The market is a ruthless regulator. Big corporations prefer government regulation because they to protect big corporations from the market, consumer choice, and upstart competitors. As the market ravages Facebook for its misdeeds, CEO Mark Zuckerberg thinks maybe "government regulations" would be a good idea. Of course he does!
The market is a ruthless regulator. Big corporations prefer government regulation because they to protect big corporations from the market, consumer choice, and upstart competitors. As the market ravages Facebook for its misdeeds, CEO Mark Zuckerberg thinks maybe "government regulations" would be a good idea. Of course he does!
The market is a ruthless regulator. Big corporations prefer government regulation because they to protect big corporations from the market, consumer choice, and upstart competitors. As the market ravages Facebook for its misdeeds, CEO Mark Zuckerberg thinks maybe "government regulations" would be a good idea. Of course he does!
Hello, everybody, and thank you for tuning in to the Liberty Report.
With me today is Chris Rossini.
Chris, welcome to the program.
Good morning, Dr. Paul.
Good.
I'd like to visit with you today, Chris, on this subject that's been in the news a lot in this past week, and it has to do with Facebook.
Everybody knows about Facebook, but I think people are learning more about Facebook right now on exactly what they're up to and how often they're cooperating and maybe making money off all the information they get from all their viewers.
They only have 2 billion customers out there using Facebook, and they get a ton of information.
It looks like they're making a lot of money.
They made a lot more money faster than way out of proportion to the number of new subscribers they have.
So the suspect is, is not only do the ads provide income to them, but there's some selling of data.
And I think that's what really is the story about.
It's been revealing how much is being done.
You know, even some people have come out and explained how much data was given from Facebook to the Obama political team.
So this is a serious matter.
So the question comes up, well, and a lot of, I've heard from some Republicans, well, we need more regulations.
We need another commission and an agency to go in and start regulating these social networks.
But that's not the side that I'm coming down on because I think there's other ways to regulate.
So often people say, well, shouldn't the government regulate?
They're acting out of hand and doing bad stuff, so we need regulators.
But there's other types of regulation, and that is regulations by the marketplace.
It may be that it's working already, but I think one of the things that we ought to talk about is a little bit today is about how these social networks work with the government.
Sometimes they get started, sometimes they sell them information.
So the government is involved.
This is not a pure free market company because we give them a lot of leeway.
You know, a private newspaper that doesn't publish anything we want and takes a different position.
We have no authority to close them down or monitor them.
But I think this is a little bit different.
It isn't like a private company.
And we read stories about startup money coming from the CIA.
And believe me, I think the CIA and the NSA is very much involved with all of the social networks.
And I think that's a danger.
Yes, it was quite peculiar to hear Mark Zuckerberg say that, hey, maybe Facebook should be regulated.
That's not a surprise, actually, if you look through American history.
Big corporations love government regulations because what ends up happening is the big corporations end up doing the regulating via government and they end up protecting themselves, kind of creating a moat around their business from new competition.
I mean, if you think about Ron Paul's presidential campaigns, you know how many big corporations were excited to get that free market message out?
Zero.
And that's the way it is today.
There is nobody breaking down our doors saying, government is killing us with these regulations.
Please help us with your free market message.
Big corporations, they love government regulations because they use it as their own protection.
You know, some people say, well, you've signed up.
You're a member.
You know, subscribe to the Facebook page.
And so therefore, you're in the door and you're participating.
Therefore, they have a right to do this.
But I think that's stretching it.
I think, you know, there's an implied contract there.
It would be nice to have that explicit, but there's an implied contract.
If you walk into a store or you go into somebody's house, it doesn't imply that any information you get, any pictures you can quickly snap, anything like this, you can sell.
So it's a far past anything that can't be, you know, that we should think about contract.
But I do believe there's an implied contract here that if you're signing up to use Facebook for certain reasons and it's pretty well understood for them all of a sudden to start selling this, and I think Zuckleberg is recognizing this because he's backed off a little bit.
He says, oh, if necessary, I'll come and testify.
But I think you're on the right track, Chris, that big companies, you know, like to write their own regulations.
And these are billionaire companies.
And it's sort of like the bankers when they'd come in for banking regulations.
Guess who fed the congressman and the staff the regulations, the big banks.
That's why nothing really gets done.
And that's why we favor, of course, the market regulations on these companies.
And when the information gets out, I think there's some things now that we can say working in the right direction.
The market has spoken already in this past week or two.
And I've seen some stories where Facebook could all of a sudden get into some financial problems.
Already, Zuckleberg has lost a lot of money.
He's only the fifth richest man in the world instead of the fourth.
But things can change.
And I think the market has reflected that they are getting a little bit skittish about what's going on in social networks.
Yes, it's really a shame because I don't despise Facebook.
It could have been something great.
Instead, Zuckerberg and the team or whatever, they're manipulators.
Instead of ABC, CBS, we now have Facebook, Google, and Twitter that are doing the censoring for us.
And not only censoring, they're also acting as surveillance.
And we're doing the legwork for them.
We're giving them the information.
It's not like the government's sending us a census saying, okay, tell us all your friends, what you're doing, where you are.
We're giving them the information.
It's like a bonanza for them.
So while there's good to Facebook, the bad is just way, way more.
Yes, and since this information has come out, there's been a change in the value of the stock.
People have started selling a stock.
They're not as confident about the company.
So there is a penalty for this.
And some companies now are deciding not to advertise on Facebook.
And that is good too.
But, you know, maybe they will clean up their act and it will be different and give some guarantees.
But they sort of learn to live with government.
And once you have as much success as some of these companies have, it's hard to all of a sudden convert to being a free market person because some of these companies, we do know that NSA and CIA are very much involved in the establishment of these companies.
And I have this image.
They're really an arm of NSA and the CIA.
And they can get as much information as they want.
And I'm sure they don't do it for free.
And they don't have liability for it.
You can't go ahead and sue them for giving money to NSA because they're the boss and they don't have to have legitimate search warrants to do this.
And so not only do I think some of these things were set up for this reason, I think they're perpetuated.
It's interesting, though, that if what I say is true, you know, it's pretty amazing if there's been this much information come out about one of the social networks where the people get a little bit worried about it.
But I'm with you, Chris, to say that you have to close down or have detailed regulations.
Matter of fact, we make use of Facebook.
It's a great thing.
The Internet is great.
But there should be some rules about it.
It's just, I think, the big difference between what we'll say and other conservatives and other Democrats will say, well, we need more official agency regulation, where we're saying that if the market regulates and you get the information out, you know, they will have to pay a penalty.
So it's interesting that if they are all-powerful, it's interesting that this much information did get out, which means it isn't all-powerful.
The Internet is a little bit bigger than that.
And I think there will always be, hopefully always competition where they can compete.
So in many ways, some of our arguments are working out.
But I think the biggest hurdle will be the close association between the surveillance state.
And both Edward Snowden and Assange has warned about this.
And they've studied this.
And they believe that they are very, very much involved.
And these companies literally have way more information than the government itself.
The government has to hire these guns to go out there and accumulate it.
And most people are very innocent when they use Facebook and Google and all these things.
But it gives tremendous economic information that companies will pay for because all of a sudden they can target their advertisement.
And maybe a more explicit contract would work.
That could have worked out in a free market where they give you an offer and they say, can we sell your information?
That's basically the way running lists, in the old days, a political list that you can't sell these lists unless you get permission or you tell people or if the person say, no, don't sell my name.
So it should be much more open.
And some of these problems could be solved without always coming to say, yes, what we need are more regulations and we need another agency in government because I'm convinced that that won't work.
I think what we need to do is continue to do what we've heard these last couple weeks.
Some people have gotten this information out to get our attention.
I, you know, understand this a little bit better than I did before.
And therefore, I think that we have to do is refine our arguments for the marketplace to do the regulation rather than resorting to the government writing the regulations and they're already part of the problem.
Yes, I'll close, Dr. Paul, by saying that technology is amazing.
It's one of the amazing parts of our lives.
There's a lot of benefits to them, but there could also be a lot of downsides that the government uses.
For example, with airplanes, the airplanes were great, and then the government uses them to bomb people.
And the same thing with drones.
They're amazing, and the government uses them to kill people, too.
So there's always that downside.
But right now, as long as there's a market, this is a golden opportunity for technology entrepreneurs.
I mean, if you're able to market yourself as opposite of Facebook, now Facebook is huge, so it's not going to be easy because people are slow to change.
But there used to be a MySpace, and now it's gone.
So it is possible unless Facebook and the government make it impossible for you to compete, and then we're stuck.
Yes, and I would like to just reiterate this idea that some of these companies can get too close to government.
And then we find out, and there's been accusations that Facebook and other companies are very, very friendly to the opposing factions to the libertarian position.
And they also can control the distribution.
Facebook can control the distribution of our material.
And yes, they can do that if it's absolutely private.
But if they have a mixture of government in there, this is different.
But it can be very, very political.
It's a money-making deal.
It's a power deal.
And it's been said that if they're our friends, we're going to take care of them.
So I think once these companies get this big and have this money, you know, they get a little bit too bold and they overstep and think there are no rules.
And once again, I'd like to emphasize the rules are there and we should use them and teach people that the marketplace is a very, very tough regulator.
A lot of people say, oh, Ron, when the big crash came in 08 and 09, you wouldn't have had these regulators.
Well, we've had them since the Depression and they didn't do any good.
But what did the regulators do?
They bailed out the wrong people and the innocent people suffered.
So regulation by government is not an answer.
A marketplace is a lot tougher.
The people guilty or in up and they're failing, they shouldn't get bailed out.
They should suffer their consequences.
Same way with social media.
If they're overstepping their bounds and people know about it, they should suffer the consequences.
So I think it's an important issue.
It's not going to go away.
And I guess it's going to go on for a while to find out what the final end will be for all the social networks as well as Facebook.
But we certainly want to strive to continue this technology that has been so beneficial in accumulation and sharing knowledge.
Regulation vs. Marketplace00:00:55
This to me is so wonderful compared to how slow it was when I first started getting involved in politics and economics.
Believe me, it was very, very slow.
But it was still there.
And even today, some of the big things are explained and passed on by word of mouth.
If there's too much control in the media, right now, people don't believe government.
They don't believe major media.
So there are ways of getting around it.
So the bigger job now is to sort it out on the social networks and on the internet because everything you read on the internet certainly isn't true.
So we want to contribute our very best to promoting a free society and try to explain how there are answers in freedom rather than saying, oh, let the government take care of it.
They know what to do.
Well, I'm not at that point.
I think we should be challenged.
I think the whole effort to promote peace is the way to get prosperity as well.
I want to thank everybody for tuning in today to the Liberty Report.