Facebook is a Smarmy Nanny at Cross-Purposes to Itself?! Well, DUH!

My friend Kevin Hayden was recently suspended from Facebook for 12 hours, for posting a photo of what appeared to be a shemale/pre-op M2F transsexual, sans knickers, backlit in a sheer gown. Is that enough description? Is more really necessary, much less tasteful?

Just in case, the photo is here: 

This got me to thinking about Facebook, its willingness to "police" its space, and the significance, from a business standpoint, of alienating the people upon whom an entrepreneur is counting to provide the stock-in-trade that makes the entrepreneur's business model make sense, much less function. The business ramifications will be better addressed on the sister blog, The Skeptical Entrepreneur. What I'm looking for here is the social aspect of Facebook banning its data sources - which are, after all, its primary monetizable product.

The first problem presented by Facebook's (effective) censoring of Kevin's post, as it is with any banning of a Facebook member by a "suitability" team that spontaneously, unilaterally and with neither notice, nor appeal bars members from entering and participating in the FB community, is one of credibility and propriety. Who asked FB to be the thought police? Who asked FB to establish "acceptable" "standards" of behavior? Who asked FB to become the conscience of the community?

The first answer would be, Mark Zuckerberg's prudence. Zuckerberg knew that if he was going to float FB on the capital market, he was going to have to institute corporate-governance policies that would reduce the risk of exposure of Facebook, Inc. to lawsuits by (parents of underage) "victims" of anti-social behavior conducted on Facebook. Lawsuits are inherently crapshoots; the most slam-dunk claim can be dismissed, and the most specious claim can lead to a bonanza payout, depending on the jury.

This is CYA corporate governance, but it reveals a larger societal problem, one that is hindering economic growth as much as excess production capacity and a scarcity of demand for labor. CYA corporate governance effectively turns over management of the enterprise from the owners/owner-appointed managers to the prospective customers. Given the fundamental tension between the firm and its customers, who both want to maximize the benefit they receive from each other, while minimizing the benefit that they give to each other, it is clear that allowing (potential) customers to dictate corporate policy, beyond a certain minimal degree of intervention, is a recipe for the business owner to wind up working, not for himself, but for his customers.

In that case, one wonders why Zuckerberg's agents, the "community standards team" at FB (or whatever they call themselves) would have banned Kevin. It seems counterintuitive - Zuckerberg & Co. work for Kevin, yet they are acting against the wishes of their actual boss (Kevin, not Zuckerberg). For discussion of the "actual boss"'s wishes, see discussion below.

The second specious answer would be the faulty notion, that first began to crop up during the intellectual-entrepreneurship boom of the mid-1990s, that corporate policies have the force of law; the corollary to that is that corporate managers have the right, capacity, and authority to shape society according to corporately-defined norms. This has long been a problem; it's one thing for corporations to demand that the State cater to its whims, either with the State's eager participation (the military-industrial complex), or reluctant participation (the fascist corporatist state, e.g., Italy from 1922 onward, Germany from 1934 onward). It is something else entirely when corporations begin to supplant the State, especially in terms of maintaining public order (one of the ways that the State asserts its authority), or in defining standards of public decency (a role that the State inherited from the Church as a concomitant of the secularization of society during the Enlightenment).

It is clear that the corporations and the State are different entities; as Mr. Chief Justice John Marshall observed in Dartmouth College v. Woodward, (17 U.S. 624, 636) that "A corporation is an artificial being, invisible, intangible, and existing only in contemplation of law." Since the State inherited the role of the King as the fons iustitiæ, the State precedes the corporation, both temporally and precedentially.

If one accepts the argument that the State precedes the corporation, then the State must be the creator of the corporation (assuming that the corporation is created, which I do). If the State is the creator of the corporation, then it is the limitor, and definer, of the faculties, functions, and capabilities of the corporation; a point made explicit by the U.S. Supreme Court in Ohio & Mississippi Railroad Co. v. Wheeler, 66 U.S. 1 Black 286 et seq. If the State limits and defines the faculties, functions, &c., of the corporation, then the corporation is subservient to the State, not the other way around. The corporation cannot exercise any of the powers of the State - maintenance of public order, and of general health and safety, regulation of behavior of its subjects (that is to say, its employees and agents), etc., unless those powers are specifically granted to the corporation by the State. The latter, being jealous of its prerogatives and obsessed with doing the one thing that the State does - namely, assert its power - is hardly going to delegate any of its police functions to its creature.

Absent a ruling from the Supreme Court on par, travesty-wise, with the ill-considered Citizens United ruling, there is no way for a corporation to masquerade as a State, or as a state-like (state lite?) entity. When corporations attempt to "punish," either their employees/agents or customers, they make a mockery of the State that created them, and fostered their development. Corporations don't belong in the discipline business. They belong in the selling-goods-and-services-profitably business. They should stick with their proper sphere of activity.

The groggy, but dogged reader will ask, by now, "What is the point of this discussion?" The point is that Facebook, in its self-imposed eagerness to impose a police-nanny state on its own constituents, is working at cross purposes to itself. By "protecting" its corporate reputation - by eliminating, or attempting to eliminate, as far as possible, the undefinable, only-imperfectly-quantifiable risk of civil litigation - Facebook undermines its core business function; namely, the aggregation of consumer data. As noted above, aggregated consumer data is Facebook's primary monetizable product.

By exiling Kevin, even for only 12 hours, for a post that putatively violates the terms of service, Facebook has denied itself the data stream of Kevin's posts, which in turn negatively impacts Facebook's revenue stream - no data, no revenue. While it is more likely than not, that the period of suspension came while Kevin was at work - thus, not generating a data stream in the first place - it would be (have been) the height of foolhardiness for Facebook to assume that a half-day suspension would occur when the user would not be actively posting. Such a "no harm, no foul" suspension would be a futile, impotent gesture, to say the least. The ramifications of such a shadow-boxing disciplinary regime might serve as the subject of another post; they need not be explored here.

The point is, that Facebook's effort to preserve its reputation and its business viability worked at cross purposes to itself. By cutting off one of its data streams (that is, one of its sources of raw material, to stretch a metaphor) in the interests of self-defined and self-imposed morality (the image is, at worst, of questionable decency; it is certainly not pornographic), Facebook's action served to harm its corporate interests, in the service of protecting Facebook's corporate reputation.

Thus, the smarmy police-nanny state that is Facebook worked at cross purposes to itself. A 21st-century American corporation working against its own self interest in its own self-interest? Well, Duh!

 
Kevin Hayden