What I Wish Mark Zuckerberg Would Say

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

It’s day two of the Mark Zuckerberg grilling on Capitol Hill. That means it’s another opportunity for grandstanding bureaucrats to attack a businessman for his achievement.

You see, the men and women of Congress all have created multi-billion-dollar businesses that have changed the world, so of course they know better than the Facebook (FB) creator and CEO about how he should run his operation. On Tuesday, Mr. Zuckerberg began his testimony to members of several Senate committees with a statement that I thought was both contrite and accountable for what he admitted was the unintended outcome via the Cambridge Analytica data breach.

I found the Facebook chief’s words to be solid and, of course, understandably apologetic given the vitriol he faces from both sides of the political aisle, as well as from much of the public, over the recent data scandal. That vitriol has caused Facebook shares to fall nearly 15% from their 52-week high set on Feb. 1, an example of what I call the free market policing its own.

Yet that’s not enough for lawmakers. In fact, this whole data breach incident has come with calls for all sorts of government regulation on Facebook (I prefer to call it interference) designed to dictate how the company operates, how it interacts with its users and what it can do with the data it obtains.

Unfortunately, Mr. Zuckerberg seems to have in principle agreed with the need for greater regulation on his company. This is an example that the novelist/philosopher Ayn Rand, one of the most powerful exponents of laissez-faire capitalism ever, called “the sanction of the victims.”

Rand had keenly observed that profit-seeking businessmen, despite conferring huge benefits on society of the sort Mr. Zuckerberg is responsible for, are often the “most hated, blamed, denounced men” in the eyes of much of society, and most particularly the political class. She also noted that these businessmen are complicit in this injustice, as many times they accept their attackers’ moral standards and end up guiltily apologizing for their own productive virtues.

That is what Mark Zuckerberg has done, for the most part, although he stopped short of truly capitulating to his harshest critics. He also largely defended his company and the tremendous good it has created for the world.

Yet I wish Zuckerberg would have gone a lot further in the defense of his brainchild. So, if you’ll indulge me, this is what I would have liked Mr. Zuckerberg to say at the outset of Tuesday’s hearing.

Chairman Walden, Ranking Member Pallone and Members of the Committee,

We face a number of important issues around privacy, safety and democracy, and I know you have your opinions on what the government’s role should be in how Facebook deals with these issues.

And while I am aware of your desire to wield influence on a business that has changed the way the world interacts, I am here to say that you have neither the right, nor the knowledge, nor the permission to interfere with the way Facebook operates.

Facebook is an idealistic and optimistic company. For most of our existence, we focused on all the good that connecting people can bring. As Facebook has grown, people everywhere have gotten a powerful new tool to stay connected to the people they love, make their voices heard and build communities and businesses.

This tool is used voluntarily by those who agree to the terms and conditions of its use before they sign up and create an account. This voluntary agreement allows us to monetize the data that users freely choose to put out to the world on the Facebook platform.

Nobody is forced to use Facebook. Yet if you want the benefits of Facebook, which billions of users around the world have demonstrated they do, then you have voluntarily chosen to allow my company to monetize that data.

Facebook is a for-profit operation. I do not apologize for this; rather, I celebrate it.  

Our company has brought into existence tremendous wealth for shareholders, for advertisers and for businesses that use Facebook as a storefront of sorts. That wealth has allowed us to expand our mission and to continue evolving to create even greater value.

Have there been bad actors who have used my creation for nefarious purposes, such as spreading fake news, interfering in foreign elections and promulgating hate speech? Yes, there have. And it is my company’s responsibility to correct this situation, as it has been harmful to our business, our shareholders and to our users at large.

What would be more harmful, however, is for me to accept the premise that my creation is somehow a “public utility” or a “monopoly” that requires the arrogant and uninformed interference of federal lawmakers.

I admit that Facebook didn’t take a broad enough view of our responsibility in this matter, and that was a big mistake. It was my mistake, and I’m sorry for it. I started Facebook, I run it and I’m responsible for what happens here.

It will take some time to work through all the changes we need to make, but I’m committed to getting it right.

I’m also committed to protecting what I and my community of users and advertisers have created from the undue interference of big government.

I thank you for the opportunity to state my case, and with that, I am going to excuse myself from this hearing.

I have a business to run, and shareholders to answer to.

Businessmen vs. Bureaucrats

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“A businessman’s success depends on his intelligence, his knowledge, his productive ability, his economic judgment — and on the voluntary agreement of all those he deals with: his customers, his suppliers, his employees, his creditors or investors. A bureaucrat’s success depends on his political pull. A businessman cannot force you to buy his product; if he makes a mistake, he suffers the consequences; if he fails, he takes the loss. A bureaucrat forces you to obey his decisions, whether you agree with him or not — and the more advanced the stage of a country’s statism, the wider and more discretionary the powers wielded by a bureaucrat. If he makes a mistake, you suffer the consequences; if he fails, he passes the loss on to you, in the form of heavier taxes.”

— Ayn Rand

There was no better advocate for businessmen, and no finer critic of bureaucrats, than the great novelist and philosopher. Here, the author of “The Fountainhead” and “Atlas Shrugged,” two must-read works of literature, summarizes the differences between these two societal camps. And after today’s article, I suspect you know which camp I prefer.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.

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