Facebook

Mark Zuckerberg, Crony Capitalist

Don't let Facebook rig the rules in its favor.

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Please, regulate me!

That was Facebook founder Mark Zuckerberg's message to Congress recently.

"Lawmakers often tell me we have too much power over speech, and frankly I agree," he wrote in an op-ed. "(W)e shouldn't make so many important decisions…on our own."

It sounds so self-sacrificing.

But give me a break. Big companies use regulation to their advantage.

His smaller competitors can't afford the squads of "compliance officers" that Facebook employs.

"You, as a company, welcome regulation?" Sen. Lindsey Graham (R-S.C.) asked Zuckerberg during a congressional hearing.

"If it's the right regulation, then yes," replied the CEO.

"Would you work with us in terms of what regulations you think are necessary in your industry?"

"Absolutely," replied Zuckerberg.

Zuckerberg's no dope. He sees which way the wind is blowing. He issued his plea to be regulated after receiving months of criticism from politicians.

If he cooperates early and enthusiastically, Facebook is likely to get to work with the regulators to shape the rules.

This is sad for two reasons.

One, the First Amendment says Congress "shall make no law…abridging the freedom of speech." I'd think Zuckerberg would know that, but no, he called for government to "require companies to build systems for keeping harmful content to a bare minimum."

Currently, his own website is a wonderful forum for all kinds of useful speech. There's hateful speech, too, but it's the private company's job to decide whether to police that, not government's.

The second reason Facebook working with regulators is sad is that if anyone should fight for permissionless, unregulated innovation, it should be people like Mark Zuckerberg.

It's no accident that the amazing wealth creation that brought us Facebook, Google, Instagram, Microsoft, Amazon, etc., happened in the two big metropolitan areas farthest from Washington, D.C.

As Yaron Brook, chairman of the Ayn Rand Institute, says: "Microsoft in the early 1990s was the largest company in the world, incredibly successful. They spent exactly zero dollars on lobbying, on cronyism, on lawyers. They had no presence in Washington, D.C.—not a single lawyer, not a single building."

Instead of investing in lawyers and lobbyists, Microsoft spent money on technology.

But then the sleepy codgers in Washington, D.C., noticed Microsoft's success.

"They were literally brought in front of Congress," recounts Brook, "yelled at by a Republican, Orrin Hatch from Utah. He said, 'You guys need to get involved here in Washington, D.C. You need to build a building here, hire lawyers here.'… The unspoken text: 'You need to bribe me.'"

The company didn't immediately obey.

"Microsoft said, you know what? You leave us alone," says Brook. "We're busy. We're running the biggest company in the world. There's a lot to do!"

But that wasn't the end of it.

"Six months later, knock on the door at Microsoft: 'We're from the Justice Department and we're here to prosecute you because you're offering…customers a product for free,'" paraphrases Brook. "Internet Explorer. At a time when (customers) were paying money for Netscape, they offered it for free."

The government called that a violation of anti-trust law. Free services might make Microsoft too popular.

"For 10 years they had to fight that lawsuit," says Brook. "They lost. They got regulated. They got controlled. Guess how much Microsoft spends today in Washington, D.C.? Tens of millions of dollars."

A company that should focus on pleasing customers had to start thinking more about pleasing government.

Today, "they have a beautiful building about equal distance from the White House and from Congress. They have lawyers, lobbyists, they spend a lot of money," says Brook, "and indeed a lot of other tech companies like Google learned the lesson."

The lesson is that if you don't want politicians destroying your business, you must go to Washington to give them money. Kiss their rings.

"A lot of the lobbying and so-called cronyism," explains Brook, "is self-defense."

Yes, Zuckerberg is acting in self-defense, but it's still ugly. And this crony capitalism is a threat to future innovation. Entrepreneurs will learn to do things government's way instead of heeding the market.

"If we really want to end cronyism, reduce the power of politicians over our lives," argues Brook, correctly. "Separate economics from state."

COPYRIGHT 2019 BY JFS PRODUCTIONS INC.
DISTRIBUTED BY CREATORS.COM

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  1. I agree with this but I blame not Mark Zuckerberg but users like me. Because Facebook and Twitter gave us the power to fight hate speech and incitement across the world from the comfort and safety of our living rooms and instead of doing that we sign petitions demanding social media ‘do more’ and then pat ourselves on the back for our slacktivism. Even worse, when the peacemakers amongst us were banned from social media for defending free speech, we were silent or even blamed the victim. We let these problems run rampant and it’s no surprise that the social media companies now spurn our hypocrisy and turn to government to solve the problem. The result will be that even more companies decide that comment sections are too much of a liability and shut them down and direct all traffic to Facebook, which then has complete control to ban us permanently from the internet.

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  2. Hate the game, not the player.

  3. Bribing politicians to get what you want (like an ambassadorship or US Attorney gig) is just really persuasive speech but bribing your child’s way into college is a terrible crime.

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  6. Zuckerberg: “Government, help save me from the monster I created.”

    1. not even close. Zuckerberg: “Government, help protect the business that I built from competition, now that I have ample resources and personnel to perform compliance and whatever other bureaucratic nonsense you require. I’ve already built it into my business case, and I know startups can’t afford it, so let’s get cozy and I’ll help you destroy my opponents.”

      fixed it for you …

      1. better scenario?

      2. It’s like Howard Stern. Hey man, Howie maybe you should comment on censored comedians.

        ‘Nah. I’m good. I made my money. So now I’ll virtue signal from here while I yell at Gary.’

  7. Congress “shall make no law?abridging the freedom of speech.”

    Now, that’s not so hard, is it?

    1. The should have put a full stop after the fifth word.

  8. Most anti-trust laws are complete nonsense. And even if they weren’t, they are applied in completely nonsensical ways.

    Just as common teaching on Carson’s Silent Spring was ridiculously steeped in inaccurate summaries of reality, US Education on anti-trust law is equally terrible. Around the time that Microsoft was being put up on Anti Trust charges, I started reading a lot more about the history of Anti Trust in this country. The Mises institute has a great summary of what I learned here.

    Essentially, Anti Trust laws have always been the tool of politically connected magnates using populist horror stories to protect one business from another. The claim has always been that by putting competitors out of business, consumers will be harmed because the new Monopoly no longer has competition. This has never been observed. What has been observed is companies already granted a legal monopoly by the state harming the consumer (c.f. Ma Bell).

    I have no love of Google, Facebook or Apple but I do use their products. To the extent that they continue to serve my needs, I will continue to use them. The worst possible outcome is for people angry about their politics to chase them into the arms of government. If you think google with its warchest of hundreds of billions of dollars will come out of that legal wrangling without an advantage, you are deluding yourself.

    1. ” This has never been observed. What has been observed is companies already granted a legal monopoly by the state harming the consumer”

      In point of fact, it’s very nearly impossible to a true monopoly to either develop in the first place or sustain itself without government force supporting it.

    2. Many even complain about how MSFT came out of its antitrust proceedings. Much of their penalty was delivering software and hardware to elementary schools around the country. Consider that for a second. As punishment for trying to defeat Netscape with a free copy of IE (which at the time was superior to Netscape, IMHO), Microsoft gave away its entire suite of OS and Applications to schools around the country, effectively kicking apple out for the better part of a decade.

      Interestingly, Microsoft’s dominance of school productivity software is only recently being challenged by Google, who gives its Google Suite services for a pittance compared to MS Office applications. What will happen when this is used as evidence of Google’s antitrust guilt? What market will Google be handed as punishments?

      Those, like Instapundit, who think DOJ meddling in this market will somehow crush their ideological enemies in the tech sector are in for a very rude awakening.

    3. well said. you forgot cable tv & nearly every other “public utility” in the “companies already granted a legal monopoly by the state harming the consumer ” bucket, but covered the bases beautifully.

  9. >>>”require companies to build systems for keeping harmful content to a bare minimum.”

    he and his stupid face can fuck off.

  10. “”Six months later, knock on the door at Microsoft: ‘We’re from the Justice Department and we’re here to prosecute you because you’re offering?customers a product for free,'” paraphrases Brook. “Internet Explorer. At a time when (customers) were paying money for Netscape, they offered it for free.”

    The government called that a violation of anti-trust law. Free services might make Microsoft too popular.

    “For 10 years they had to fight that lawsuit,” says Brook. “They lost. They got regulated. They got controlled. Guess how much Microsoft spends today in Washington, D.C.? Tens of millions of dollars.””

    I see the point, and in large part, agree with it. however, aren’t we forgetting a small part of this story?? you know, the part where they made IE an intrinsic part of the operating system so nothing would function if you tried to remove it?? where they made it very difficult to use another browser & constantly defaulted back to IE, no matter what you did to the user settings?? I owned a Netscape license in 1994 – I remember how miserable dealing with MS was, and how hard they made to use anything that worked better but was NIH (not invented here). that is not to say that they did a lot of great stuff by being left alone, but there was more to the situation than the “anticompetitive practice” of offering ‘something for free that might become too popular’. there were _actual_ anticompetitive practices involved too.

    1. The attempt to streamline the interface so that your browsing and windows experiences were more similar was actually awesome. By the mid 90s, Netscape was an inferior product browser vs browser. IE had implemented the DOM model, while Netscape was still using (blech) layers, and that made working with IE (from a developer perspective) way easier. Netscape’s development team made that browser terrible, then complained about anti-competitive practices after their bloated, buggy software turned people off.

      To the extent that IE was part and parcel of Windows, so what? If it resulted in a product the customer wanted to buy, who cares? This same effect happened all through the early dot com days. The common question for new start ups was, “What will you do when Yahoo decides to offer a competing service” And the answer was typically “Get bought up”. It was only when Google supplanted Yahoo as the main purveyer of search that Yahoo’s value as a Portal went into the dustbin.

      Consider that the same could have happened to Windows. Our world might have a totally different look if MSFT had been supplanted by linux or another OS that had integrated its own browser (or a plugin type architecture). But the Government made sure that millions of kids would be using Windows as they went through school, and drew arbitrary lines between OS and other software. That has had a bigger effect on the technical development of the industry than many realize.

  11. Zuckie doesn’t allow people with differing political opinions on his site and wants to regulate speech on other sites as well as long as the speech agrees with all the other Big Tech liberal fascist beliefs.
    Hey, Zuckie
    If you want censorship, go to Cuba.
    They’ve know how to do it because they’ve been doing for decades.

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  13. But there are better ways to do this w/o government regulation. There are plenty of industry trade groups that provide better and more dynamic regulation than the government ever could. PCI is one, the FLA (Fair Labor Association) is another. Both do an excellent job and have the flexibility to change with new markets and technologies.

    Government regulation should be a last resort. Zuckerberg is asking for the gov’t to take over so he can send lobbyists to help write this legislation. In the end the consumer loses, and FB has new crony powers. He’s asking for this because Apple asked for it. Apple is asking for it to be cronies toward Google and Facebook. So Facebook wants to be at the table when it is written so they can fuck us and Apple over at the same time.

    Remember, kids, these are the same companies who support Net Neutrality to fuck you and your ISP over.

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  15. Orrin Hatch is from Utah. So are two of the companies that Microsoft put out of business: WordPerfect and Novell. When your products suck, get big brother to go after your competition.

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