Why Blaming Facebook for your Hatred of Capitalism is Flawed
By: Jack Macdonald
Tags: Business, Consumerism, Technology, Capitalism, Economics

Photo by Glen Carrie on Unsplash

Why Blaming Facebook for your Hatred of Capitalism is Flawed

There are a lot of things about Facebook that I don’t like. So much so that I rarely use it. I created an account in 2009 and it’s more or less sat unused for better part of a decade. My point: This is not an attempt to defend Facebook. However some arguments being put forth for it being broken up are flawed, if not wrong.

Now, let me just say that I am a fan of Umair Haque and his Eudaimonia & Co. I will admit that he’s one of the reasons I got drawn into and ultimately paid for a Medium subscription. I am lured, like click bait, by his sensationalist titles, and his simplistic argumentative style of writing is easy to follow and convincingly effective. So that is why I am somewhat disappointed and compelled to contradict his points and positions on his recent argument for Facebook to be demolished.

First let’s start with the argument that Facebook should be demolished because it owns three of the four largest social media companies(see footnote). Was there any consideration given to the fact that when Facebook acquired Instagram and WhatsApp that those fledgling companies were not at the top of the list? That they are so pervasive and successful is perhaps because of their acquisition by Facebook. It is no secret that for the majority of startups, the goal is to be bought out by a large tech company — that’s how startup founders get rich — and then usually go on to found another startup and so-on. To now blame Facebook for (a) doing exactly what much of the industry hopes it to do — acquire startups, and (b) making those acquired companies even more successful is disingenuous and hypocritical. If it was a case of anti-trust, then look no further to assign blame than the Office of Fair Trading in Britain and the FCC in America for each approving the deal after independent investigations.

Umair further asserts that Walmart is off the hook for their predatory tactics and vertical integration because it results in a “lower price” for consumers, whereas Facebook being “free”, means it needs to be judged on other “hidden costs”. I won’t get into the semantics on how “price” and “costs” are different, because from a consumer perspective they are more or less the same. But he makes the case that because Walmart charges some hard currency for its goods and Facebook is free of any consumer currency transaction, then Facebook must undergo additional scrutiny for its impact on other aspects of society. That is a ridiculous argument, and one that could be remedied by Facebook charging a subscription of say, 1 dollar or even 1 cent. To suggest that Walmart has no social responsibility because it charges low prices for its products, is to suggest that it is ok to flood the domestic marketplace with cheap, lead-painted plastic goods from overseas sweatshops — so long as it is a bargain…but not free! Meanwhile Facebook is charged with being the cause of people being unhappy, angry, lonely and dumbed-down. That might be a truism, easily proven if only Donald Trump actually used Facebook and not Twitter, but that’s for another discussion. The point is that the arguments used by Umair to judge Facebook, while they may have merit, have nothing to do with the fact that it’s free in comparison to Walmart or others who charge a price for their product offerings.

I understand Umair’s angle. If you have read enough of his opinions, everything capitalistic is ultimately bad. It either corrupts and exploits us economically like Walmart or it corrupts and exploits us socially like Facebook. If his conclusion had amounted to a recommendation that Facebook be dismantled into its constituent offerings — releasing Instagram, WhatsApp, and Messenger to fight their own competitive battles in a diverse marketplace, then his opinion would have merit — whether you or I agree with him or not. That position would be akin to the breakup of Standard Oil in another era, and similar arguments which have equally been aimed at industries such as steel, copper, railways, and sugar (the latter of which might explain another problem recently featured in DDI, link below).

Rather, Umair concludes by suggesting Facebook be “demolished”, meaning gone — so badly beaten by government legislators that it is expunged from the marketplace. Like most of Umair’s conclusions, it boils down to: Big capital companies — bad. Blowing them up — good. His aversion to the accumulation of wealth in a free market is obvious, but he never quite offers an alternative view of the world.

Churchill famously quoted another lesser-known source that “democracy is the worst form of government, except for all those others that have been tried.” So too is capitalism in terms of economic systems. So, rather than continually casting aspersions, why not offer a credible alternative.

I am no fan of Facebook, but millions of others are, and whether they are smart or not, happy or not, or angry or not has probably very little to do with Facebook, and more likely to do with their recent Black Friday shopping experience at Walmart.

Footnote Fact checking: Facebook does own three of the top four, and in fact four of the top six social media platforms. But Facebook is number one, so “owning” itself is a little misleading as a point of argument. Number four is Facebook messenger, now a subsidiary but developed by Facebook, so not an acquisition. Hence why the article only lists Instagram (actually #6) and WhatsApp (#3) as having been acquired.