In the spring of 1988, I made a lifelong friend thanks to a video-game cheat code. As preparation for a family move to Pensacola, Florida, I visited my new school. While there, I casually told a future classmate named Tim that the numbers 007 373 5963 would take him straight to the final fight of the very popular Nintendo boxing game Mike Tyson’s Punch Out. My buddies and I in Oxford, Mississippi, all knew this code by heart, but it turned out to be rare and valuable information in Pensacola. Years later, Tim revealed to me that it was my knowledge of the Punch Out cheat code that made him want to be friends.
I wouldn’t have understood this at age 9, but I had just engaged in a successful act of cultural arbitrage. If financial arbitrage involves the acquisition of commodities in a market where they are inexpensive and selling them for profit in a market where they are expensive, cultural arbitrage is the acquisition of information, goods, or styles in one location where they are common and dispersing them in places where they are rare. The “profit” is paid out not in money but in esteem and social clout. Individuals gain respect when others find their information useful or entertaining—and repeated deployments may help them build entire personas based on being smart, worldly, and connected.
In the past, tastemakers in the worlds of fashion, art, and music established careers through this sort of arbitrage—plucking interesting developments from subcultures to dangle as novelties in the mass market. The legendary writer Glenn O’Brien, for example, made his name by introducing the edgiest downtown New York bands to suits at record labels uptown and, later, by incorporating elements from punk rock, contemporary art, and underground S&M clubs in the creation of Madonna’s scandalous 1992 book, Sex.
But the internet’s sprawling databases, real-time social-media networks, and globe-spanning e-commerce platforms have made almost everything immediately searchable, knowable, or purchasable—curbing the social value of sharing new things. Cultural arbitrage now happens so frequently and rapidly as to be nearly undetectable, usually with no extraordinary profits going to those responsible for relaying the information. Moreover, the sheer speed of modern communication reduces how long any one piece of knowledge is valuable. This, in turn, devalues the acquisition and hoarding of knowledge as a whole, and fewer individuals can easily construct entire identities built on doing so.
There are obvious, concrete advantages to a world with information equality, such as expanding global access to health and educational materials—with a stable internet connection, anyone can learn basic computer programming from online tutorials and lectures on YouTube. Finding the optimal place to eat at any moment is certainly easier than it used to be. And, in the case of Google, to “organize the world’s information and make it universally accessible and useful” even serves as the company’s mission. The most commonly cited disadvantage to this extraordinary societal change, and for good reason, is that disinformation and misinformation can use the same easy pathways to spread unchecked. But after three decades of living with the internet, it’s clear that there are other, more subtle losses that come with instant access to knowledge, and we’ve yet to wrestle—interpersonally and culturally—with the implications.
To draw from my own example, there was much respect to be gained in the 1980s from telling friends about video-game cheat codes, because this rare knowledge could be obtained only through deep gameplay, friendships with experienced gamers, or access to niche gaming publications. As economists say, this information was costly. Today, the entire body of Punch Out codes—and their contemporary equivalents—can be unearthed within seconds. Knowledge of a cheat code no longer represents entrée to an exclusive world—it’s simply the fruit of a basic web search.
Admittedly, an increased difficulty in impressing friends with neat tips and trivia hardly constitutes a social crisis. And perhaps benefitting from closely kept secrets was too easy in the past, anyway: In my Punch-Out example, I gained a disproportionately large amount of esteem for something that required very little effort or skill. But when these exchanges were rarer—and therefore more meaningful—they could lead to positive effects on the overall culture. In a time of scarcity, information had more value, which provided a natural motivation for curious individuals to learn more about what was happening at the margins of society.
Arbitrageurs would then “cash in” by introducing these artifacts to mainstream audiences, which triggered broader imitation of things once considered niche. This helped accelerate the diffusion of information from the underground into the mainstream, not only providing sophisticated consumers with an exciting stream of unfamiliar ideas but also breathing new life into mass culture. The end result of this collision was cultural hybridization—the creation of new styles and forms.
This process helps explain the most significant stylistic shifts in 20th-century pop music. Living in the port city of Liverpool, where sailors imported American rock-and-roll records, the Beatles leveraged this early access to the latest stateside recordings to give themselves a head start over other British bands. A decade later, the music producer Chris Blackwell, who co-founded Island Records using his upbringing in Jamaica and knowledge of its music, signed Bob Marley and turned reggae into a globally recognized genre. Over the past 15 years, Drake has picked up this mantle as music’s great arbitrageur, using his singular celebrity to produce collaborations with then-emerging talent such as Migos and the Weeknd that cemented his own reputation as a tastemaker.
Creative ideas appear to be impressive innovations to average consumers only once they get a foothold in wider society, which requires a difficult jump from so-called early adopters (who are curious to find new products and art forms) to the more conservative mainstream (who tend to like what they already know). And in the cultural marketplace, arbitrage succeeds more than pure invention because it introduces works that feel novel yet have proven track records of impressing others somewhere else. Before importing reggae to the United States and the United Kingdom, Blackwell knew that this music delighted Jamaicans—and that its popularity within a community that was fighting oppression would appeal to countercultural sympathizers as well.
That global platforms such as Spotify, YouTube, and Wikipedia reduce the glory of acquiring deep information has not stopped the hunt. Instead, it’s pushed everyone to solve a much more narrow set of information inequalities in their own, smaller communities. Big-league influencers may have trouble looking for the big score, but “day traders” in niche fan groups can achieve minor status boosts by being the first to deliver news about their favorite idols to fellow fans. Arguably, individual fandoms have never been stronger—yet because information moves so quickly, these communities exert less influence on larger audiences that have less time or inclination to keep up with every micro-development. And though such superfans may claim to reject public opinion, they secretly need their insights to be respected outside the group in order to feel like something other than just dedicated hobbyists.
At the same time, the hyper-politicization of culture on the internet has constrained arbitrage from a different angle: The previously common practice of being influenced by minority communities now elicits charges of appropriation. Such moral judgments are not new: The Nigerian musician Fela Kuti initially accused Paul McCartney of intending to steal “Black man’s music” after the former Beatle went to Lagos to record the Wings album Band on the Run. A greater awareness of the issue in recent years, however, means that third parties now actively police the exact moments when inspiration becomes theft. When the white influencer Charli D’Amelio boosted her own fame by popularizing the “Renegade” dance on TiKTok, the journalist Taylor Lorenz traced its origin back to its Black creator, Jalaiah Harmon. In this case, the heightened sensitivity toward appropriation had arguably positive effects: Harmon’s dance became world-renowned, and she eventually received proper credit for it. But these new standards make arbitrage a much weightier undertaking than it used to be, potentially requiring groundwork in coordinating permission and approval from originators.
In the past decade, some observers have wondered whether cultural innovation is slowing down. They’ve pointed to the stultifying effects of legacy IP at the box office, the way fast fashion has flattened any genuine sense of clothing trends, the indefatigability of Taylor Swift’s ongoing pop-chart dominance. The devaluing of cultural arbitrage—and the decrease in instances of hybridization—is certainly an additional factor to be considered. This is not just a problem for hipsters, however; it ends up affecting everyone who enjoys participating in popular art with other people. The wider entertainment industry always needs new ideas, and with reduced instances of cultural arbitrage, few that come to mainstream consumers now feel particularly valuable.
Some countervailing trends might organically reenergize cultural arbitrage over time. The move from billion-user platforms back to balkanized networks on clubbier apps such as Discord could allow savvy individuals to step in and bridge distinct worlds. We also may seek to reduce the amount of information shared online—keeping information exchange personal and limited to real life may restore some value to what tastemakers know. Restaurant reservations have become valuable for this very reason: There are limited seats in a real place. The Canadian indie-music project Cindy Lee recently released a double album, available for download only on GeoCities and as a YouTube stream rather than on streaming sites such as Spotify. The self-created scarcity gave the album palpable buzz, and the lack of easy access didn’t get in the way of critical reviews or online discussion.
The internet arrived at a time when we gained social clout from arbitraging information, so our first instinct was to share information online. Perhaps we are now entering an era of information hoarding. This may mean that, for a while, the most interesting developments will happen somewhere off the grid. But over time, this practice will restore some value to art and cultural exploration, and bring back opportunities for tastemaking. Whatever the case, we first must recognize the role that arbitrage played in preventing our culture from growing stale while literally making us friends along the way. Winning respect by sharing video-game cheat codes may be a thing of the past, but we need to promote new methods for innovators and mediators to move the culture—otherwise it may not move much at all.
