Regulating Facebook: Radical change or the status quo?

(I’m currently travelling through Brazil interviewing people for a book project on knowledge governance, hence the untimeliness of this post. (What’s the opposite of the hot take? Cool reasoning?) But since I haven’t seen this opinion anywhere else, and because writing this helps me organize my own thinking, here it is.)

I’ve been thinking a lot over the past few weeks about the disappointing backlash (as noted by David Murakami Wood and others) against April Glaser’s important and courageous article on why privacy advocates like the Electronic Frontier Foundation haven’t been more active in the policy debate over pervasive corporate surveillance. When activist firebrands like EFF and others, as Glaser notes, do not have “campaigns related to Facebook, or … proposals for any kind of legislation that would address the ways Facebook and other companies surveil your every mood – and which has been linked by the United Nations to genocide and by the New York Times to all degree of murderous unpleasantness around the world – something’s going on.

EFF and privacy activists play an important role in the debate over data and online regulation: they effectively set the boundaries for the limits of debate over these issues, a role that was first highlighted for me when I was interviewing people in DC for my dissertation on digital-copyright politics. So to have them warn against moving too quickly suggests to me that we should be thinking hard about what’s happening here.

To be clear, I don’t doubt that EFF and other privacy activists sincerely want to reform Facebook and the data-driven economy. And when it comes to state surveillance, you can’t really question their bonafides. It seems to me that a lot of the anger over Glaser’s (very fair and measured) article stems from the fact that in this instance – the debate over how to deal with corporate surveillance and the larger issue of the data-driven economy – EFF and other privacy activists/groups are acting like status quo actors when most people are used to thinking of them as principled (or radical, depending on where you sit) actors. They’re interested in tweaking the knowledge economy, not dealing with its underlying problems.

Here’s the political science. In a great 1993 article, Harvard political scientist Peter Hall argued that there are three types of policy changes. First-order policy changes are routinized and incremental – think adjustments to Facebook’s algorithm to fine-tune its results. Second-order changes involve a reordering of policy tools without changing the ultimate policy objectives. A good example here might be Zuckerberg’s recent announcement of changes to Facebook’s news feed to prioritize personal content. This category would also include calls for software designers and engineers to act more ethically when designing their products, or for Facebook to place a higher priority on individuals’ privacy. It’s a tweak to the system that leaves the system in place.

Third-order policy changes, finally, involve a wholesale reordering of ultimate policy objectives. This would be akin to banning targeted advertising, or forcing social networks to run as non-profits or some kind of heavily state-regulated utility. Or even nationalizing Facebook, perhaps.

An ideological debate

The nice thing about thinking in terms of second- and third-order changes is that it highlights clearly the policy debate at hand. It strongly suggests that the backlash against Glaser’s article is highly ideological and is centred on one of society’s most fundamental organizing principles: what is the appropriate relative balance between the state and the market in this area?

Glaser, I think, is arguing for third-order change, while EFF and others are calling for second-order change. Second-order change involves things such as data portability, strengthening individual consent, calling on engineers to act more ethically, and greater platform transparency.

These policy options are consistent with a suspicion of government regulation, an embrace of a minimally regulated free market, and an ideological belief that market competition will deliver the discipline necessary to sort out any privacy problems. In other words, the standard economic framework that’s been in vogue since the 1980s era of Reagan and Thatcher. You can’t get much more status quo than that.

Against this position, the argument that government does have a legitimate role to play in the regulation of the data-driven economy, and social networks, and that the market does not necessarily deliver optimal social results, is distinctly third-order. (I’d position myself here.) This position would note that there is a legitimate role for the state to act in cases of market failure, including dealing with monopoly power and negative externalities (such as contributing to genocide in the pursuit of profit.) In such cases, the market is incapable of working in a socially optimal manner.

This is the crux of the issue: which will deliver better results for society, the market or government regulation of a monopoly/imperfect competition situation?

Different societies, and different groups have different answers to this problem. As a Canadian, I’m very conscious that much of the commentary regarding how organizations like Facebook should be regulated reflect particular American notions on the appropriate state-market balance, and on what constitutes speech that do not necessarily hold in other countries or societies (or, indeed, amongst non-white, non-male US groups).

The big questions

What all this means is that there are two issues to consider. First, does this moment require second-order change, or is the situation serious enough to reconsider the fundamental nature of the data-driven economy and of social networks?

Second, the debate over how to regulate Facebook et al has no easy, technical solution. Setting the balance between the state and the market is one of the most fundamental choices a society must make. Not only does this type of debate not easily invite compromise, but such battles (think welfare state vs neoliberals) are intensely personal, vicious and – sorry, folks – political.

The debate over Facebook is inviting us to reconsider what type of society we want, not just with respect to novel hi tech data/surveillance problems, but also in more traditional terms. It’s actually kind of ironic that Silicon Valley, with its widespread belief that technology can render politics obsolete, may end up sparking a debate over the economic and social free-market consensus that has dominated US society (and the world) for the past four decades.

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