Home > Uncategorized > Facebook: The sorry company

Facebook: The sorry company

from Dean Baker

Earlier this month, Facebook CEO Mark Zuckerberg apologized to Congress for allowing improper access to the data of tens of millions of Facebook users. This was just one of a long sequence of apologies that Zuckerberg has made for this and other failures of the social media giant.

Given this track record, it’s probably will not the last apology that Zuckerberg has to make for his company. It is long past time for Congress to take action so that Zuckerberg does not have to keep asking for our forgiveness. There are several simple steps the government can take to help him and his company in this area.

The first is to try to give Zuckerberg some competition. Facebook has an effective monopoly on the sort of social media platform it provides with no competitor having a reach that is even within an order of magnitude of Facebook’s. In fact, when Zuckerberg was asked during his testimony who his competitors were he stumbled blindly and eventually suggested email.

The government can certainly force the company to end its practice of buying up potential competitors. In the last decade Facebook bought up both Instagram and Whatsapp, with the explicit purpose of eliminating potential competition. This is pretty much a textbook violation of anti-trust law in the United States, but the Obama administration chose to look the other way.

In addition to preventing Facebook from buying up potential competitors, the government can also prevent the company from using its near monopoly as a way to ply its way into new markets. This was the initial remedy proposed by the judge when Microsoft lost an antitrust case in the 1990s. 

The judge ruled that Microsoft would be able to keep its near monopoly in the computer operating system market, but it would have to break off from its other divisions and would be prohibited from entering new markets. A new judge later reversed this ruling, but it would be a great precedent to apply to Facebook.

The second issue with Facebook is its tendency to pass on news items from phony sources. This turned out to be a big issue in the 2016 presidential campaign. Millions of people received fake news stories that were passed on from phony sources.

The best remedy for this problem would be to follow a practice now used for the enforcement of copyright law. The Digital Millennial Copyright Act (DMCA) requires websites to promptly remove material from their site after they have been notified of the alleged infringing material by the copyright holder. If they fail to do so, the website owner can face thousands of dollars of punitive damages for each act of infringement.

The comparable requirement for Facebook would be that it would have to promptly notify recipients of fake news after it has been called to their attention. If there were punitive penalties for failing to issue corrections that were comparable to those in the DMCA, it would give the company a strong incentive to limit the spread of fake news.

Finally, there is the problem that Mr. Zuckerberg was testifying to Congress over, the misuse of personal information that is collected through the system. The best remedy here is one that was suggested by the reporter and columnist David Dayan: simply ban individualized advertising.

As it stands, Facebook’s great value is that it can narrowly target advertising based on its extensive knowledge of the interests and habits of its users. It knows what music you like, where you travel, what movies you see. It knows how much you use Facebook and at what times. It also likely knows what you are doing during your downtime from Facebook.

The best way to discourage Facebook and other companies from learning every detail about our lives is to take the money out of it. If they are prohibited from doing individualized marketing, they have no incentive to collect the data.

While Facebook will undoubtedly whine about its free speech rights being violated, it doesn’t have much of a case. The courts have long accepted that commercial speech can be regulated; for example, we ban cigarette and alcohol ads from television. A ban on individualized advertising would be in the same vein.

This sort of ban would fundamentally change the Facebook model, but that is not the public’s concern. Presumably, Zuckerberg and his team will be able to adapt to the new rules, but if not, that’s capitalism.

An advantage of this sort of ban would be to increase the value of traditional advertising. Companies would again value placing ads in newspapers, magazines, or websites that they knew influenced a particular segment of the market. That might not be as cost effective for them as Facebook’s individualized targeting, but if such targeting is prohibited, going the old-fashioned route will be the best they can do.

These three measures together will undoubtedly make Facebook a much smaller company. But it will also be a much better company. If such measures get implemented quickly, we might even have seen our last Mark Zuckerberg apology.

See article on original site

  1. Prof James Beckman, Germany
    May 6, 2018 at 11:16 am

    Personally I don’t feel endangered by advertising, but I agree fake news must be controlled by Social Media & that competition should be encouraged.

  2. patrick newman
    May 12, 2018 at 4:38 pm

    The road to hell is paved with well-intentioned Facebook postings!

    • Prof James Beckman, Germany
      May 12, 2018 at 4:52 pm

      Hi, Patrick, I really can’t fathom all the concern, as it is the insurance, banking, credit card, department store, credit review firms, etc. which sell all the valuable stuff about our court records, property holding, employment history & medical “abnormalities” (of which we all have some). Just check on your credit standing, for example–it will probably be inaccurate but will potentially help or hurt you more than any FB revelations–mostly by ourselves, it seems to me. Am I wrong?

  3. May 18, 2018 at 10:45 am

    Collecting and even sharing personal (how personal is a fair concern) data for individuals is not a concern for me. What does concern me, however is the unquestioned assumption created from nearly 50 years now of efficient markets nonsense that such information must be monetized. If you collect such data, you are required to use it to make a profit. The single-minded pursuit of profit (greed) is eating away at almost every society in the world. After it destroys humans’ interpersonal lives, it will start on the flesh. Do humans taste like chicken?

    • Prof James Beckman, Germany
      May 18, 2018 at 12:18 pm

      Agreed, Ken, as after all didn’t Adam Smith also write about the moral dimensions of capitalism? Some of the super-rich support legitimate foundations, but most are seemingly willing to snuff out the lives of their nations’ inhabitants with support for inferior health care education & infrastructure.

      • May 19, 2018 at 5:46 am

        James, why would the willingness of capitalists to “snuff out the lives of their nations’ inhabitants with support for inferior health care education & infrastructure” surprise any of us? They received their instructions directly from the prophet of capitalism, “The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are–or would be if they or anyone else took them seriously–preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.” (Milton Friedman)

      • Prof James Beckman, Germany
        May 19, 2018 at 7:53 am

        Ken, you make sense. However, how then can we go to war or put workers in very dangerous work situations in order “to do a job”? We can infer consequences from experience, such as any informal “risk analysis” implies. It is not capitalism or socialism here, as ownership models, but the role of managers who put workers into risky mines or military situations, it seems to me.

      • May 20, 2018 at 5:38 am

        James, contrary to what humanists may tell us, human culture is malleable. So malleable in fact that during WWII the most dangerous part of the Nazi state was the ordinary, everyday police. During the American Civil War biological brothers killed one another and friends for years subjected one another to torture and deprivation to the point of death. Many news reports in the US of murder, assault, rape, etc. while dozens looked on but did nothing. The “banality of evil” (Hannah Arendt’s phrase) is with us always. Managers learn that growth of the company or business is essential. They will do what’s necessary to gain that growth. Even placing workers in harms way or depriving workers of income and security. In negotiating a union contract, the CEO of one the companies told me that he would like to grant our requests but would be fired immediately by the board if he did so. To protect the company and its profits was his top priority because it was the only priority he was allowed. Arendt’s phrase came from her study of Adolf Eichmann, a man with no ambitions beyond personal advancement. He would never consider murdering his boss even for this, however. His crime, per Arendt, lack of imagination. He was not stupid and at his trial explained in full the “reevaluation of values prescribed by the Nazi government.” In her final summing, Arendt tells us it was sheer thoughtlessness that predisposed Eichmann to become one of the greatest criminals of WWII. “That such remoteness from reality and such thoughtlessness can wreak more havoc than all the evil instincts taken together which, perhaps are inherent in man—that was in fact, the lesson one could learn in Jerusalem. But it was a lesson, neither an explanation of the phenomenon nor a theory about it.” Is capitalism as great a threat to humankind as Nazism? A question we need to answer.

      • Prof Dr James Beckman, Germany
        May 20, 2018 at 7:18 am

        Ken, very nice summary of the situation. Many political leaders exhibit the same focus on retaining power, as do business leaders, as this gives them a variety of satisfactions including a title (social aspect), money (direct & indirect payoff) & power (keeping people off your back/doing your bidding). That is a total gestallt with which Arendt would have been well informed.

      • May 22, 2018 at 3:30 am

        James, you’ve got it backwards. Political leaders may want to stay in power. But they can do that only if those they “lead” don’t run away from them. Hitler took the people of Germany (80% of them) with him into National Socialism. Thus, the problems involved with maintaining the group and having it perform effectively as a group were resolved, for a period. In fact, many historians have observed Nazi Germany was one of the most efficient and effective, and brutal and racist groups in modern history. As I said, there are lots of ways for culture to solve the problems of group cohesion and cooperation. Other cultures may abhor those used in Nazi Germany. Point is, however, they worked.

      • Prof Dr James Beckman, Germany
        May 22, 2018 at 10:49 am

        Hi, Ken, I don’t think we disagree. First, you take political power. Then you massage your voters as Mr Trump & PM May are both trying to do–Mr Trump more with the electorate & PM May more her Parliament. Further, Hitler saw no necessity for another public vote, nor May by her Parliament. Trump probably dreads the day.
        Trump, May & Hitler had a portion or more of the media strongly supporting them. Trump is now busy attacking the Washington POST & NY TIMES, while editors opposing Hitler ran for their lives. May now gives her ministers little projects to keep them under control. Thus, we the illiterate masses are either massaged or ignored much of the time and serious discussion is minimal, it seems to me. Makes life easier for our state CEO’s. does it not?

      • May 23, 2018 at 6:15 am

        James, we do disagree. What is “taking power?” Government offices can be seized. But they can’t be held outside of agreements on which actions and which groups are in charge. Hitler, and Trump belong to their followers. To the groups who create the communities called Nazism and Trumpism. Hitler was a member by birth. Trump is a member by adoption. Yes, some of the devices to foster cohesion and cooperation in the communities are different; others are the same. Most of the members of these communities would not rebel against them, even if given the opportunity. How does one rebel against one’s own identity? In communities such as these, outsiders are not tolerated.

      • Prof Dr James Beckman, Germany
        May 23, 2018 at 8:36 am

        Hi, Ken, as an Austrian Herr Hitler was initially an outsider to Germans, but he was successful in overcoming exclusion. Ditto for Herr Trumpf, who as a self-professed billionaire, certainly was not one of the economically dissatisfied. He too overcame exclusion.
        My point is that exclusion can be overcome by appropriate behavior, obvious to the more clever among our human tribe.

      • May 23, 2018 at 10:07 am

        James, read Hitler’s speeches, and particularly the responses to his speeches in Germany. He was a member of the Volk and understood well who its members were and what they felt and wanted. Trump is a “rich man” whose language and actions wholly line up with far-right groups, particularly far-right militias. For these groups, wealth is of less importance compared to the right racial and militancy perspectives, stated publicly and bluntly.

      • Prof Dr James Beckman, Germany
        May 23, 2018 at 1:36 pm

        Hi, Ken, of Herr Hitler was a member of the Volk, but Austrian were not automatically accepted as Germans. Even today, living in Hessen but close to the Bavarian border, one sometimes hears “but he’s not one of us” referring to someone from a village 20 km away. It is sometimes the some with the former DDR which commenced about 10 km from where I live as the crow flies. But for a gifted orator & surrounded by a vew PR folks, this was a non- challenge, I expect.
        Actually for Trump it was easy to play upon the jealousy of the far less affluent, just as his father was jealous that he was never accepted into the society of real estate developers from other boroughs, many of whom were Jewish. (If not his father’s father, at least his father found it easy to hate/disrespect anyone who wouldn’t accept him or who was in a group considered inferior for real estate transactions, it seems from newspaper articles.)

      • May 24, 2018 at 3:40 am

        James, as historians note, now is not then. When Hitler and associates began what would become the Nazi Party, World War I had just ended. In that war Germany and Austria-Hungary were allies. Hitler served in their army. Was a hero in their army. So, Hitler was a member of the Volk. But not an Aryan it turns out. Fred Trump was a bigot and racist. But the NY real estate business was filled with racists and bigots. He wanted to be a player in the politics of NY. Which lead him to Roy Cohn and the John Birch Society. The next step was fascism and the plot to overthrow the US government during WW II. So, you see Donald’s family have been traitors for over 50 years. That made it easy for Donald to channel his hatred of the US into the anger of the right-wing hate groups and militias as well as those left behind by Reagan’s, Bush’s, and Clinton’s grand plan to make the US the financial bastion of the world while shutting down all those heavy industry jobs (steel, autos, heavy equipment) of the 19th and early 20th centuries.

      • Prof Dr James Beckman, Germany
        May 24, 2018 at 11:45 am

        Ken, I’m with you on everything except for Donald’s hatred of the US. I think it more honest that he hated other economic successes who looked down on him. After all, over three generations the Trumpf’s had done what was very unlikely in Europe.
        I didn’t know about the membership in the John Birch Society, but living in Orange County at the time I am not surprised, due to its wide attractiveness.

      • May 25, 2018 at 10:30 am

        James, per Trump’s own statements and actions, he hates all the following: non-whites, women, anyone who disagrees with him (including Republicans), anyone who doesn’t give him 100% loyalty, intelligence officers, and Democrats. That’s about 90% of the USA population. That’s hating America. Unfortunately, some of those he hates continue to follow him. He is their man. Both Trump’s father and the father of the Koch brothers were members of the John Birch Society.

      • Prof Dr James Beckman, Germany
        May 25, 2018 at 3:25 pm

        Ken, if you have Trump’s own words on this, we have some evidence. On the other hand, he is such a consummate rejector of truth….

      • May 26, 2018 at 8:40 am

        James, just a few examples. Mexicans crossing the border into the USA are all “murders and rapists,” Charlottesville, VA riots “’Some Very Fine People on Both Sides,” NFL players who kneel during the national anthem should be “deported,” the FBI is “crooked” and “corrupt,” the press is all “fake,” “I don’t support democracy,” to Xi Jinping on his presidency for life, “maybe we need to try that here.” Hundreds more. Just see newspaper websites.

      • Prof Dr James Beckman, Germany
        May 26, 2018 at 2:43 pm

        For sure, Ken, Mr T is almost a living exemplar of “untruth”. You have collected your examples most admirably!

      • Prof Dr James Beckman, Germany
        May 24, 2018 at 11:53 am

        Hi, again, Ken, also I don’t know about plans from the White House to make Wall Street the global economic hub. I have never heard about that before, although I knew Wall Street folks who considered themselves indeed “Masters of the Universe”.
        Of course, it was not until tech became a roaring success–after 2010. say–that the con- tinuation of fabrication using CAD/CAM/robots became a possibility. Coult it be that this is part of la Donald’s thinking–bring back mfg but to a near workerless environment? I doubt it

      • May 25, 2018 at 10:32 am

        James, Reagan brought in many conservative economists and bankers. These included Murry Weidenbaum, Martin Feldstein, and Beryl Sprinkel, William Niskanen, Jerry Jordan, William Poole, Thomas Gale Moore, and Michael Mussa. Niskanen was one of the founders of Reaganomics. Paul Krugman and Larry Summers were also involved. Arthur Laffer was involved but was not part of the administration. America was at a crossroads in the 1980’s. The current industrial sector needed massive new investment and government oversight to compete with the emerging industries in Germany, Japan, etc. Rather that favor these investments or write the laws necessary to remake the USA industrial sector these economists saw more opportunity for profit in using America’s position as banker to the world while simultaneously downsizing the USA’s industrial sector. For a while, a short while, the policy worked to make USA bankers, hedge funds, and brokers richer. It never helped the ordinary American. Now the banks and hedge funds are out of control. Labeling any sort of concoction, a sound investment assured to turn a profit quickly.

      • Prof Dr James Beckman, Germany
        May 25, 2018 at 3:29 pm

        Certainly those bankers know how to sell their products, Ken. Here in Germany I see Germans patiently adding to their savings, a significant proportion consisting of real estate. Perhaps they save their stock investments for out-of-country accounts.

      • May 26, 2018 at 8:43 am

        James, the world has been “financialized.” And the USA began it. In the before world, companies made money by making and selling a product. Now most of the money made by the biggest corporations is made by renting credit access. Even the once big USA manufacturing companies now make more money from selling financing (e.g., GMAC, Ford Credit, housing rentals, home loans). Saving is the enemy of all these financialists. They like borrowing and debt.

      • Prof Dr James Beckman, Germany
        May 26, 2018 at 2:47 pm

        For sure, Ken. Ever since General Electric unloaded its lending activities it seems to have lost its way in profits. I don’t think it’s big in aircraft leasing, but it would have done well there, considering its own aircraft products as an entry. Someone needs to become the King of Student Loans, I suppose. The Chinese do most of the heavy lifting in transport these days, with an eye to equalling the other international aircraft makers.

      • May 27, 2018 at 6:51 am

        Financialization is our problem to solve. If we can. In the 1950s Daniel Bell wrote about “post industrial society.” Greta Krippner, a sociologist in her book “Capitalizing on Crisis,” makes the claim that Bell’s talk of a post-industrial society was correct and that financialization is its form. Further, she claims the development of financialization was the result of several mistakes and poor understanding by the Reagan Administration. The Administration promoted financialization not knowing or caring where it would lead. Financialization is defined as a primary focus on financial activities for company profits. Krippner argues that financialization solved several intractable problems for the Reagan Administration as it sought to extricate itself from the dilemmas that marked the crisis of the 1970s (e.g., the stagflation that destroyed the Carter Administration). But the Reagan Administration did not seek to create a rentier regime. Rather, financialization was an indirect (and, at the time, misunderstood) result of opening global capital markets—a development that allowed the Reagan Administration to sidestep the hard budget constraints that had confronted previous administrations. As such, she argues that an analysis of the financialization of the U.S. economy offers an important corrective to the view commonly associated with the globalization literature that capital has escaped the control of the state. Rather, at least in the case of the USA, the state has been able to harness developments in global capital markets to domestic political objectives. The Administrations following Reagan continued this transition. It led eventually to what we see today – the dominance of shareholder value in corporate governance, expanding dominance of capital market financial systems over bank-based financial systems, and the coming of an entirely new CEO culture based on stock options/prices that increased CEO compensation more than a hundred-fold.

        In a 2003 interview economist Michael Hudson describes financialization as “a lapse back into the pre-industrial usury and rent economy of European feudalism.” He describes the consequences of this lapse thusly,

        “only debts grew exponentially, year after year, and they do so inexorably, even when—indeed, especially when—the economy slows down and its companies and people fall below break-even levels. As their debts grow, they siphon off the economic surplus for debt service (…) The problem is that the financial sector’s receipts are not turned into fixed capital formation to increase output. They build up increasingly on the opposite side of the balance sheet, as new loans, that is, debts and new claims on society’s output and income.

        [Companies] are not able to invest in new physical capital equipment or buildings because they are obliged to use their operating revenue to pay their bankers and bondholders, as well as junk-bond holders. This is what I mean when I say that the economy is becoming financialized. Its aim is not to provide tangible capital formation or rising living standards, but to generate interest, financial fees for underwriting mergers and acquisitions, and capital gains that accrue mainly to insiders, headed by upper management and large financial institutions. The upshot is that the traditional business cycle has been overshadowed by a secular increase in debt. Instead of labor earning more, hourly earnings have declined in real terms. There has been a drop in net disposable income after paying taxes and withholding “forced saving” for social Security and medical insurance, pension-fund contributions and–most serious of all–debt service on credit cards, bank loans, mortgage loans, student loans, auto loans, home insurance premiums, life insurance, private medical insurance, and other FIRE-sector [Finance, Insurance, and Real Estate] charges. … This diverts spending away from goods and services.”

        Succinctly, financialization is corrupting and destroying every western nation and Japan. China and Russia escape it because they refuse to accept it, although China is using its consequences against the USA and other western enemies.

      • Prof Dr James Beckman, Germany
        May 27, 2018 at 7:23 am

        Ken, for decades marketers have received the majority of the public blame for heavy personal debts as perhaps you know. This question ought to be considered apart from the debts of businesses & governments, I expect. Mr T has proven himself a prime candidate for a “Debtor of Lifetime” award, between his real estate-fueled debt/bankruptcies & his recent approval of the new tax law which will add billions to the national debt at estimated future prices according to a just-releaed report from the Congressional Budget Office.

      • May 27, 2018 at 9:37 am

        James, I’m a big fan of Billy Wilder. In his movie “One, Two, Three” there’s a wonderful line spoken by James Cagney’s character. His new son-in-law is East German. Cagney’s character makes over the son-in-law to introduce him to his boss at Coca Cola. After the remaking is done, Cagney character gives the son-in-law the total debt he’s incurred for the remake – $10,000. The son-in-law replies, “You mean I’ve been a capitalist for three hours and I already owe $10,000.” Cagney’s character’s reply, “That’s what makes our system work, everybody owes everybody.” Financialization changes that to “everybody owes the owners of capital (money).”

      • Robert Locke
        May 23, 2018 at 7:13 pm

        James, Ken, when I taught German history in the 1960s, I had my students read William Sheridan Allen’s the Nazi Seizure of Power: The Experience of a Single German Town (1965), instructive reading about fascist local takeover, for Americans today as well as Germans then.

      • May 24, 2018 at 3:56 am

        Robert, excellent choice. Detailed and insightful. My one major disagreement with Allen is he seems to credit the Nazis with undermining the democratic government. That was done by others, most importantly, the treaty that ended WW I and the related bankruptcy of Germany. Not to mention the ridicule heaped on Germany by the winners in WW I, particularly the British.

      • Prof Dr James Beckman, Germany
        May 24, 2018 at 11:40 am

        Thanks, Ken. I have the actual history of the city where I live. On one “Krystal” night all the Jews disappeared, never to be heard of again. Their property was confiscated & their small religious building only returned after WWII–but there is no one to use it. The Muslims?

      • Robert Locke
        May 24, 2018 at 9:36 am

        A second book I found very useful in the course on the Nazi Seizure of Power, was Das Ende Der Parteien, edited by Erich Matthias and Rudolf Mosley (1960), which clearly revealed a major cause for the Nazi Takover to have been the absence of any tradition of democracy in German party life. All the small splinter parties that favoured democracy did not have more than 10% of the vote. Weimar relied on the SPD to defend it, the Communists, who betrayed it, and the Catholic Centrum,who also sold out. With friends like that who needed enemies. I couldn’t assign this book to my undergrads to read because it was in German..

      • Robert Locke
        May 25, 2018 at 6:41 am

        James, in Gorelitz there was a large and affluent Jewish community before 1933; the synagogue stands empty today, but there is still a Jewish presence, without Jews actually living in the city, in the form of their ownership of property returned after the expropriation, and the curious phenomenon of Israeli’s buying property in the city nowadays. I asked the requisite bureaucrat in the Grundbuch Office, why, and she answered that Israelis’s purchase of Goerlitz property seems to be a sort of insurance, somewhere to jump if things went badly for them in the Middle East.

      • Prof Dr James Beckman, Germany
        May 25, 2018 at 3:22 pm

        Fascinating information, Robert. I expect some Israeli’s are nostalgic due to their own family histories. However, I personally don’t have any special attachment for physical property.

      • Craig
        May 27, 2018 at 7:40 am

        You’re 5/27 post is exactly spot on. It is a litany of Finance’s additional costs post retail sale and so lays bare its money creating power to be parasitic and illegitimate. It also accurately describes many of the means by which finance’s virtually monopolistic paradigm of Debt Only as the sole vehicle and form for the distribution of credit/money sucks the profits and vitality out of the rest of the legitimate economic/productive process. Systems were made for Man, not man for systems. I’m confident everyone here believes this to be true. They just don’t know how to make the system serve us.

        Modern economies’ two primary and chronic problems are scarcity of free to spend individual income and price/asset inflation. A universal dividend begins to resolve the first problem, and the twin digital discount/rebate policies at the point of sale between business models throughout the entire length of the productive process and also the 50% discount at the terminal end of that process for every item or service at final retail sale….which point just so happens to also be the terminal expression point for all consumer price inflation….and so these three policies automatically double everyone’s purchasing power and not only resolves the chronic problem of inflation, but painlessly and beneficially accomplishes what has up to now been considered impossible, namely the integration of price deflation into profit making systems. That is far more than any theorist or politician has ever conceived let alone accomplished, and its not even the end of the benefits that follow on from them.

        Such dramatic and definitive progress characterizes a paradigm change, and that’s exactly what we need.

      • May 28, 2018 at 5:20 am

        Craig, some good points but don’t forget all the things you want to fight are not accidental. A little history here. Lewis Franklin Powell Jr. (September 19, 1907 – August 25, 1998) was an Associate Justice of SCOTUS, serving from 1971 to 1987. Powell compiled a conservative record on the Court and cultivated a reputation as a swing vote with a penchant for compromise.” But before he was a Supreme Court Associate Justice, Powell planned the future we’re now living. On August 23, 1971, Powell was commissioned by his neighbor, Eugene B. Sydnor Jr., a close friend, and education director of the US Chamber of Commerce, to write a confidential memorandum titled “Attack on the American Free Enterprise System,” an anti-Communist, anti-Fascist, anti-New Deal blueprint for conservative business interests to retake America for the chamber. It was based in part on Powell’s reaction to the work of activist Ralph Nader, whose 1965 exposé on General Motors, Unsafe at Any Speed, put a focus on the auto industry putting profit ahead of safety, which triggered the American consumer movement. Powell saw it as an undermining of Americans’ faith in enterprise and another step in the slippery slope of socialism. His experiences as a corporate lawyer and a director on the board of Phillip Morris from 1964 until his appointment to the Supreme Court made him a champion of the tobacco industry who railed against the growing scientific evidence linking smoking to cancer deaths. He argued, unsuccessfully, that tobacco companies’ First Amendment rights were being infringed when news organizations were not giving credence to the cancer denials of the industry. That was the point where Powell began to focus on the media as biased agents of socialism. The memo called for corporate America to become more aggressive in molding society’s thinking about business, government, politics, and law in the US. It sparked wealthy heirs of earlier American Industrialists like Richard Mellon Scaife; the Earhart Foundation, money which came from an oil fortune; and the Smith Richardson Foundation, from the cough medicine dynasty to use their private charitable foundations, which did not have to report their political activities, to join the Carthage Foundation, founded by Scaife in 1964 to fund Powell’s vision of a pro-business, anti-socialist, minimalist government-regulated America as it had been in the heyday of early American industrialism, before the Great Depression and the rise of Franklin Roosevelt’s New Deal. The Powell Memorandum thus became the blueprint of the rise of the American conservative movement and the formation of a network of influential right-wing think tanks and lobbying organizations, such as The Heritage Foundation and the American Legislative Exchange Council (ALEC) as well as inspiring the US Chamber of Commerce to become far more politically active. CUNY professor David Harvey traces the rise of neoliberalism in the US to this memo. Powell argued, “The most disquieting voices joining the chorus of criticism came from perfectly respectable elements of society: from the college campus, the pulpit, the media, the intellectual and literary journals, the arts and sciences, and from politicians.” In the memorandum, Powell advocated “constant surveillance” of textbook and television content, as well as a purge of left-wing elements. He named consumer advocate Nader as the chief antagonist of American business. Powell urged conservatives to take a sustained media-outreach program; including funding scholars who believe in the free enterprise system, publishing books and papers from popular magazines to scholarly journals and influencing public opinion. This memo foreshadowed a few Powell’s court opinions, especially First National Bank of Boston v. Bellotti, which shifted the direction of First Amendment law by declaring that corporate financial influence of elections by independent expenditures should be protected with the same vigor as individual political speech. Much of the future Court opinion in Citizens United v. Federal Election Commission relied on the same arguments raised in Bellotti. Jack Anderson of the Washington Post made the memo public, claiming Powell was attempting to undermine American democracy. However, in terms of business’ view of itself in relation to government and public interest groups, the memo only conveyed the thinking among business persons at the time. The real contribution of the memo was to facilitate institution-building, particularly updating the Chamber’s efforts to influence federal policy. The memo was a major motivator for the Chamber and other groups modernizing efforts to lobby the federal government and shape the future of American society. Trump benefited from all this work, even if he couldn’t read the memo (too many big words).

      • Craig
        May 29, 2018 at 12:28 am

        Yes, I’m well aware of The Powell Memo. What we require is a new INTEGRATIVE Powell Memo, it being a mere reaction to liberalism. Integrating the best aspects of both the left and right economic perspectives so as to create a thirdness greater oneness is precisely what the policies I post about here will accomplish. Integration of truths and the simultaneous deletion of untruths is the very process of Wisdom itself.

        Liberals and conservatives get stuck in their respective orthodoxies and miss the real point of logic and progress. The Thirdness greater oneness/trinity-unity-oneness process the dialectic [( thesis x antithesis) synthesis ] gets lost in all of the heat but little light.

      • May 29, 2018 at 5:42 am

        Craig, a grand discussion, and integration of the most workable and useful aspects of liberals and conservatives is a grand idea. Its loss is one of the things that makes the USA Congress dysfunctional. But in the present circumstances the dispute is not between conservatives and liberals. In fact, conservatives are left out of the present struggle. Liberalism battles itself. On the one hand there are political liberals seeking human rights and universal suffrage. On the other hand, economic (business) liberals seeking the end of restrictions on “free markets” and the pursuit of investor profit. Conservatives and liberals have in many instances been able to talk and often compromise. Not so with the two liberal foes. They view one another as traitors to “real” liberalism. And neither is willing to consider compromise, whatever that might be. And that brings up important points about the motivations for documents like the Powell memo. For business liberals (e.g., firms, chambers of commerce, stock exchanges) any disagreement was not just an attack on the foundations of western civilization but a sure sign of the takeover by socialism. Such disagreements must be resisted and stopped in all ways possible, including propaganda, lying, bribery, and even murder. One of the first things I learned in combat is it’s not an advantageous setting for negotiations. This is where we stand today in the struggle over “free enterprise.” Rather than considering how to negotiate better, I recommend we consider instead how better to win the combat.

      • Prof Dr James Beckman, Germany
        May 29, 2018 at 7:24 am

        Craig, it will take younger players to reach that dialectic, I expect. Yesterday I read of three Democratic office-holders at state level–all with combat experience in Middle East–covering
        the nation, obviously offering themselves for higher public office. Since Trump & his closest advisors have NO military experience, this is an effort to bring realism & a positive national pride into the public arena. US national political leaders tend towards their 60′ & 70’s, do they not?

  4. Craig
    May 22, 2018 at 8:50 am

    The way to tame/remedy capitalism’s suave dominance is the same remedy for socialism’s tendency toward rather un-suave dominance. Love and its active form grace/graciousness as a zeitgeist/ethic and applied monetary and economic policies that align with and effect its primary aspects. Like a universal dividend and discount/rebate policies at strategic points throughout the entirety of the legitimate economic/productive process. Abundant, direct and reciprocal monetary free gifting IS the new monetary and economic paradigm….because it will bring rational, ethical and good and appropriate order to economic systems.

    • May 22, 2018 at 9:28 am

      Craig, maybe it will bring torture and death squads. Lots of ways to solve the problems of group coherence and cooperation. Some you obviously like. Others you just as obviously do not like. What’s your plan when the job is done well by those you hate, as with fascist, racist, violent groups in America today? Once debated this issue in a Boston Unitarian Church. One of the panelists agreed with your proposal. But she said something interesting about the issue I’m raising. What if the offer of free gifting is met with violence? Her response – bury the bodies and pray, but don’t give up on the idea. Thankfully, we’ve not come to this yet. But it is something you ought to consider.

      • Craig
        May 22, 2018 at 7:35 pm

        Violence as a reaction to receiving a gift is fundamentally unbalanced. Now you may have such anecdotal reactions, in fact you absolutely will have them, but the vast majority of individuals despite their not being perfectly rational or ethical will have positive and constructive reactions to it. Man is basically good yet flawed. To recognize this as true think about how many truly evil and incorrigible people you’ve met in your life compared to how many flawed but basically good ones you’ve known. We have a justice system to deal with broken and violent people. We must press on for evolution toward a society based on the wisdom of the natural philosophical concept of grace/graciousness and its reflective economic policies of monetary free gifting, and not let fear or hair splitting analysis get in the road of it.

      • May 23, 2018 at 6:16 am

        Craig, look at human history. If nothing else look at religious prophets. They have been persecuted and murdered throughout human history. They wanted to provide great gifts to humankind. The response was often brutal torture and excruciating death. Human culture and thus human psyches are malleable. Humans are not evil or good but can be both depending on situations and history. Again, human history confirms this. Reigns of terror are common in human history. From Genghis Khan who wiped out one quarter of the world’s population, to the Crusades that murdered at least half a million, to France’s reign of terror that murdered about 200,000, to World War 1 that murdered about 12,000,000, to the Nazi invasion of Russia that killed over 20,000,000. I wish you luck with responses based on wisdom. Still more likely in my view for responses to be violent and often deadly.

      • Craig
        May 23, 2018 at 9:18 am

        You’re talking about the falderal before gifting would be implemented. I’m talking about after it was. I’m fully aware of humanity’s propensities to be subject to demagogues. Look at the US presently, but if the leaders overt (pols) or covert (finance) aren’t homicidal maniacs and the movement to get gifting implemented was peaceful and alerted the populace to avoid/prevent war there wouldn’t have to be a repeat of history. Regardless, it’s a great purpose whose time has come.

      • May 23, 2018 at 10:10 am

        Craig, good luck. Always admire brave people.

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