I have found the recent demonization of Facebook and its founder and CEO Mark Zuckerberg fascinating and revelatory. We have discovered that during the 2016 presidential campaign the social media giant played unwitting host to hundreds of Russian bots and fake accounts peddling misinformation about the candidates. It has also attracted bad publicity for allowing third parties to improperly use customers’ personal data. Cambridge Analytica ignored a 2011 request from Facebook to destroy account-holder details and instead deployed the information to drum up business from, among others, the Trump campaign.
Zuckerberg was dragged in front of two congressional committees for a verbal flogging. There’s serious talk about significant regulation, especially by the Europeans who have been looking to limit the scope and profits of American Internet firms for some time.
There’s no doubt Facebook messed up. It has been naïve. It was undoubtedly cavalier in its treatment of important information, and there have been consequences. The social network’s shares lost more than 10 percent of their value immediately following the revelation about Cambridge. It’s now experiencing a net decline — rather than the traditional growth — in North America accounts for the first time.
But think for a moment about the social value Facebook generates — above and beyond employment, wealth creation, and taxes paid — something Americans should be much more upset with the company about. It links hundreds of millions of people in a virtual community where they can share news, gossip, and photos. It brings the infirm, less affluent, and time-constrained into the lives of family and friends. It allows companies, particularly small ones without budgets for extensive web presence, to reach customers in their neighborhood and around the world. Civic groups use Facebook Live to stream video of events to people who can’t be there. The social network provides a way for parties, candidates, and other political actors to inform discerning citizens and enrich our democracy by leveling the playing field. All of this is free. Facebook is, essentially, a public good that — unlike others such as schools, national defense, and PBS — is underwritten largely by people who aren’t its users.
All of this has been lost in the vitriol. Facebook’s mass excoriation is a parable of our times. This story is about the corporation as service. Our present culture of entitlement has us believe Facebook should always place public interest over its own, be directly accountable to mass opinion, and serve our individual personal needs as if we had granted it the power of attorney. But the company can’t do all these things because, if it did, it wouldn’t exist. Without incentives to generate private gains Facebook could not have attracted the labor and capital necessary to make its wonderful product.
Facebook made about $4.8 billion in 2017 and still has a market capitalization of about 100 times that. It does this by selling advertising and its platform to thousands of software developers who want to reach customers interested in their apps. This is why it continues to serve. As Adam Smith wrote in “The Wealth of Nations:” “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”
When corporations don’t faithfully serve we believe the average citizen has been mistreated. We point fingers and become indignant. Should we be surprised that by posting our personal information on a huge publicly accessible platform we placed it at the risk of exposure? Given the scale of Facebook’s operations, the Cambridge incident may not be easy to forgive, but it was inevitable.
Zuckerberg and his successful company have been caught up in the general vilification of entrepreneurs and their enterprises that has increasingly become part of American public life. The market has extracted a price for Facebook’s mistakes, but for most Americans that’s not sufficient.They should be careful what they wish for.
Andy Taylor is professor of Political Science at the School of International and Public Affairs at N.C. State University. He does not speak for the university.