Since the dawn of commerce, man has looked for ways to gain some sort of benefit in the case of success and not lose in the case of defeat. It is the dream of every enterprising individual to be able to experiment without having to fear any negative consequences.
The most genius invention of mankind is, therefore, the limited liability company.
An imaginary entity that can act as any person in flesh and bone through the will of its owners. Multiple risk-taking individuals can come together to try something that they deem likely to be profitable. The worst that can happen is that they close down and are back where they were before they started. Their downside is limited to their invested capital and not their entire personal wealth. This system has allowed Europeans to dominate the far corners of the earth and make rapid advancements during a time period when Indian, Chinese and Central-Asian civilizations were stagnating within rigid systems.
The balance between letting individuals experiment with limited downside and people acting irresponsibly is extremely delicate. Multinational companies and giants like Alphabet and Facebook are taking these freedoms to their very extremes.
No one really wants to be responsible for anything. Where there is no responsible person, there is no one to blame.
The next evolutionary step here is already nearing completion. YouTube, Facebook and booking portals have, for years, developed and deployed algorithms that they claim they don’t understand. They are trying to manoeuvre into a position where their systems will be blamed and not they, themselves as owners.
This is obviously an extremely dangerous trend.
Not too long ago there has been a massive spike in flight prices from one day to another because an algorithm malfunctioned. Consumers lost a lot of money and many peoples holidays were ruined. The responsible company’s official response was that they were not responsible:
It was caused by an algorithm that they did not control.
Utter nonsense. Luckily, European regulators called them out on this. It is, however, telegraphing a dangerous trend.
As someone who has worked with advertisements on social media platforms for years, I can only say that it is getting increasingly harder to work with Facebook each passing year. Their algorithms are easily abused, don’t work the way they should, and customer support is completely incapable of actually supporting you as a customer, since they have no power over the underlying algorithm. “Just repost it and it shouldn’t get flagged again” is what I just heard from a Facebook marketing “expert” an hour ago.
“There is no way for me to help you. It was the algorithm that probably was played by some of your competitors with the help of bots to flag your well performing post as spam. That happens quite often.”
Naturally I tried to dig deeper and find out how I could get someone to actually support us with our issues.
That is in fact possible:
“You can have an entire team from Facebook at your side.
You simply need to spend more than $250,000 per month on advertisements.”
In which world is that an acceptable response? Of course, we appealed the deletion of our post but never got a reply since it “got lost in the system”.
Business is about trust and responsibility. Our societies must hold those that try to escape the consequences of their actions responsible for their systems, robots and algorithms. This is even more important if they are world-eating, multinational behemoths.
Regulation is the obvious go-to strategy for most governments but sadly not always the best if bluntly applied.
De-regulation of smaller, locally and responsibly lead competitors is a far more effective way of reigning in those that you have no real power over.
Once again, we can look to the Chinese governments handling of social media.
Local companies like Bytedance or Tencent were supported and got more freedoms than their foreign competitors as long as they adhered to a certain set of basic rules.
Facebook, Google or Twitter would never do such a thing.
Not because they value free speech but because it massively hurts profitability and holds decision makers responsible for their products.
This has led to some of the worlds leading tech companies being Chinese, as compared to none besides Spotify being European.
There has been competition in the early days.
I still remember having a “Lokalisten” (a German social network that started in 2005) account.
Just as our third world like internet infrastructure, the absence of dominant European software companies is a testament to the faults in our political environment thinking a maximum of 4 years ahead and not 40. Believing that noone is going to be able to compete with our car industry as long as we keep doing what we have done for the past 70 years.
We were cautious where we had to be bold and bold where we had to be cautious.
Local businesses that hardly had the resources to deal with it were heavily regulated while foreign corporations just rolled over them, paying fines as they had to, dodging taxes through whichever loopholes they could find.
Globalisation is neither positive nor negative in and of itself. It is how we deal with trends telegraphing themselves right now that will decide the wealth of our grandchildren.
What needs to change right now?
And more importantly:
How can we change?