Oh dear. Facebook is at it again. The world’s most valuable social network is once again claiming that its for-profit technology will empower the powerless. Facebook is again pursuing its selfish corporate goals in the selfless language of civic altruism. What benefits Facebook, the $540 billion Silicon Valley social media leviathan is once again trying to tell us, will – surprise, surprise - also benefit humanity.
This latest chapter in Facebook’s hubristic collapsing of its corporate interests with the interests of mankind are associated with Libra - its new cryptocurrency introduced, with much fanfare, this week. At the moment, Libra isn’t much more than a slick digital brochure produced by Facebook slick marketers. Libra is the idea of a global digital currency built on blockchain technology running on the Facebook platform and backed by a consortium 27 other corporate partners including Microsoft, Mastercard, Uber and Paypal.
“Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people,” Facebook modestly introduced its plans for the new currency in a widely circulated White Paper this week.
With Libra, Facebook is attempting to reinvent global finance by building an alternative currency regulated by other private companies. Libra is intended to be the world’s first decentralized currency designed for universal use. It’s as if Facebook was to somehow buy all the Bitcoins in the world, change their name to Libra, and introduce this currency to its 2.4 billion Facebook members. Libra, then, is a privatized financial system operating on blockchain technology. The goal is to combine the world’s largest private community with the world’s most valuable private currency.
“Move fast and break things,” Mark Zuckerberg famously boasted at the beginning of Facebook’s history. And there’s no doubt that his company has indeed both moved very fast and broken many things over the last fifteen years – including arguably our individual privacy and our democracy. So Facebook’s attempt to disrupt the architecture of our financial system should be taken very seriously by those of us concerned by the destructive impact of the digital revolution on society.
No wonder Libra has been greeted by a deep skepticism by public officials both in the United States and Europe. As Maxine Walters, the chair of the US House Committee on Financial Services warned, Facebook – given its “troubled past” - should freeze all its plans for Libra until regulators have approved of the new currency.
After all, what could go wrong if the Dollar or the Euro was to be replaced by the Mark Zuckerberg’s Libra? Who wouldn’t celebrate the replacement of the Federal Reserve Bank or the European Central Bank by a currency backed by Facebook and 27 other private corporations?
In Mark Zuckerberg We Trust. LOL – to borrow the cultural currency of the Internet.
Unfortunately, however, the Libra really isn’t a laughing matter. The problem is that it reveals Facebook’s astonishing hubris. For all its “troubled past”, the company obviously has failed to grow up. It still believes in the infantile notion that what’s good for Facebook is good for the world. And the truth, of course, is quite the opposite. As the Financial Times has already noted, Facebook’s Libra will not help the unbanked. No. It is designed to only help Facebook.
In their Libra White Paper, Facebook bullets six “opportunities” for the disruption of the traditional financial system. Some of these points are written in the exuberant gibberish of marketeers who have liberally drunk Silicon Valley’s libertarian flavored Kool Aid. One opportunity, for example, is that “we believe that people have an inherent right to control the fruit of their legal labor”.
The fruit of their legal labor. WTF?
But amidst the Silicon Valley gibberish, there are some libertarian assumptions about this new currency which are both profoundly dangerous and wrong. “We believe that people will increasingly trust decentralized forms of governance,” the White Paper states, for example, without offering any evidence for such an absurd claim.
It’s as if we are back in 2004, the year Facebook was founded, that halcyon age when many of us believed that the decentered Internet would make the world a fairer place. But over the last fifteen years, public “trust” in the digital revolution has evaporated. Today, the decentralized architecture of the internet is viewed with increasingly skepticism. Especially since it’s become increasingly self-evident that behind this technological decentralization lies the highly centralized power of trillion-dollar multi-nationals like Google and Amazon.
Yes, trust is more valuable than all the cryptocurrency on the Internet. Take Facebook, for example. Over the last year, trust in Facebook has, according to the business analytics firm Mixpanel, “plummeted”. Since April 2018, for example, when the Cambridge Analytica scandal broke, Facebook likes, shares and posts have dropped by 20%.
And it’s this collapse of trust in Facebook that actually explains the company’s Libra initiative. The truth is that Libra – with its consortium of 27 supposedly independent corporate partners – has been designed to rebuild trust in Facebook itself. As the University of Pennsylvania business school professor Kevin Werbach notes, “Libra is the last, best hope to re-establish trust between Facebook and the world.”
But I suspect that Libra - probably like Facebook itself - will fail. The trust between Facebook and the world will be not be re-established. The secret is out: we now know that what’s good for Facebook isn’t good for the world. The age of Zuckerberg, with its fetishization of disruptive innovation, is now passing. You see, the Libra White Paper is wrong. People don’t want decentralized governments, let alone currencies. Instead, they want the order and certainty that goes with centralized authority. For all its cutting-edge technology, Libra is fifteen years too late. No. We aren’t going to fall for that one again.