uh the the thesis of the book we were
why is it that democratization produced
a politics of grievance and resistance
and resentment and one the simplest
is that uh democratization was imitation
uh uh is associated with the confession
that the other is superior you’re
and of course that produces resentment
particularly if i could give you just
one i think uh
very revealing example
of how this uh how this developed let’s
take hungary as an example
the hungarians took standard model
privatization which uh uh developed in
they tried they applied it in a society
with no private capital
the consequence of this was in a way we
should have seen it ahead of time
was that managers took the assets of
and uh used that to buy the enterprises
creating their own private wealth and uh
this was the beginning of the
development of an appalling inequalities
in these uh in east european societies
post-communist societies unjustifiable
inequalities which were resented but not
the the language of liberalism which is
the language of human rights individual
was not able to capture or to articulate
the grievance uh experienced by those
who watched the public patrimony of
put into the pockets of individuals who
so the privatization of polypatrimony
was a uh was was experienced as an abuse
as a as a crime but it couldn’t be
articulated in the language
of individual rights of liberalism and
the language of liberalism particularly
the language of private property rights
be uh beca banned blessed or justified
this process which was widely viewed as
illegitimate and unjustifiable and and
personally painful if you are your best
you have two friends uh uh they’re very
equal one day
in a couple years one of them is riding
around in limousines
the other can’t afford a bus ticket one
is eating at fish restaurants every
night the other
can’t afford a piece of fresh fruit that
produces resentment so the
the the westernization process created
traumas in these societies which we
didn’t foresee and didn’t predict
but that was the seedbed for this
populist revolt against the liberal
now for those of us who grew up during
the cold war this is going to sound
passing strange but there are many on
in eastern and central europe that
consider the european union to be the
soviet union how can that be
yeah this is a very strange development
interesting and kind of
complicated so the first thing is that
in eastern europe were very eager to uh
to join in the accession process to the
and therefore accepted the post-national
of the european union that if you
remember was really developed to help
overcome its nationalistic past so it
was a very post-national language
and that um meant that this these reform
were leaving behind in their own country
national traditions they kind of didn’t
speak about them
and therefore when resentment uh or when
when the west entered into crisis
particularly in 2008
and the western model seemed to be less
than it was cracked up to be
and to present problems um a counter
in eastern europe in central eastern
europe mostly of provincial origins
who blamed everything that went wrong
on the fact that they the reform elite
had abandoned the nation
had abandoned national traditions so
this was a uh
the the accession process was a viewed
betrayal of national authenticity
uh in in addition there’s another very
interesting factor which is that the
european union was
asking all in and hungary become
you must learn how to become democracies
like we in the west
at the same time brussels was saying we
are going to write all of your laws
so while you’re becoming democratic
actually your laws are going to be
written in brussels
this produced also resentment and a
feeling that there is something
uh perverse or uh arrogant about
brussels obviously brussels is not
moscow it doesn’t have a boot
on their throats but it did it does did
a sense of uh superiority judgmentalism
and then i i need to uh emphasize that
the west did not impose democracy and
it did judge the progress of
democratization and liberalization
and in a way westerners when they
visited eastern europe i saw this a lot
i worked there of course in the 90s
uh it was as if it’s in the way tourists
visit a zoo you know
you go to the zoo you look at the
primates you say well
uh they’re like us but they’re lit
missing something they don’t have an
or they don’t have the rule of law so
you’re kind of saying you’re you’re kind
of a copy of us but you’re not a very
and probably you’ll never be much good
so there was a feeling of
being looked down upon uh which also
stirred resentment uh and let me just
say one other thing about
i think authenticity the sense these
populists are claiming that they
are those in touch with the authentic
tradition which has been
lost by westernization and
in 1989 uh it’s clear that the
nationalists were allied with the
liberals in the revolt against moscow’s
so in poland there was a lot of
basically trying to get away from russia
was a very important motivation now they
speak the language of nationalism at the
time probably because it was not a
language welcome in brussels
but also because this was the period of
milosevic you know the bloody side of
nationalism and milosevic was a
communist communist so a man like
kaczynski would never
echo milosevic so there was the language
of nationalism was subdued
and when after 2008 2014 the immigration
these populist knees near felt freed
from having to
to cover their nationalism with the
language of liberalism so
it it it had felt like a kind of cage
in which they were trapped and they
broke out of it
and returned to this kind of nativist uh
way of feeling which had always been
there but had been muffled so it was
that’s part of the why populism seems
authentic to them
well let’s extend your metaphor a little
further if we want to talk about the
number one primate in the zoo boy this
is a terrible analogy
uh should we ask about russia here why
didn’t i i mean
the the many of the central and eastern
european countries did sort of flirt
liberal democracy for a while before
adopting illiberal democracy that they
have today but russia never did
why why did russia never try it well i
mean first of all you have to remember
that in the soviet union
elites have been have found it very easy
fake democracy have fake elections
because they’ve been faking communism
for at least two decades before
uh they were sort of dressed up this way
let’s pretend we’re having to
have elections these are all rigged of
and uh we know he’s going to win and
there’s not really any competition
that was very easy for them to do they
also in russia by the way
they they had a communist training told
them that democracy is just
a trick by which elites uh deceive their
and hold on to power capitalism is just
really an elite project to
exploit the working classes and so on so
very comfortable with that idea of
but in the end basically uh russia
was so injured i mean the main thing to
understand about the russian
situation is they lost huge part of
uh a huge number of their population
they lost their superpower status it was
it was a huge injury to the self-image
of russians which was not true in
eastern europe that they didn’t
eastern europeans didn’t have this
imperial swagger this imperial
claims that they were you know on the
top of the world
uh and actually exporting their own
elsewhere so that was a very strong and
i think the so the russians for
a couple decades were pretty happy with
just faking democracy and
but in the end as putin came to power
the resentment of being treated as
citizens as being looked down upon as
being taught lessons
by the west boiled over and uh the
went from this like faking a democracy
to a what we call aggressive imitation
uh that is
imitation of the west which is designed
to humiliate the west
uh which is designed to show that the
west is hypocritical so for example
in the speech he gave putin gave
justifying the annexation of
crimea he basically imitated word for
uh western speeches about the
independence of kosovo
human rights national self-determination
and so forth but this was
very much a kind of imitation meant to
expose the west’s
hypocrisy and uh yes i think that’s
i think that’s a good uh way to
understand the putin regime which is not
people often uh act as if putin is a
great strategist and it is true that
beforehand well but he’s not a great
his main aim which is not strategic and
helping russia redevelop itself is to
expose the west as hypocritical that’s
obsession uh and i think that’s a
blind alley that’s a dead end maybe a
blind alley but most days of the week
it’s not that hard to do
whoops there’s my little editorial
comment uh let me try this
do we have to come to the unhappy
that liberalism as we understand it is
really not exportable
to cultures that are if i can put it
this way wired differently
from those of us in the west i think
one of the big lessons of the 2003 war
is that uh trying to impose a
democratic system after a six-week
in a country where three-quarters of the
population married their first cousin
it’s a completely different social world
you can’t just you know uh
impose something like this and that that
was such a lesson even though
our uh uh international internationalist
humanitarian internationals uh went over
with the uh crude and i think uh
defenseless uh idea that the only
legitimate authority with whom we are
going to deal are going to be authority
i think it’s very good to help so the
listeners to contrast what
how we behaved in afghanistan and how
the americans behaved in afghanistan and
how they behaved
in iraq and afghanistan we had been
there for decades we
knew all the warlords we didn’t say to
the warlords you must be elected
before we negotiate with you but in iraq
the religious leaders the tribal shakes
were set aside we had this
fake ideological belief that we have to
create authority by elections which of
course is a
is a uh it is based on historical
democracy is a tiny spot in human
it has cute enormously complicated
it doesn’t we we’re confusing the
absence of obstacles with the presence
of preconditions we thought if you get
rid of saddam
you’re going to have democracy just like
if you get rid of communist elite you’re
going to have democracy
and this was an illusion it’s a
democratic ideology that
idea was uh is is is it
uh uh ex exposes a kind of disgraceful
historical ignorance which was uh at the
basis of much of american foreign policy
in the post-cold war era we’ve got about
five minutes to go here so let me try a
couple more questions with you
your book now suggests that we’ve
entered an age of illiberal
imitation how do you see that
well it’s a strange uh fact that uh
president trump seems to be uh uh
accepting putin’s uh a strategic goal of
dismantling the european union
of destroying all of the international
organizations created by the united
states after world war
ii uh and he’s at war not only with the
wto the who in
all the world america made seems to be
the liberal world order seems to be
something that trump himself
is uh attacking so that is a a kind of
imitation of and he’s using the rhetoric
nationalist rhetoric anti-immigrant
of orban and kaczynski uh and the
uh language and also by the way
uh he’s the first american president who
has not said we deserve to rule the
world because we’re morally superior
i mean that’s a kind of not a very
likable uh uh position to take but every
american president has taken that
trump says no no we’re just like
everyone else uh
well what i was personally don’t you
is that again be a tough case for him
personally to make it
imitate him personally yes i would say
but he of course
his basic uh thing is he resents
this is sort of the trump world view is
he resents terribly
the countries that imitate our uh
or or are horning in on our market share
and so on so
he’s a person who has claimed i think
the first american president ever
to say that america is the greatest
victim of the americanization
of the world so that’s part of it but i
wouldn’t like uh to say a word about
uh the current crisis we’re in and i’m
i’ve been asking myself and my colleague
we’ve been speaking about this as well
what does the was the current pandemic
tell us about the trauma of liberalism
and the the competition between
liberalism and populism
uh because in a way uh the
the previous crises of liberalism 19
uh the uh 2001 in which it turned out
defending human rights the whole uh idea
of defending human rights as the primary
seemed to give way to the battle against
terrorism in which rights were viewed as
a trojan horse for our enemies
2008 which really showed that our
i didn’t know what it was doing so that
also uh really hurt our prestige to uh
in which the migrant crisis uh made
people feel like open borders
were a threat to western civilization
and so on all these things have
combined and and we’re under a
uh we’re living in a time where those
three crises have seemed to be
accumulating in the present one
and weakening the liberal commitment to
globalization and so forth
openness uh at the same time
every political order has its own
disorders and populism
is producing its own discontents and
these populist leaders
bolsonaro trump authoritarians like
strangely enough they are very afraid of
they are not you know taking hold of it
and using it
to uh to uh uh to their benefit
uh there’s a way in which this kind of
uh had is is challenging any kind of
the archaeon regimes we saw that in
china where they’re hiding evidence
we see it in the west some some
democratic societies have done well some
authoritarian societies have done okay
it doesn’t seem to fit well into our
uh polarities so i think that’s and the
way i would put this in the end the
question open to us
is now in the future is is the pandemic
increase our reliance on science and
belief in fact consciousness or is it
uh create a uh is the panic
of and fear going to lead to more
uh and more xenophobia uh uh
migrant bashing uh so we’re on a knife’s
i think and the the fate of the liberal
model and the liberal commitment to
rational decision making
uh and uh the uh uh
and its competition with these populist
sloganeers who are always trying to sell
something has not been decided
i definitely do not think the populists
have the upper hand
i think the populists are also
struggling and they’re
not finding this an easy crisis to deal
so although i don’t believe that the
west is covering itself with glory
uh the whale and liberal regimes are
also struggling because
uh the the disease is hard to understand
and it’s hard to master
i i definitely don’t believe that uh the
current crisis is going to
really decide the question in favor of
of the populists well why don’t i
freelance then and just uh re-title your
book the light that’s failed
so far and we’ll leave it there uh
i want to thank you very much professor
holmes for joining us on tvo tonight
congratulations again on your gelber
uh for anybody who wants to pick it up
yvonne krastieff and stephen holmes
collaborated on the light
that failed are reckoning take good care
and thanks for joining us on tvo tonight
thank you steve
the agenda with steve pakin is brought
to you by the chartered professional
accountants of ontario
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Mark’s influence is staggering, far beyond that of anyone else in the private sector or in government. He controls three core communications platforms — Facebook, Instagram and WhatsApp — that billions of people use every day. Facebook’s board works more like an advisory committee than an overseer, because Mark controls around 60 percent of voting shares. Mark alone can decide how to configure Facebook’s algorithms to determine what people see in their News Feeds, what privacy settings they can use and even which messages get delivered. He sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it.
Mark is a good, kind person. But I’m angry that his focus on growth led him to sacrifice security and civility for clicks. I’m disappointed in myself and the early Facebook team for not thinking more about how the News Feed algorithm could change our culture, influence elections and empower nationalist leaders. And I’m worried that Mark has surrounded himself with a team that reinforces his beliefs instead of challenging them.
The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar. After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.
Facebook’s dominance is not an accident of history. The company’s strategy was to beat every competitor in plain view, and regulators and the government tacitly — and at times explicitly — approved. In one of the government’s few attempts to rein in the company, the F.T.C. in 2011 issued a consent decree that Facebook not share any private information beyond what users already agreed to. Facebook largely ignored the decree. Last month, the day after the company predicted in an earnings call that it would need to pay up to $5 billion as a penalty for its negligence — a slap on the wrist — Facebook’s shares surged 7 percent, adding $30 billion to its value, six times the size of the fine.
The F.T.C.’s biggest mistake was to allow Facebook to acquire Instagram and WhatsApp. In 2012, the newer platforms were nipping at Facebook’s heels because they had been built for the smartphone, where Facebook was still struggling to gain traction. Mark responded by buying them, and the F.T.C. approved.
Neither Instagram nor WhatsApp had any meaningful revenue, but both were incredibly popular. The Instagram acquisition guaranteed Facebook would preserve its dominance in photo networking, and WhatsApp gave it a new entry into mobile real-time messaging. Now, the founders of Instagram and WhatsApp have left the company after clashing with Mark over his management of their platforms. But their former properties remain Facebook’s, driving much of its recent growth.
.. When it hasn’t acquired its way to dominance, Facebook has used its monopoly position to shut out competing companies or has copied their technology.
The News Feed algorithm reportedly prioritized videos created through Facebook over videos from competitors, like YouTube and Vimeo. In 2012, Twitter introduced a video network called Vine that featured six-second videos. That same day, Facebook blocked Vine from hosting a tool that let its users search for their Facebook friends while on the new network. The decision hobbled Vine, which shut down four years later.
Snapchat posed a different threat. Snapchat’s Stories and impermanent messaging options made it an attractive alternative to Facebook and Instagram. And unlike Vine, Snapchat wasn’t interfacing with the Facebook ecosystem; there was no obvious way to handicap the company or shut it out. So Facebook simply copied it.
Facebook’s version of Snapchat’s stories and disappearing messages proved wildly successful, at Snapchat’s expense. At an all-hands meeting in 2016, Mark told Facebook employees not to let their pride get in the way of giving users what they want. According to Wired magazine, “Zuckerberg’s message became an informal slogan at Facebook: ‘Don’t be too proud to copy.’”
(There is little regulators can do about this tactic: Snapchat patented its “ephemeral message galleries,” but copyright law does not extend to the abstract concept itself.)
As a result of all this, would-be competitors can’t raise the money to take on Facebook. Investors realize that if a company gets traction, Facebook will copy its innovations, shut it down or acquire it for a relatively modest sum. So despite an extended economic expansion, increasing interest in high-tech start-ups, an explosion of venture capital and growing public distaste for Facebook, no major social networking company has been founded since the fall of 2011.
As markets become more concentrated, the number of new start-up businesses declines. This holds true in other high-tech areas dominated by single companies, like search (controlled by Google) and e-commerce (taken over by Amazon). Meanwhile, there has been plenty of innovation in areas where there is no monopolistic domination, such as in workplace productivity (Slack, Trello, Asana), urban transportation (Lyft, Uber, Lime, Bird) and cryptocurrency exchanges (Ripple, Coinbase, Circle).
I don’t blame Mark for his quest for domination. He has demonstrated nothing more nefarious than the virtuous hustle of a talented entrepreneur. Yet he has created a leviathan that crowds out entrepreneurship and restricts consumer choice. It’s on our government to ensure that we never lose the magic of the invisiblehand. How did we allow this to happen?
Since the 1970s, courts have become increasingly hesitant to break up companies or block mergers unless consumers are paying inflated prices that would be lower in a competitive market. But a narrow reliance on whether or not consumers have experienced price gouging fails to take into account the full cost of market domination. It doesn’t recognize that we also want markets to be competitive to encourage innovation and to hold power in check. And it is out of step with the history of antitrust law. Two of the last major antitrust suits, against AT&T and IBM in the 1980s, were grounded in the argument that they had used their size to stifle innovation and crush competition.
As the Columbia law professor Tim Wu writes, “It is a disservice to the laws and their intent to retain such a laserlike focus on price effects as the measure of all that antitrust was meant to do.”
Facebook is the perfect case on which to reverse course, precisely because Facebook makes its money from targeted advertising, meaning users do not pay to use the service. But it is not actually free, and it certainly isn’t harmless.
Facebook’s business model is built on capturing as much of our attention as possible to encourage people to create and share more information about who they are and who they want to be. We pay for Facebook with our data and our attention, and by either measure it doesn’t come cheap.
I was on the original News Feed team (my name is on the patent), and that product now gets billions of hours of attention and pulls in unknowable amounts of data each year. The average Facebook user spends an hour a day on the platform; Instagram users spend 53 minutes a day scrolling through pictures and videos. They create immense amounts of data — not just likes and dislikes, but how many seconds they watch a particular video — that Facebook uses to refine its targeted advertising. Facebook also collects data from partner companies and apps, without most users knowing about it, according to testing by The Wall Street Journal.
Some days, lying on the floor next to my 1-year-old son as he plays with his dinosaurs, I catch myself scrolling through Instagram, waiting to see if the next image will be more beautiful than the last. What am I doing? I know it’s not good for me, or for my son, and yet I do it anyway.
The choice is mine, but it doesn’t feel like a choice. Facebook seeps into every corner of our lives to capture as much of our attention and data as possible and, without any alternative, we make the trade.
The vibrant marketplace that once drove Facebook and other social media companies to compete to come up with better products has virtually disappeared. This means there’s less chance of start-ups developing healthier, less exploitative social media platforms. It also means less accountability on issues like privacy.
Just last month, Facebook seemingly tried to bury news that it had stored tens of millions of user passwords in plain text format, which thousands of Facebook employees could see. Competition alone wouldn’t necessarily spur privacy protection — regulation is required to ensure accountability — but Facebook’s lock on the market guarantees that users can’t protest by moving to alternative platforms.
The most problematic aspect of Facebook’s power is Mark’s unilateral control over speech. There is no precedent for his ability to monitor, organize and even censor the conversations of two billion people.
Facebook engineers write algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family. These rules are proprietary and so complex that many Facebook employees themselves don’t understand them.
In 2014, the rules favored curiosity-inducing “clickbait” headlines. In 2016, they enabled the spread of fringe political views and fake news, which made it easier for Russian actors to manipulate the American electorate. In January 2018, Mark announced that the algorithms would favor non-news content shared by friends and news from “trustworthy” sources, which his engineers interpreted — to the confusion of many — as a boost for anything in the category of “politics, crime, tragedy.”
Facebook has responded to many of the criticisms of how it manages speech by hiring thousands of contractors to enforce the rules that Mark and senior executives develop. After a few weeks of training, these contractors decide which videos count as hate speech or free speech, which images are erotic and which are simply artistic, and which live streams are too violent to be broadcast. (The Verge reported that some of these moderators, working through a vendor in Arizona, were paid $28,800 a year, got limited breaks and faced significant mental health risks.)
As if Facebook’s opaque algorithms weren’t enough, last year we learned that Facebook executives had permanently deleted their own messages from the platform, erasing them from the inboxes of recipients; the justification was corporate security concerns. When I look at my years of Facebook messages with Mark now, it’s just a long stream of my own light-blue comments, clearly written in response to words he had once sent me. (Facebook now offers a limited version of this feature to all users.)
The most extreme example of Facebook manipulating speech happened in Myanmar in late 2017. Mark said in a Vox interview that he personally made the decision to delete the private messages of Facebook users who were encouraging genocide there. “I remember, one Saturday morning, I got a phone call,” he said, “and we detected that people were trying to spread sensational messages through — it was Facebook Messenger in this case — to each side of the conflict, basically telling the Muslims, ‘Hey, there’s about to be an uprising of the Buddhists, so make sure that you are armed and go to this place.’ And then the same thing on the other side.”
Mark made a call: “We stop those messages from going through.” Most people would agree with his decision, but it’s deeply troubling that he made it with no accountability to any independent authority or government. Facebook could, in theory, delete en masse the messages of Americans, too, if its leadership decided it didn’t like them.
Mark used to insist that Facebook was just a “social utility,” a neutral platform for people to communicate what they wished. Now he recognizes that Facebook is both a platform and a publisher and that it is inevitably making decisions about values. The company’s own lawyers have argued in court that Facebook is a publisher and thus entitled to First Amendment protection.
No one at Facebook headquarters is choosing what single news story everyone in America wakes up to, of course. But they do decide whether it will be an article from a reputable outlet or a clip from “The Daily Show,” a photo from a friend’s wedding or an incendiary call to kill others.
Mark knows that this is too much power and is pursuing a twofold strategy to mitigate it.
- He is pivoting Facebook’s focus toward encouraging more private, encrypted messaging that Facebook’s employees can’t see, let alone control.
- Second, he is hoping for friendly oversight from regulators and other industry executives.
Late last year, he proposed an independent commission to handle difficult content moderation decisions by social media platforms. It would afford an independent check, Mark argued, on Facebook’s decisions, and users could appeal to it if they disagreed. But its decisions would not have the force of law, since companies would voluntarily participate.
In an op-ed essay in The Washington Post in March, he wrote, “Lawmakers often tell me we have too much power over speech, and I agree.” And he went even further than before, calling for more government regulation — not just on speech, but also on privacy and interoperability, the ability of consumers to seamlessly leave one network and transfer their profiles, friend connections, photos and other data to another.
I don’t think these proposals were made in bad faith. But I do think they’re an attempt to head off the argument that regulators need to go further and break up the company. Facebook isn’t afraid of a few more rules. It’s afraid of an antitrust case and of the kind of accountability that real government oversight would bring.
We don’t expect calcified rules or voluntary commissions to work to regulate drug companies, health care companies, car manufacturers or credit card providers. Agencies oversee these industries to ensure that the private market works for the public good. In these cases, we all understand that government isn’t an external force meddling in an organic market; it’s what makes a dynamic and fair market possible in the first place. This should be just as true for social networking as it is for air travel or pharmaceuticals.
In the summer of 2006, Yahoo offered us $1 billion for Facebook. I desperately wanted Mark to say yes. Even my small slice of the company would have made me a millionaire several times over. For a 22-year-old scholarship kid from small-town North Carolina, that kind of money was unimaginable. I wasn’t alone — just about every other person at the company wanted the same.
It was taboo to talk about it openly, but I finally asked Mark when we had a moment alone, “How are you feeling about Yahoo?” I got a shrug and a one-line answer: “I just don’t know if I want to work for Terry Semel,” Yahoo’s chief executive.
Outside of a couple of gigs in college, Mark had never had a real boss and seemed entirely uninterested in the prospect. I didn’t like the idea much myself, but I would have traded having a boss for several million dollars any day of the week. Mark’s drive was infinitely stronger. Domination meant domination, and the hustle was just too delicious.
Mark may never have a boss, but he needs to have some check on his power. The American government needs to do two things: break up Facebook’s monopoly and regulate the company to make it more accountable to the American people.
First, Facebook should be separated into multiple companies. The F.T.C., in conjunction with the Justice Department, should enforce antitrust laws by undoing the Instagram and WhatsApp acquisitions and banning future acquisitions for several years. The F.T.C. should have blocked these mergers, but it’s not too late to act. There is precedent for correcting bad decisions — as recently as 2009, Whole Foods settled antitrust complaints by selling off the Wild Oats brand and stores that it had bought a few years earlier.
There is some evidence that we may be headed in this direction. Senator Elizabeth Warren has called for reversing the Facebook mergers, and in February, the F.T.C. announced the creation of a task force to monitor competition among tech companies and review previous mergers.
How would a breakup work? Facebook would have a brief period to spin off the Instagram and WhatsApp businesses, and the three would become distinct companies, most likely publicly traded. Facebook shareholders would initially hold stock in the new companies, although Mark and other executives would probably be required to divest their management shares.
Until recently, WhatsApp and Instagram were administered as independent platforms inside the parent company, so that should make the process easier. But time is of the essence: Facebook is working quickly to integrate the three, which would make it harder for the F.T.C. to split them up.
Some economists are skeptical that breaking up Facebook would spur that much competition, because Facebook, they say, is a “natural” monopoly. Natural monopolies have emerged in areas like water systems and the electrical grid, where the price of entering the business is very high — because you have to lay pipes or electrical lines — but it gets cheaper and cheaper to add each additional customer. In other words, the monopoly arises naturally from the circumstances of the business, rather than a company’s illegal maneuvering. In addition, defenders of natural monopolies often make the case that they benefit consumers because they are able to provide services more cheaply than anyone else.
Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.
Facebook is indeed more valuable when there are more people on it: There are more connections for a user to make and more content to be shared. But the cost of entering the social network business is not that high. And unlike with pipes and electricity, there is no good argument that the country benefits from having only one dominant social networking company.
Still others worry that the breakup of Facebook or other American tech companies could be a national security problem. Because advancements in artificial intelligence require immense amounts of data and computing power, only large companies like Facebook, Google and Amazon can afford these investments, they say. If American companies become smaller, the Chinese will outpace us.
While serious, these concerns do not justify inaction. Even after a breakup, Facebook would be a hugely profitable business with billions to invest in new technologies — and a more competitive market would only encourage those investments. If the Chinese did pull ahead, our government could invest in research and development and pursue tactical trade policy, just as it is doing today to hold China’s 5G technology at bay.
The cost of breaking up Facebook would be next to zero for the government, and lots of people stand to gain economically. A ban on short-term acquisitions would ensure that competitors, and the investors who take a bet on them, would have the space to flourish. Digital advertisers would suddenly have multiple companies vying for their dollars.
Even Facebook shareholders would probably benefit, as shareholders often do in the years after a company’s split. The value of the companies that made up Standard Oil doubled within a year of its being dismantled and had increased by fivefold a few years later. Ten years after the 1984 breakup of AT&T, the value of its successor companies had tripled.
But the biggest winners would be the American people. Imagine a competitive market in which they could choose among one network that
- offered higher privacy standards, another that
- cost a fee to join but had little advertising and another that would allow users to
- customize and tweak their feeds as they saw fit.
No one knows exactly what Facebook’s competitors would offer to differentiate themselves. That’s exactly the point.
The Justice Department faced similar questions of social costs and benefits with AT&T in the 1950s. AT&T had a monopoly on phone services and telecommunications equipment. The government filed suit under antitrust laws, and the case ended with a consent decree that required AT&T to release its patents and refrain from expanding into the nascent computer industry. This resulted in an explosion of innovation, greatly increasing follow-on patents and leading to the development of the semiconductor and modern computing. We would most likely not have iPhones or laptops without the competitive markets that antitrust action ushered in.
Adam Smith was right: Competition spurs growth and innovation.
Just breaking up Facebook is not enough. We need a new agency, empowered by Congress to regulate tech companies. Its first mandate should be to protect privacy.
The Europeans have made headway on privacy with the General Data Protection Regulation, a law that guarantees users a minimal level of protection. A landmark privacy bill in the United States should specify exactly what control Americans have over their digital information, require clearer disclosure to users and provide enough flexibility to the agency to exercise effective oversight over time. The agency should also be charged with guaranteeing basic interoperability across platforms.
Finally, the agency should create guidelines for acceptable speech on social media. This idea may seem un-American — we would never stand for a government agency censoring speech. But we already have limits on
- yelling “fire” in a crowded theater,
- child pornography,
- speech intended to provoke violence and false statements to manipulate stock prices.
We will have to create similar standards that tech companies can use. These standards should of course be subject to the review of the courts, just as any other limits on speech are. But there is no constitutional right to harass others or live-stream violence.
These are difficult challenges. I worry that government regulators will not be able to keep up with the pace of digital innovation. I worry that more competition in social networking might lead to a conservative Facebook and a liberal one, or that newer social networks might be less secure if government regulation is weak. But sticking with the status quo would be worse: If we don’t have public servants shaping these policies, corporations will.
Some people doubt that an effort to break up Facebook would win in the courts, given the hostility on the federal bench to antitrust action, or that this divided Congress would ever be able to muster enough consensus to create a regulatory agency for social media.
But even if breakup and regulation aren’t immediately successful, simply pushing for them will bring more oversight. The government’s case against Microsoft — that it illegally used its market power in operating systems to force its customers to use its web browser, Internet Explorer — ended in 2001 when George W. Bush’s administration abandoned its effort to break up the company. Yet that prosecution helped rein in Microsoft’s ambitions to dominate the early web.
Similarly, the Justice Department’s 1970s suit accusing IBM of illegally maintaining its monopoly on computer sales ended in a stalemate. But along the way, IBM changed many of its behaviors. It stopped bundling its hardware and software, chose an extremely open design for the operating system in its personal computers and did not exercise undue control over its suppliers. Professor Wu has written that this “policeman at the elbow” led IBM to steer clear “of anything close to anticompetitive conduct, for fear of adding to the case against it.”
We can expect the same from even an unsuccessful suit against Facebook.
Finally, an aggressive case against Facebook would persuade other behemoths like Google and Amazon to think twice about stifling competition in their own sectors, out of fear that they could be next. If the government were to use this moment to resurrect an effective competition standard that takes a broader view of the full cost of “free” products, it could affect a whole host of industries.
The alternative is bleak. If we do not take action, Facebook’s monopoly will become even more entrenched. With much of the world’s personal communications in hand, it can mine that data for patterns and trends, giving it an advantage over competitors for decades to come.
I take responsibility for not sounding the alarm earlier. Don Graham, a former Facebook board member, has accused those who criticize the company now as having “all the courage of the last man leaping on the pile at a football game.” The financial rewards I reaped from working at Facebook radically changed the trajectory of my life, and even after I cashed out, I watched in awe as the company grew. It took the 2016 election fallout and Cambridge Analytica to awaken me to the dangers of Facebook’s monopoly. But anyone suggesting that Facebook is akin to a pinned football player misrepresents its resilience and power.
An era of accountability for Facebook and other monopolies may be beginning. Collective anger is growing, and a new cohort of leaders has begun to emerge. On Capitol Hill, Representative David Cicilline has taken a special interest in checking the power of monopolies, and Senators Amy Klobuchar and Ted Cruz have joined Senator Warren in calling for more oversight. Economists like Jason Furman, a former chairman of the Council of Economic Advisers, are speaking out about monopolies, and a host of legal scholars like Lina Khan, Barry Lynn and Ganesh Sitaraman are plotting a way forward.
This movement of public servants, scholars and activists deserves our support. Mark Zuckerberg cannot fix Facebook, but our government can.
They’re imitators. They’re operators. And they’re turning their teacher’s lessons against him.The problem with being Donald Trump isn’t just being Donald Trump. It’s all the other, lesser Trumps around you. It’s the versions of yourself that you create, the echoes of yourself that you inspire. They’ll devour you in the end... From the master she learned how to draw and hold the spotlight: Mete out revelations. Hurl accusations. Contradict yourself. Leave everyone gasping, gawking and coming back for more... “Trump and Omarosa Are Kindred Spirits” reads the headline on a new Bloomberg column by Tim O’Brien.. The president, he notes, was “fascinated by her self-absorption and nastiness.” Trump stares into every mirror he passes.
“She may be the purest of all the Trump characters,” an unnamed former Trump administration official told Axios’s Jonathan Swan. “She may be the most Trumpian.” No maybe about it.
She made secret tapes, just like Michael Cohen, Trump’s former lawyer. No one should be surprised, least of all Trump. When you grease the walls of your sanctum with lies and put fun-house mirrors everywhere, is it any wonder that the dazed people inside try to protect themselves with a lifeline like proof?
And didn’t Trump himself record people who called him at Trump Tower and later taunt James Comey by suggesting that he had audio of their conversations? Imitation isn’t just the sincerest form of flattery. It’s the cleverest kind of revenge.
Ask Michael Avenatti, Stormy Daniels’s lawyer. He’s flirting with a presidential bid or at least realizing that such a flirtation is a brand multiplier. Last week he visited Iowa, and not for the soybeans. He made a big speech. Said that when they go low, he’ll go subterranean. He’ll tunnel. He’ll spelunk.
He’s not just Trump’s adversary. He’s Trump’s analogue, with a similar timbre and bag of tricks. Like Trump, he vents his scorn in crude put-downs. Like Trump, he views media ubiquity as a credential in its own right... Avenatti was “a perfect foil for Trump, because he actually sees the world just like Trump does.”.. In a way, Cohen sort of is Trump, too, with shady ties, bendy rules and limber ethics. His exposure is now Trump’s vulnerability. There’s actually a scene in Manigault Newman’s book where she and Cohen watch Trump eat a piece of paper rather than leave it around for presidential record-keepers... Manafort faked an altitude of affluence that he no longer possessed, forgoing any salary as Trump’s campaign chairman, because he suspected that this would impress Trump, who has exaggerated his own wealth.
- His hunger for attention became Rudy Giuliani; his
- thirst for pomp, Scott Pruitt; his
- taste for provocation, Avenatti; his t
- alent for duplicity, Manigault Newman.They’re an army of emulators, adding up to Trump. And they’re on the march.