The American technology journalist and impresario David Kirkpatrick is probably the world’s leading authority on the history of Facebook. The author of the 2010 best-selling Facebook Effect, a generally positive take on the social network’s early history based, in part, on his close access to Mark Zuckerberg, Kirkpatrick has – over the last few years – become one of the Facebook most articulate critics. So I began by asking David Kirkpatrick if he felt personally let down by Facebook’s behavior over the last decade.
This is an important interview. As I suggested in the introduction, David Kirkpatrick is probably the world’s leading authority on the history of Facebook. He is also amongst the most respected tech commentators in the world. Kirkpatrick, then, is anything but a radical critic of Silicon Valley. Anything but a Luddite. And, yet, in this refreshingly frank interview Kirkpatrick pulls no punches about Facebook. And that’s what makes his critique so important.
Yes, he says, he does feel let down – in his words, “deeply disappointed” - by Facebook. Mark Zuckerberg, in particular, he argues, is to blame for Facebook’s failure to admit the enormous range of harms it has done to society. That’s because, Kirkpatrick says, Zuckerberg & his deputy, Sheryl Sandberg, went for economic growth at all costs. The company and its platform was thus built in what he calls a “heedless manner” which didn’t respect its user’s rights.
Facebook is, in many ways, a classic morality tale, David Kirkpatrick says. The company executives – Zuckerberg, Sandberg and their team – got quite literally “drunk” on the company’s 40% margins, which makes it the most profitable company in history. But that profitability is rivalled by its greed and by Zuckerberg’s failure to confront the ethical implications of his company’s success. The culture at Facebook was delusional, Kirkpatrick suggests. Nobody was willing to tell the truth.
Kirkpatrick unambiguously connects the contemporary crisis of democracy with Facebook. Illiberals like Orban in Hungary, he claims, have become masters of manipulating Facebook, stimulating fear and anger to undermine the democracy. Autocracies such as Duerte’s regime in Philippines, he says, have teams of trolls employed to cheat the system. In Myanmar, he suggests, it seems Facebook might have even been used to enable genocide.
So how to fix Facebook? Just as money is the problem, so it could be the answer too. Facebook is ultimately, Kirkpatrick reminds us, a media company with all the accountability of traditional media companies. It should, therefore, bear moral responsibility for what exists on its platform. And so the most effective way to combat Duerte’s trolls is to hire editors to catch the cheats hired by the autocrats. Regulation matters too, he tells us. But Fixing Facebook, he believes, is ultimately an economic rather than political challenge.
Facebook’s big data business model might be fatally flawed, Kirkpatrick hints. But it’s here that he senses a glimmer of opportunity with Libra - the company’s new cryptocurrency initiative announced with great fanfare last week. Libra, Kirkpatrick hopes, could offer Facebook the opportunity to invent a new business model in which it would share its wealth with its users by giving them control over their own data.
I’m not sure, however. Like David Kirkpatrick, I read the Libra White Paper published last week. What worries me, however, is that Facebook seems as delusional as ever. “Libra’s mission is to enable a simple global currency and financial infrastructure that empowers billions of people,” Zuckerberg and his team modestly introduced its plans for this new cryptocurrency. Once again, Facebook is presenting itself as an altruistic company that will make the world a better place. And, once again, the company is lying.
No. We aren’t going to fall for that one again. Are we?
Hope you enjoyed this week’s episode with David Kirkpatrick, you can find out more about him here:
Find his book here:
Facebook Effect - The Inside Story of the Company That Is Connecting the World
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Produced by Jason Sanderson - Podcast Tech
[00:01:57] So David Kirkpatrick perhaps the world's leading authority on Facebook. You wrote the Bible or the original Bible on Facebook. The Facebook Effect in 2010. But since then David you've dramatically changed your mind on Facebook and indeed on the book. How does it feel. Do you feel personally let down by Facebook. Given that I think it would be fair to say that you are pretty enthusiastic in your 2010 book The Facebook Effect about the potential of Facebook of remaking the world and particularly democracy and today you're much more critical and pessimistic.
[00:02:36] Well I feel very disappointed that they failed to anticipate the harms that their service could cause alongside the virtues that it brought to the world. And so yes in that sense I feel let down. But let's face it with Facebook it's not by a company it's by a person. I mean this is a company that is a unilateral dictatorship. And Mark Zuckerberg is the decision maker and he chose not to focus or to prioritize the issues of potential harm and instead go for growth at all costs. And that is really the single biggest reason why we find ourself at this time with so many things going wrong.
[00:03:14] That's an interesting response David. Sheryl Sandberg doesn't matter. Everything Facebook is all about Zuckerberg.
[00:03:20] Well Sheryl Sandberg doesn't control the company. She works for him. She does matter. I think she's she's made errors too. I think you know the thing that I find ironic about Sheryl and I respect them both in many ways. And you know I I try not to make ad hominem attacks on either one of them although the problems that their service has caused the world are so severe in so many instances that it's hard not to be deeply disappointed in them as people.
[00:03:45] That's a pretty radical thing to say disappointed in them as people. Explain that.
[00:03:50] Well let me just explain what I was going to say about Sheryl. I mean Marc hired her. He told me when I was reporting my book which happened to be right around the time he had hired her that he brought her in partly because of her government experience. And this is a more or less an exact quote and the quote is in the book because she had government experience and running Facebook was going to be increasingly like running a government which was a profound insight that was accurate. But ironically that is not what she did. Instead of bringing her government experience to bear and trying to implement governance like reforms and structures inside the system she built one of the best businesses that has ever been built in a generally heedless manner. They could have built a good ad business with a lot more controls and protective features and probably not been as profitable as they are but it would have worked and I believe and they wouldn't have grown as quickly. But they chose to grow at all costs. The irony is that you know he said she had government experience Facebook was going to be like a government. So he needed her. But she has not functioned as a government kind of figure inside the company she's functioned as a cheerleader for a purely exploitive capitalist business model.
[00:05:12] So is Facebook the epitome of what Shoshanna Shoshana Zubkov code surveillance capitalism is that the best summary of the model and is that essentially what's gone wrong with the company.
[00:05:23] I think if Facebook is not the only example of surveillance capitalism I mean surveillance capitalism is a macro phenomenon that we're in the midst of. That goes well beyond Facebook and extends to the camera based society of course YouTube Google all these messaging services particularly in China. Chat and there's plenty of other ways that surveillance capital is more or non capitalism is harming the world and impairing our freedom of action rather than thinking of surveillance capitalism though I am more along the lines of Christine Harris's analysis in which she talks about the predatory database advertising model which is attention based and depends on essentially disrupting the user's life in order to profit for the vendor.
[00:06:14] The advertising platform however I don't like Kristen I don't. Who is a friend of mine. I don't have a simple answer or I don't have a simple answer Roger McNamee tends to have a somewhat simpler answer which is that he says they shouldn't be allowed to use that business model which strikes me as impractical because I just don't see how you get from here to there. It's the surveillance part that is certainly is a big part of it but it's not just that they're surveilling us it's that they're surveilling us for their own profit and therefore they have no incentives to stop surveilling us.
[00:06:46] ZUBER actually was on the show and she suggests that it was Samberg who imported the surveillance capitalist business model from Google to Facebook I think McNamee also.
[00:06:56] With that I wouldn't disagree with that. So why is Zuckerberg so important then if if Sandberg is the pioneer of this corrosive business.
[00:07:06] Look I blame Sheryl Sandberg a lot for bringing that business model in and not stopping to think about some of the consequences. I do think both of them have gotten drunk on the money and I think we definitely should get around to the money and the profit aspects of this in a bit. But it is technically accurate that before Sheryl arrived there was in effect no business model and I write in my book two chapters about what happened after she arrived and how they sat around and she would write on a whiteboard. What business are we in. They didn't even know what business they were in. They didn't know how they were going to make money that had not been Mark's priority. And Sheryl figured it out and she figured it out in a way that was enormously profitable and she executed it with some strategic brilliance. If you forgive her the oversight that I'm not forgiving her for which is doing it without considering the consequences on society. Yes she brought a targeted ad based business model with her from Google and that's what they used.
[00:08:01] So David in your memorable book The Facebook Effect you describe a political uprising in Colombia. I think it was written what a year or two before the Arab Spring. A year before. But your presentation of Facebook was as a kind of engine of democracy. Did you have a moment over the last eight years where you recognize that Facebook wasn't this engine of democracy. Did it suddenly dawn on you.
[00:08:27] Well I think when I was interviewing Mark Zuckerberg on stage at Techonomy two days after the election and he said it's a crazy idea that fake news on Facebook affected the election of Donald Trump. That was a regulatory moment for me and to processing it in subsequent weeks and the world's reaction to it was a pretty big force on my thinking. Although I had already been quite concerned and had written things prior to that about how worried I was about the sheer power these companies were gaining Visa V governments. But you know I wouldn't entirely agree with your formulation because the way I talked about it in my book was not exactly as a force for democracy but a force for the empowerment of the individual. That is a distinction it can translate into being a force for democracy and it often has. And you know contrary to your way of looking at it I think it still does in many ways. The problem is it is also a force for anti democracy. It depends on what the empowered individuals are trying to accomplish. If the empowered individuals are trying to work for you know the election of Barack Obama or the promotion of the me too movement or any other thing that we might consider socially admirable or or progressive or whatever it does work in those contexts and it's used in those contexts in innumerable instances every day. So it still has that quality but it also has the quality when a dishonest user when people who have evil and malicious intent want to abuse the system. It unfortunately it lends itself very readily to that abuse which is why you know I know you're interested in the future of democracy why we get or bond due to our table scenario et cetera et cetera. I think that's one of the main reasons those figures have become such major forces on the world stage because they are all masters of abusing social media and in particular Facebook because the rules don't prevent them from doing so.
[00:10:21] So you're suggesting that the both scenarios and the Irish organs and the drafters of the world they all bands that cheat that they're abusing Facebook they're not using it.
[00:10:32] Melanie every one of those is a cheat and an abuser of Facebook. Absolutely unequivocally provably that is well-known. There's plenty of evidence in each of those cases and it's true in Poland for the you know anti-democratic forces that are on the rise there and in the government there. It's true in many other countries in Eastern Europe in the Orbán orbit because he has a lot of vassal states that are rising around him. It's true in many countries of the world including Vietnam and elsewhere where the governments know and look at the best example. Ultimately most widely discussed one is Myanmar where the hunter the military junta used it to perpetrate genocide and they did it with fake news and incendiary speech that was intended to rouse people towards violence. You can't really rouse people towards violence by honestly using the system in most cases you probably can in some instances.
[00:11:26] But you know in Myanmar in Sri Lanka in Philippines just to take Southeast Asia it's very easy to concoct sensational messages that are inaccurate or dishonest that aim to inspire people to hate someone that is politically advantageous for the person doing the manipulating. One good example of how this kind of thing works is the way that to terror today continues to target. Maria Ressa the famous and brave journalist in the Philippines and he has an entire team of hundreds and hundreds probably thousands of people who basically only use social media to stir up trouble day in and day out. And this is true in India to the party in power in India has used these means they have employed thousands of people who create whatever incendiary message they can to achieve their political goals which is often to rouse people to fear and anger in order to support their political interests. Fear and anger when it's invoked leads people to support autocrats. That's like the simple formula and it works. And you can generate fear and anger with fake messages in Facebook.
[00:12:42] David was this model pioneered by Putin in Russia was the first politician who got it.
[00:12:48] Putin Putin has been using this kind of system to manipulate the Russian population for decades. He wasn't doing it first in Facebook. I don't think he was the first one I think when he succeeded in doing it in order to help Donald Trump get elected. It led to a series of revelations for other political leaders around the world of what was possible. So in that sense he was the teacher. I think to Turkey for example is one who kind of figured it out on his own. Unfortunately all of the controversy that surrounded Cambridge analytic and the Russian manipulation inside Facebook during the campaign on 2016. The coverage that got globally was revelatory to politicians in many many countries and it taught them things. It didn't teach them that you shouldn't do it it taught them that you could and therefore from their standpoint you should do so.
[00:13:39] David how do we fix this. Is it fixable if Mark Zuckerberg was to take a call or Sheryl was to take a call from you.
[00:13:46] What would you tell them to do. It is fixable but it's not fixable while maintaining a company with 40 percent plus net margins which is what Facebook has. I would like to state something that I routinely say in public because very few people digest the significance of it. Facebook on a per dollar of revenue basis is the most profitable large company that has ever existed round. That is not an overstatement. Facebook has after tax profit margins in the vicinity of 40 percent and even maybe now they're in the high 30s. I don't know what they are but you know Google's net margins are in the 25 percent and below range before Facebook started doing any remediation say before two years ago Facebook was routinely having net after tax margins of forty three to forty five percent. That means for every dollar of revenue after they paid for everything they took to run the system all the salaries all the taxes they kept forty five cents. That is unbelievable profitability. So you can't maintain that and fix the system. The well-run system would not be so profitable by the way. Before we go to the back to the remediation my fundamental criticism of Zuckerberg and Sandberg is they prioritize making that much money. The biggest lie that they promulgate is that they don't try to make so much money. I mean it was if you listen to this interview that was done at the code conference of the two Facebook executives by Casey Newton they are reiterating it. Both of them were not rapacious capitalists we don't think about making money. It's such disingenuous rhetoric to say we aren't the people trying to make tons of money we're just doing this when they are the most profitable company of their scale that ever existed. It's insulting to every other business to say they're not trying hard to make money. I mean because they're doing it better than anybody else. And they also keep saying well it just sort of happened we didn't do it. We were too slow to see all these harms coming. The reason they were too slow was that they were drunk on the wealth they were generating drunk on the stock appreciation. They were every single one of them individually benefiting from so do they know they're lying. Are they consciously lying or are they deluding themselves they're deluding themselves they are deluded themselves they think institutionally and individually we don't appreciate all the good things that Facebook brings to the world and the world is unfair in our criticism of them because we are only focusing on the negative the positive overwhelmingly outweighs the negative. But we don't see that because the negative is more sensational. That's what they think. They say yes we were slow and yes we need to do more and yes we made a lot of mistakes. In fact even in that interview I'm referring to its code conference. I think Bosworth says they were Pollyanna ish until last year which is a gentle way of saying the truth. They were worse than Pollyanna ish. They were willfully ignorant of the potential negatives because they were so eager to keep growing and making money. You know there's an element of Only the Paranoid Survive where they felt if they didn't grow fast somebody else would eat their lunch. I understand that. But they should have been willing to tolerate that risk. Order not to create all this enormous range of harms that they've engendered so has the time come.
[00:17:01] David for the regulators to step in it sounds to me in terms of at least your presentation that these people are congenital liars.
[00:17:09] I didn't say they were congenital liars. I said they are self delusional. Well you said they were lying and they say they're congenital liars would be to presume that they're willfully lying. I do think willful lies do emerge periodically but I don't think of them as congenital liars. I think their delusions can be traced back to their wealth. I mean if you look at soccer Byrd personally the richest 35 year old in human history by far it's pretty easy to think if I'm this rich I must be smarter than everybody else and they just don't get it and I'm entitled to keep doing what I'm doing. And anyway I'm going to give it away and cure all diseases so I deserve the money. I think that kind of wealth is distorted intrinsically it makes it very hard for people to step back and make a rational assessment of the impact of their behavior.
[00:17:54] I'm not saying necessarily I know how to regulate it but I will guarantee you regulation is coming. That is very apparent all across the world. The governments are stepping up. They are not going to sit back anymore. I mean if you look for example at the Democratic presidential candidates every single one of them has a position on the regulation of social media and the majority of them say yes. When asked the question should these services be broken up. So that is a major sea change that's really only happened in the last six to nine months.
[00:18:26] As you say they the most profitable company in history. Couldn't they just employ armies of curators to make sure that the parties and the both scenarios and Putins of the world don't cheat the system.
[00:18:38] Yeah I think in some sense that's what they have to do and they are starting to do that. You know they brag about the 30000 curators they have now and Casey Newton again at The Verge has done these extraordinary articles about the suffering those people encounter just trying to look at all these suicides and sexual depravity and child pornography all this awful stuff that they have to look in that day in and day out and there aren't nearly enough for them. But unfortunately even if they were to employ hundreds of thousands which maybe they should it would still not be completely sufficient. I do believe in effect they are a media company and in effect they bear responsibility for the content that runs on their services and they've acknowledged this in some ways and they continue to deny the idea that they should be considered a media company.
[00:19:28] And if you accept that it does imply enormous additional expense in order to monitor the content and to take a lot more stuff down to be much more vigilant you know they can't employ software so it's not just a person bodies issue but it will be enormously costly and it should be because the world demands it the world's safety and future of social harmony. In some ways depends on it. This is the town square of the planet. You know they are controlling speech for a large portion of the planet and whatever it costs they should spend the money to do that responsibly not only in the town square of the planet but this week they announced they wanted to be the bank of the planet.
[00:20:09] What do you make of this.
[00:20:11] Libra initiative that crypto currency initiative bringing in 27 partners and announcing that they were going to empower the poorest people of the world with a Facebook branded crypto currency as their initiatives go much less critical of this one than most of their others.
[00:20:30] I think it's true the world needs more affordable way for money to flow across borders especially in a world where the number would just came out this week that 700 million people are displaced. I mean we are moving toward a world of migration that you know is unprecedented and a tremendous suffering results. And you have all these people who are migrant workers trying to send money back to their families at home and they pay these enormous fees to do that. That is something that they could help with the system. So I'm actually kind of agnostic about Libra as a currency as a financial innovation. I'm not a financial expert. I think it's a legitimate thing to experiment with. I generally accept that they have turned over governance of this to this Libra association and I don't think that it will be under the entire control of Facebook. They do have the ability to profit from it with their own implementation of the currency. If it were to take off and be successful there's many uncertainties about it. So it's by no means a slam dunk. What I think is interesting about it and I wrote a piece on Techonomy and I also published it on LinkedIn about this which hasn't really been commented by others that the whole set of innovations that surround this LIBOR currency could be applied inside Facebook itself to help address the advertising problem depending on how hard governments start to push back against the targeted. Pension based advertising business model there is a potential for a different business model that one could envision which Libra could potentially point towards implementation and I could explain that if you want. It's a very subtle but important point and I think they're possibly thinking about this in the background although they're not talking about it.
[00:22:16] The piece is actually extremely interesting. You say that Libra could help Facebook I'm quoting you a remake itself. What would that mean that entirely drop the advertising model on and replace it with a currency based business model.
[00:22:31] Nothing's ever entire. I think it could be partial it could be incremental but it's possible that Facebook could really find social pressure growing against this targeted advertising model that they have which depends on the exploitation of our personal data. And again if they were to do what I'm proposing is possible here they would probably not be nearly as profitable as they are today. So it would be a wrenching transition. Wall Street would punish them.
[00:22:56] Who knows they might have to be taken private in the process. All kinds of weird things might have to happen. But there is a way you could do a business model differently and it would be where you essentially give the data the control of our personal data back to all of us individually and in effect pay us for seeing commercial messages.
[00:23:17] This is a model that many people have found appealing for a number of years. The architecture to implement it has never properly existed but it is widely believed that a block chain based model could give people the ability to control their personal data in a sort of encapsulated form. If you look at Facebook description of the Libra association in their white paper there is a paragraph in which they say that they are hoping to develop a digital identity as part of this system which they say is urgently needed now a digital identity is ironically what up to now.
[00:23:52] Facebook provided better than anybody else but unfortunately it was a digital identity for us that was controlled by Facebook. The kind of digital identity I'm talking about is a digital identity for US controlled by us. Know if you poke around in the block chain community there's a lot of people talking about this kind of thing. You know it's been sort of seen as pie in the sky. If Libra took off and did become a global system that kind of idea would no longer be so pie in the sky the elements would be in place for Facebook to potentially start experimenting with an even potentially eventually implement this kind of the system. And the other element that the Libra system would enable is micro payments so that in other words if Coca-Cola wants to show Andrew Keen and or David Kirkpatrick an ad to some extent maybe they would pay us some fraction of a Libra in order to look at that ad instead of paying all that money to Facebook as they do today. It's a way of sharing the wealth with the users with the citizens of the system.
[00:24:51] I read the white paper too and I'm quoting the introduction of the mission statement. It said Libra mission is to enable a simple global currency and financial infrastructure that empowers billions of people. Aren't we falling back into the old trap of Facebook equating its own interests with the interests of humanity. Can we really trust them again given they screwed up so many times in the past.
[00:25:16] In general I don't trust them. That's a fact. But as I hear this particular project described and as I see them saying they are going to hand over governance of it to an entirely outside entity that they will not have disproportionate influence over. If that were the way it actually develops that could be a trustable architecture. But in general do I trust Facebook to do what's right for the citizens of the world. No I do not. They have proven themselves untrustworthy. So in that sense I agree with you.
[00:25:51] This is the crisis isn't it. Facebook is for them to reinvent themselves or perhaps even survive in the long term. They need to rebuild trust but that's their core problem is that we've given up trusting them because they've let us down so many times in the past. So how did they find their way out of that.
[00:26:08] Well it's hard to know but I would reiterate that this this idea of a sovereign digital identity that was controlled by the individual and a micro payments architecture which would lead payments to go to the individual when their attention is interrupted by an ad or whatever other activity was imposed upon them. That could be a way to build a more trusted architecture. You know it's another one of those challenging problems where how do you go from here to there. But I think the interesting thing to me alongside the pure currency aspects of Libra which I think potentially are legitimate in themselves is that it could create the context for that to begin to develop at scale in a way that would benefit Facebook and they would only do it if they had to. They don't do anything unless they have to. If all this controversy after the election of Donald Trump. Hadn't occurred they wouldn't be doing anything different. They're only doing everything in all this response to the world's concerns because the world is concerned. It's proven that they didn't do the governance when they weren't being scrutinized. It's only scrutiny by the public and governments that gets them to do anything positive. That's an exaggeration. I do think there are positive elements to their system and I'm not going to eliminate that from my own rhetoric. I believe there are things about Facebook that still are very valuable for citizens of the world and the United States in general. The reforms that they're introducing now are entirely reactive. So you don't trust them to do the right thing because they have proven that they will allow harms to develop when left alone.
[00:27:42] OK. David final question impossible question. Of course you've been very very honest here and now I want you to speculate. It's nine years since you wrote The Facebook Effect of course when you wrote it in 2010 or when it came out in 2010. I can't imagine you would have even conceived of the situation today in 2019 but let's fast forward another nine years to 2028 what will Facebook look like.
[00:28:08] Van I know it's impossible to say but speculating I would guess that there will be other systems that compete in some fundamental way with Facebook by a decade from now or nine years from now. I think it's impossible to really say what those systems would look like because I think we're going to see all kinds of architectural changes in the digital landscape with the much more computation everywhere through the Internet of Things and 5G and the following that 60 I think augmented reality could be affecting our experience of digital architectures much more by then. Unfortunately I think governments will be far more involved then than they are now and most likely the global digital landscape will be far more fragmented. And I'm not advocating that but I'm sad to say I think it's likely. So the idea of a single global system which Facebook is today might be effectively impossible in a decade. So they may be weakened simply by that alone.
[00:29:05] And democracy. But in 2028 is it going to be stronger or weaker than it is today.
[00:29:10] You know I'm a hopeful optimist. The trends right now for democracy are very worrisome. As you know I will not predict that we will have less democracy in 10 years. I simply won't because I'm gonna work to make sure that doesn't happen. But it's possible.