Facebook CEO Mark Zuckerberg is calling for
stricter regulation of the web.
“Facebook wants new regulations!”
Mark Zuckerberg wrote an op-ed that said
"Lawmakers often tell me we have too much
power over speech, and frankly I agree.
We shouldn’t make so many
important decisions on our own."
Wow.
It sounds so... self-sacrificing.
But give me a break.
Big companies tend to like regulation, because
it gives them an advantage over smaller competitors.
After all, start-ups can’t afford the squads of lawyers
and “compliance officers” that Facebook employs.
In France, they embedded officials inside the company.
My position is not that there should be no regulation
Zuckerberg issued his call for regulation after spending
hours being grilled by members of Congress.
I think the internet is increasing...
You embrace regulation?
I think the real question as the internet
becomes more important in people’s lives
is what is the right regulation
not whether there should be or not.
But you as a company welcome regulation?
I think if it’s the right regulation then yes.
Zuckerberg’s no dope.
He sees which way the wind is blowing.
So would you work with us in terms of what regulations
you think are necessary in your industry?
Absolutely.
So Facebook will work with politicians
to shape regulation.
What’s sad is that if anyone should
fight for permissionless innovation,
it should be people like Mark Zuckerberg.
It’s no accident that the amazing wealth creation
that brought us Facebook, Google, Instagram, Apple,
Microsoft, Amazon, smartphones, computers
all happened in the two big
metropolitan areas farthest from Washington DC.
Microsoft in the early 1990s was
the largest company in the world.
Incredibly successful and they spent exactly
zero dollars on lobbying, on cronyism, on lawyers.
They had no presence in Washington DC.
Not a single lawyer.
Instead of spending money on lawyers and lobbyists,
they spent it on technology.
But once politicians noticed their success.
They were literally brought in front of Congress
They were yelled at by a Republican,
Oren Hatch from Utah, he said,
"You guys need to get involved here in Washington DC.
You need to build a building here.
You need to hire lawyers here."
In other words, the unspoken text,
"You need to bribe me,"
and Microsoft walked out of the meeting and said,
"You know what? You leave us alone.
We will leave you alone. We're busy.
We're running the biggest company in the world.
There's a lot to do."
The Justice Department has charged Microsoft
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
the American public,
you're offering your customers a product for free.
This is Internet Explorer at a time when
we were buying Netscape and paying money for it
they offered it for free
and that was deemed bad business practices.
A monopoly.
A monopoly, trying to dominate the market.
For 10 years they had to fight that lawsuit.
They lost, they got regulated, they got controlled.
Guess how much Microsoft spends today
in Washington DC?
How much?
10s of millions of dollars.
They have a beautiful building about equal distance
from the White House and from Congress.
They have lawyers, they have lobbyists,
they spend a lot of money and indeed a lot of the
other tech companies like Google learnt the lesson
The lesson is if you don’t want politicians
destroying your business, practice self-defense:
Go to Washington to give them money
and kiss their rings.
Making sure to keep politicians at bay,
so a lot of the lobbying,
a lot of the so-called cronyism is self-defense.
Yes, and Zuckerberg’s acting in self-defense.
But it’s still ugly.
And Silicon Valley’s crony capitalism is
a threat to future innovation.
But in fairness to Zuckerberg, he didn’t start it.
Let's remember where cronyism comes from.
Cronyism occurs when government starts interfering
in business and then business has to defend itself
and as soon as it hires the lawyers
and the lobbyist to defend itself,
it quickly slips in to now gaining favors
from the government who has all this power.
​If we really want to end cronyism,
what we need to do is reduce the power of politicians
over our lives.
Actually separate economics from state.