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Michael MacTaggert
Michael MacTaggert

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Angry! Praise Funds that Dump Facebook Over Transparency

Mark Gilbert's article in Bloomberg Opinion is framed as a practical evaluation of Nordea Funds asset manager Sasja Beslik's decision to divest his fund of Facebook shares. Gilbert is probably far more qualified to write something like that than an unemployed software engineer, but the actual article has virtually nothing to do with the decision. Instead, it is a screed trying to justify the indefensible: profiteering off of Facebook's unethical lack of transparency and disregard for users rights that lead to scandals including Cambridge-Analytica.

If Gilbert sees divesting Facebook as an "unjustifiable overreaction," he's probably rolling his eyes at that description of his piece. You shouldn't. Facebook's 2014 policies, lax to the point of insanity, exposed millions of non-consenting people’s data to third parties, of which Cambridge-Analytica is but one. This company’s short history is riddled with similar scandals. Although it is habitually apologetic, Facebook has shown no indication of company-wide change that is anything more than a minimum response to the scrutiny or begrudgingly implementing new regulations like the GPDR. The grain of truth in Gilbert’s article grows around the fact that those responses came to government scrutiny and government regulation. It’s clear that the industry will at least take steps after that attention, though it’s also evident that Facebook will drag its feet all that way.

Then Gilbert proceeds to completely disregard the fundamental thing companies do respond to: Money. When he does mention it, it’s to say that Beslik’s 3.6 million Euros is not enough to make a dent in Facebook’s 580,000 million US Dollars. We’re supposed to believe that a fund divesting itself of Facebook because of ethical concerns and lack of transparency is insignificant because the money it pulled out was a drop in a sea? The article actively discourages others from following suit even though more funds pulling out has a cumulative effect. And why? Because Gilbert doesn’t think the ethical hazards of mishandling data compare to the ethical hazards of destroying the Earth? Extraordinary.

First of all, Facebook didn’t have to threaten the end of life on Earth to make itself a deadly serious issue, and it has a vested interest in changing human social moors about acceptable levels of privacy. That position warrants extra scrutiny before giving them cash, not a wanton blind eye. It was very disappointing to read an analysis of trading Facebook that parroted the company’s actual propaganda, such as Facebook “connecting people” or creating its fictional “global community.” Facebook has done no such thing. Outside connects people. Socializing with new people on the Internet connects people. Facebook records the results of that, takes credit for it, then sells personal information gathered via increasingly predatory surveillance to its actual customers. The very idea that Facebook offsets that by providing “genuine benefits” is specious at best, considering our increased feelings of sadness and dissatisfaction, and the reorganization of our entire concept of social group networking into something much less personal.

Facebook’s measurable negative externalities include diminishing our sense of privacy, aiding genocide, and harming our mental health. These may not be equivalent to an extinction event, but they are other issues that impact the experience of humankind, which is an acceptable scale to be de facto concerned about. Instead of engaging in such radical whataboutism as “it’s fine as long as we’re not investing in killing us all,” we can address problems of global import on their own merits and seek meaningful betterment of the human condition. In that spirit, we’ll also need to confront that Facebook’s attention business model is fundamentally linked to those externalities, which is an omnipresent incentive to ignore their effects on two billion people worldwide in pursuit of the profit investors crave.

If the business model Facebook designed for itself makes itself an adversary to the human race’s well-being, then why should we demonize an asset manager for exercising whatever power he has to incentivise Facebook to improve? Why aren’t we shouting praise from the rooftops, calling on other money-people in the private sector to do the same while the slow government sanctions come through? Isn’t that the kind of self-regulatory pressure Facebook is after when it advocates against the government controls?

It is immediately significant that the ethical hazard of being financially involved in Facebook convinced an asset manager motivated by profit to divest. More than that, it is an extremely positive sign, even if it’s in isolation right now. Gilbert calls this “mission creep” and accuses Beslik of trying to be a “moral arbiter.” I call it a consumer casting a vote with his wallet, a money-person finally comprehending the correctional power he can hold over a mega-corporation’s irresponsible leadership. This isn’t forcing other people to not buy Facebook, as an arbiter might. It is simply deciding not to play Facebook’s irresponsible game, and focusing on the plenty of other opportunities out there to make money with more scrupulous, transparent organizations.

Beslik’s own commentary on this move is understandably less couched in emotion than my thoughts. To him, this is pragmatically acknowledging that you can’t properly assess risks from Facebook’s significant ethical hazards when they are so opaque about their business. To me, if Facebook won’t listen to the innocent people it puts at risk with its services and it won’t be upfront with the government regulators, then investors who try making them listen by withholding funds are actual heroes.

Top comments (2)

qm3ster profile image
Mihail Malo

Unless your investing is truly disposable to you, I don't think moral concerns about externalities are a priority.
Fortunately, mass disappointment in FB actually affects their stock, adding financial incentives to pull out.

adamthewizard profile image

This was a great read! Thanks for sharing your views, Mike. I agree 100% with all of that ✌🏻😀