universal public goods, the happier they are, the more healthy, the better their wellbeing, relationships, gender equality, etc. That is the secret to a flourishing community. If we can guarantee this public abundance, there will be a lot less pressure to continue with the scarcity-driven private consumption that today is the primary feature of the capitalist economy.
But governments are struggling, we see how poor the quality of political leadership has become, and huge multinational corporations are getting stronger. The pandemic only exacerbates all those problems: Big Tech is the primary beneficiary of COVID-19. How do we solve this? How do we rebuild trust in the power of the state and make people believe in a good public sector?
Yes, public trust in government is at a crazy all-time low. And the reason is the exploding inequalities we've seen in the last few decades. Those processes are insane and extreme. For example, the richest 1% in the world captures nearly a quarter of total global GDP. And money isn't the only unequally divided resource. Rich people control political processes; political power is also being captured. We have our media systems overtaken by corporate elites. Hence the erosion of trust in social solidarity. Distrust takes the form of right-wing conspiracy theories, of neo-fascist movements, of riots in the streets. Our institutions are collapsing precisely because our political system has been made to serve growth at all costs. People realize that this is a disaster for them and they're desperate for alternatives. We need credible, democratic alternatives on the table, not some pseudo-solutions shot out by media monopolies. Until the imagination lockdown is broken, political polarization will increase.
Let's talk about how to make change happen. Which brick should we remove first in order to dismantle the whole structure and make space for something truly new?
I'm not a political strategist, but I can point to some promising examples – movements such as Extinction Rebellion and Sunrise Movement. They are calling for a transition to a post-growth economy that would be organized around the principles of justice, not just nationally but globally. I find that very exciting. The more pressure that we can exert on politicians, the better. Then there's another approach. My book Less is More is primarily organized around policy ideas that could be implemented by our governments. On the face of it, I'm talking about small reforms, but they are actually revolutionary, because they effectively reorganize the way capitalism works. I set out some blueprints for progressive governments – Costa Rica can carry it out, and so can Scotland, New Zealand or Nicaragua. But as far as global change is concerned, I believe mass social movements will have to carry us there.
Of course, this means going into battle with those who benefit from the status quo. It won't be easy. The global elite will not simply get together at Davos and adopt post-growth principles. Two things will have to come together: robust organized political movements and a powerful alternative vision. And let me emphasize: we don't have centuries to do this. We have two decades at the most to make this transition happen. The key thing right now is to have conversations, to find the courage to confront the old guard, and talk about how the new system could look. My purpose is to open up imaginations and start conversations.
You also point out a new scientific consensus. Experts from different fields want us to see the world as one interconnected system and to get rid of the whole concept of man as separate from nature. Is this now a part of the mainstream? Has the opening up of imaginations already started?
I do feel hopeful, I think that the conversation is changing. To give you an example: you must have heard of the European Green Deal. It sets out various objectives, such as zero emissions of greenhouse gasses by 2050. And it also represents precisely the wrong kind of response. You can summarize its approach this way: "Let's use the transition to renewable energy sources as an opportunity to accelerate growth." I explain in my book why that's not feasible. But there's already one alternative on the table, proposed by DiEM25 [Democracy in Europe Movement 2025], a democratic movement established by Yanis Varoufakis and Noam Chomsky. Their idea is refreshing. They call for global justice and a post-growth economy. It is clear that the younger generation, people of my age and younger, are eager for such alternatives. And, as I've mentioned before, we're also seeing some innovative national-level policies, for example in Iceland or Costa Rica, where governments are deciding to prioritize wellbeing. I think that's very promising.
And yet you take some hope away – as well as a sense of agency – when you write that individualism is a myth and that changing our individual attitudes barely matters. Are you telling me recycling or using energy-saving lightbulbs is not important? And if not, what should we do?
For too long, environmentalists have been focusing on the idea of individual behaviour change. It becomes very blame-oriented. "You should do that or this, you should give up this or that." And of course, people react badly, asking: "Why are you blaming me?" We need to recognize that individuals are victims of the growth-oriented system. We have been made consumers because we live in an economic system that requires perpetual growth and consumption. Individuals can try their best to consume less, but it won't solve our problems.
Therefore we need to change our mindset and organize collective support for a different kind of economy. Think of the civil rights movement in the US. If you were a white person in the US South during segregation, it wouldn't be enough to just sit in your home and say to yourself: "I'll do my best not to be a racist." That wouldn't change the system. You'd need to go outside, meet your neighbours, join a social movement, organize collectively to fundamentally change an unjust system. And that's the kind of political action we need today.
What will the role of technology be in all this? You've dismantled the promise of a digital economy, pointing out that it is surprisingly not virtual, meaning it still requires lots of material resources. Can we make better use of technology?
The technologies we have are actually quite remarkable and they keep getting better. Because of this constant improvement, we assumed that they would reduce our ecological impact. But they don't. Under capitalism, efficiency improvements aren't there to enable us to do the same amount with less – they only enable us to do more. A simple example is the chainsaw. It allows us to cut trees more quickly, and so we cut more and more of them. Technology is merely a tool. If we switch to a different economic system, it will serve new, different goals.
According to you, growth is our obsession. Even planetary boundaries – the Earth's capacity to endure our expansion and aggression, the number of catastrophes, including the current pandemic – are not stopping us. We can't count on any external forces; we'll have to consciously choose a better world.
That's right. In the 1970s, we thought that there were limits to growth, because once we depleted resources, the economy would crash. What we realize now is that there are no limits. The economy will find ways to grow. We have to make a conscious decision to limit growth ourselves before we reach ecological tipping points. Scientists have already told us what the climate crisis will be like – we cannot plead ignorance.
Does this decision have to be made by a well-informed majority? That would be more difficult, especially as there isn't much time. As an economic anthropologist, what conclusions do you draw from the history of revolutions and rebellions? Can a minority bring change?
No, you don't need to convince everybody – you just need a very vocal and active minority. The way social change works is: a new idea emerges, enough people are convinced by it, they talk about it, and suddenly it becomes thinkable. If it's robust and persuasive, a consensus is born. The idea enters into policy discussions without the need to convince everybody one by one. On the other hand, we know there's already a democratic majority that is in favour of the ideas of post-growth. It may not express it that way, but polls show us that people want a different kind of economy, one that is organized around ecology and wellbeing. So the question becomes: if we live in a democracy and a majority of people are calling for a change, why isn't it happening? The reason is that the voices of elites in our media and our political system matter much more than the voices of ordinary people. The solution is, in fact, democracy. If we can have a democratic conversation about post-capitalist alternatives, people will come through for this new kind of approach. But thus far, we've not had this conversation.
Many critics will point out that democracy and capitalism don't really work without one another. In Poland, we got them both at once.
There is a common idea that capitalism and democracy go together. I argue that in many ways they are opposites. Capitalism requires extraction and exploitation in order to perpetuate growth, and therefore it is at odds with democratic sensibilities. You can see this in all sorts of scientific experiments – when people have democratic control over economic processes and resource allocation, they make decisions built on principles of sustainability. They save resources for future generations rather than sabotaging ecology for the sake of immediate financial gain. Democratic choice means making post-growth decisions.
You were born in Eswatini, a small African country with an absolute monarchy. Don't you ever wonder whether an enlightened king would deal with all those necessary changes faster and better?
I get why people fantasize about some efficient dictatorship that would bring about changes. But I really think that democracy is a more promising avenue. The problem is that we don't have real democracies. We need proper democratic reform – to get big money out of politics, to break up media monopolies. That's a precondition for the conversation we must have. Once we have this democratic conversation, all the evidence suggests that we will choose the post-growth alternative. There is no reason to abandon hopes for democracy.
Allow me to end on a practical note. If we reject GDP as an index of wellbeing, what measure should we choose instead?
There are lots of different alternatives. If you want a single indicator, then there's one called Genuine Progress Indicator. It starts with GDP and then subtracts negative social and ecological outcomes, which gives you a much more holistic idea about the shape of the economy. Using this indicator is also useful if we want to change people's perception of the global economy. However, even better is to have a conversation about what we want our economy to deliver – be that better wages, universal healthcare, zero emissions – and make those the explicit priority. Let's achieve those goals directly rather than just pursue GDP growth in the vain hope that it will solve any problem.
Introduction and biography translated from the Polish by Jan Dziergowski
The biggest risk comes from doing nothing at all.
As the virus has spread, we have seen how none of us are immune, and how we need to work together to build and deploy solutions such as treatments and vaccines.
We need to fight climate change with this same level of cooperation and commitment. Because while COVID will pass, the problems facing our environment are only getting worse. We've seen extreme weather events and fires rage across the American West, the Australian bush and Brazil's rainforests. We've seen temperatures hit new highs and the amount of sea ice sink to new lows.
It's up to us, as business leaders, to reimagine the way we do business and find new ways to tackle climate change. We each have arenas where we spend our time, whether that's finance, retail or healthcare. We need to examine those arenas and build coalitions that can make us more effective.
My arena is the digital economy. Throughout my career I've worked to build digital products that solve important challenges and have a material benefit to people's lives. As the climate crisis looms larger, it's become even more important to think about the social and environmental impact of this work. What I've learned is that in order to truly make a difference, businesses need to invest in partnerships, inspire consumers to be part of the solution, and embed sustainability into the fabric of their business.
Investing in partnerships
Partnerships are critical to governments and businesses in meeting their ambitious climate goals, and we must all step up to help solve these major global challenges together. In the US, for instance, the majority of people believe that their government is not doing enough to combat climate change, so going into a new administration, we have a chance to form public-private partnerships to supercharge each other's efforts.
From a corporate point of view, many businesses want to take action but are paralyzed by the enormity of the challenge, or fear of doing it the wrong way. The reality - the biggest risk comes from doing nothing at all.
When we formed the Priceless Planet Coalition, we unlocked the power of our global network and brought together more than 40 of the biggest names in finance and commerce, to take action to restore 100 million trees in five years – supporting the World Economic Forum's one trillion trees platform, 1t.org. This coalition calls for each of us to avoid pursuing a fragmented, sub-scale approach, but instead bundle our efforts to deliver a bold, sustained, long-term commitment with the greatest possible impact.
We have also brought on board climate-science advisors and forest restoration partners Conservation International and the World Resources Institute, to ensure our work is done in a science-driven way that creates maximum benefit for the planet. These experts guide our decisions about where and how to plant, and provide context on social issues and biodiversity. By providing a solid infrastructure, we can empower coalition partners to seamlessly plug in their initiatives and do what they do best – leverage their core business capabilities to engage and activate their consumers for this important cause.
We will not reach our climate change goals without encouraging citizens to participate. Fortunately, gone are the days when supporting the environment was left to a niche group of progressives – increasingly, people want to support brands that have sustainability at the core of their values. Two-thirds of adults across 28 countries say they have made changes to their consumer behaviour out of concern for the climate.
This is especially true of Generation Z, the young people who are poised to become a market force in the coming years. Two-thirds of this group say they prefer to buy from sustainable brands and nearly three-quarters say they are willing to pay more for sustainable products.
The biggest challenge, however, is that people don't know where to start. The easier we can make it for them to participate, the better chance we have of making those sustainable behaviours stick.
As a payments company, we also want to use our technology to enlist people in combating climate change. This means educating consumers about the carbon footprint of their purchases (which we're already scaling this with the fintech startup Doconomy) – so that they can make more mindful spending choices. It also means making it easy and safe for people to donate– or even use rewards points - to contribute to reforestation efforts while counterbalancing other spending. Ultimately, we are looking at all of our consumer touchpoints so that we can enable people to think differently about what they're paying for.
Embed sustainability into the fabric of business
In the middle of a pandemic, you might expect companies to be so focused on just getting through this moment that all other priorities fall to the wayside, but that's not what we've seen. Those who have joined the Priceless Planet Coalition did so because they know we can't afford to wait and they want sustainability to be a key part of everything they do. While sustainability has often been the remit of Corporate Social Responsibility (CSR) teams, many now realize that to continue delivering impact it needs to become an integral part of the fabric of the company's business.
That will look different depending on the company. Within our coalition, each member has the flexibility to take a unique approach to engaging consumers and encouraging tree planting – aligning with both their sustainability and business goals. What we provide is the framework and infrastructure for partners so that efforts aren't fragmented, but instead united and underpinned by science. But it's key that every company build sustainability in ways that are authentic and core to their own businesses. Some might focus on customer acquisition – planting a new tree or making a donation for anyone who opts for a card made from sustainable materials. Others will incentivize more sustainable behaviours in realms they can best influence – from going paperless or encouraging bike-sharing.
As leaders, we must act today to create lasting, exponential impact to our planet. That's what I value so much about coalitions that bring together partners across a range of disciplines and industries. We can take the best ideas of each member and proliferate them across an expanding network that touches billions of consumers. We will only make change if we work at this together. Our economy and people will only thrive when our planet does too.
Singapore has approved the sale of a lab-grown meat product in an effort to secure its food supplies against disease and climate change.
Singapore faces a problem. The city-state currently imports the bulk of its food from overseas, producing only 10 percent domestically. This state of affairs leaves Singapore in a vulnerable position. An outbreak of disease, for example, could have outsized consequences on the country's food supply. So could the souring of fruitful political or economic partnerships. Looking into the future, climate change and population growth could see today's trade-friendly ports shuttered with closed signs as global food supplies become more tenuous.
In light of this reality, Singaporean leaders are doing something drastic and unprecedented for a world government—they're planning ahead.
Under the "30-by-30" Plan, Singapore aims to produce 30 percent of its food by the year 2030. But unlike the dominant food-producing countries—China, India, the U.S., and Brazil—this tiny island nation lacks the acreage to dedicate to traditional agriculture, so they've turned to modern technology. To produce more with less, the Singapore Food Agency is experimenting with rooftop gardens, high-rise hydroponic farms, and high-yield genetic crops.
Singapore is also looking at lab-grown meat as a sustainable, secure alternative to today's factory farming. In a recent step toward that future, its officials have given regulatory approval to sell lab-grown meat.
Approve for your dining pleasure
Eat Just, a company that produces animal-alternative food products, announced the news earlier this week. In what the company is calling a world first, Singapore has given it permission for a small-scale commercial launch of their GOOD Meat brand product line. For the initial run, the cultured chicken meat will be sold as an ingredient in "chicken bites."
"Singapore has long been a leader in innovation of all kinds, from information technology to biologics to now leading the world in building a healthier, safer food system. I'm sure that our regulatory approval for cultured meat will be the first of many in Singapore and in countries around the globe," Josh Tetrick, co-founder and CEO of Eat Just, said in a release.
According to the release, Eat Just underwent an extensive safety review by the Singapore Food Agency. It provided officials "details on the purity, identity and stability of chicken cells during the manufacturing process, as well as a detailed description of the manufacturing process which demonstrated that harvested cultured chicken met quality controls and a rigorous food safety monitoring system." It also demonstrated the consistency of its production by running more than 20 cycles in its 1,200-liter bioreactors.
While Eat Just did not offer details on its propriety process, it likely follows one similar to other lab-grown meats. It starts with muscle cell samples drawn from a living animal. Technicians then isolate stem cells from the sample and culture them in vitro. These cultured stem cells are then placed in a bioreactor, essentially a fermenter for fleshy cells. The bioreactor contains scaffolding materials to keep the growing tissue from falling apart as well as a growth material—the sugars, salts, and other nutrients the tissue needs to grow. As the cells grow, they begin to differentiate into the muscle, fat, and other cells of meat tissue. Once grown, the tissues are formed into a meat product to be shipped to restaurants and supermarkets.
An abattoir abatement?
A graph showing the number of animals slaughtered in the United States per year from 1961–2018.
Credit: Our World in Data
Singapore's approval is an important step in support for clean meats—so-called because they don't require animal slaughter and would likely leave a reduced carbon footprint—but hurdles remain before widespread adoption is possible.
The most glaring is the price. The first lab-grown hamburger was eaten in London in 2013. It cost roughly $330,000. As with any new technology, investment, iteration, and improved manufacturing will see the price drop substantially and quickly. For comparison, Eat Just's chicken will be priced equivalent to premium chicken.
Other hurdles include up-scaling production, the need for further research, and developing techniques to reliably produce in-demand meats such as fish and beef. Finally, not all countries may be as receptive as Singapore. Countries with large, entrenched meat industries may protect this legacy industry through a protracted and difficult regulatory process. Though, the meat industry itself is investing in lab-grown meat. Tyson Foods, for example, has invested in the food-tech startup Memphis Meats, the company that debuted the world's first beef meatball.
"I would imagine what will happen is the U.S., Western Europe and others will see what Singapore has been able to do, the rigours of the framework that they put together. And I would imagine that they will try to use it as a template to put their own framework together," Tetrick told Reuter's during an interview.
Regardless of the challenges, the demand for meat substitutes is present and growing. In 2020, plant-based substitutes like Beyond Meat and Impossible foods gained a significant foothold in supermarkets as meat-packing factories became coronavirus hotspots. The looming threat of climate change has also turned people away from meat as animal products. Livestock production is environmentally taxing and leaves a much larger carbon footprint than grain and vegetable production.
Then there's the moral concern of animal cruelty. In 2018 alone, 302 million cows, 656 million turkeys, 1.48 billion pigs, and a gob-smacking 68 billion chickens were slaughtered for meat worldwide. And those figures do not include chickens killed in dairy or egg production.
If brought to scale and widely available, clean meats could become serious competitors to traditional meat. One report has even predicted that 60 percent of the meat people eat by 2040 won't come from slaughtered animals. It could be just the thing for people looking for a meat substitute but who find tofurkey as distasteful as, well tofurkey.
The next era in American history can look entirely different. It's up to us to choose.
- The timeline of America post-WWII can be divided into two eras, according to author and law professor Ganesh Sitaraman: the liberal era which ran through the 1970s, and the current neoliberal era which began in the early 1980s. The latter promised a "more free society," but what we got instead was more inequality, less opportunity, and greater market consolidation.
- "We've lived through a neoliberal era for the last 40 years, and that era is coming to an end," Sitaraman says, adding that the ideas and policies that defined the period are being challenged on various levels.
- What comes next depends on if we take a proactive and democratic approach to shaping the economy, or if we simply react to and "deal with" market outcomes.