Last week was Davos week, the time of year when 2,900 movers and shakers (only 17% of whom are women, incidentally) congregate in a small town in Switzerland to talk the talk. It also means that it’s the week in which Facebook issues its annual Bullshit Report, claiming that it is not only a Force for Good but also one of the world’s economic powerhouses. In 2012 the report claimed that Facebook – an outfit which then had a global workforce of about 3,000 – had indirectly helped create 232,000 jobs in Europe in 2011 and “enabled” more than $32bn in revenues.
Now, two years on, Facebook has more than 1.3 billion users, and its claims have become correspondingly more extravagant. This year’s Bullshit Report asserts that in the year ending October 2014 the company’s “global economic impact” amounted to $227bn – which is roughly equal to the gross domestic product of Portugal – and that Facebook accounted directly and indirectly for 4.5m jobs.
These numbers were plucked out of the air by Deloitte, the consulting company regularly employed by Facebook’s fantasy economics division. I use the word fantasy advisedly, having read the disclaimer at the head of Deloitte’s document: “The information contained in the report,” it says, “has been obtained from Facebook Inc and third party sources that are clearly referenced in the appropriate sections of the report. Deloitte has neither sought to corroborate this information nor to review its overall reasonableness. Further, any results from the analysis contained in the report are reliant on the information available at the time of writing the report and should not be relied upon in subsequent periods.”
Quite so. But the fact that Facebook feels obliged to go through this annual exercise is instructive. Could it be, one wonders, a sign of unease among its leadership that the world might one day wake up to the fact that the digital sharecropping and comprehensive surveillance that lies at the heart of the company’s activities are not necessarily socially beneficial? In which case, would it not make sense to get its retaliation in first, as Willie John McBride famously recommended when he was captain of the British Lions rugby team?
If that is indeed what lies behind Facebook’s economic posturing, then one should at least give Mark Zuckerberg and his colleagues some marks for perceptiveness. Up to now, the internet and technology giants have had an astonishingly easy ride on the back of a narrative that portrays them as innovative, user-friendly, unstuffy (all those jeans and hoodies), disruptive (in a good way, of course) and ethical (“don’t be evil” etc) – not a bit like oil companies, telecoms firms, mining, banking and other nasty, old-style capitalist enterprises, which destroy the environment and grind the faces of the poor. In the process they have successfully diverted public attention from the fact that they are, in fact, just the latest version of the large capitalist enterprise: John D Rockefeller 3.0, as it were.
This uplifting narrative has been dented a bit by the Snowden revelations about the extent of corporate as well as state surveillance, by the extent of tax avoidance by the technology companies and by growing unease about the dominance of US firms in the internet space. So it was interesting to see that the mood music at Davos this year is less favourable to the tech industry than it used to be. “Large technology companies,” reported Gillian Tett of the Financial Times in a dispatch from the Swiss resort, “will experience the same collapse in reputation as banks have endured in recent years unless they rapidly change their approach, say business leaders.”
In particular, the tech industry’s implacable hostility to government regulation is beginning to grate even on the Davos crowd. “Self-regulation, no matter what you do, is just not going to be good enough,” said Paul Achleitner, chairman of the supervisory board of Deutsche Bank, told company leaders, before going on to point out that the self-regulatory role previously favoured by the banks had failed to quell a political backlash against their overreach. “Never assume that because something has been common practice in the past it will not be judged harshly in the future,” he said. Just as bankers had been astonished by the speed with which political attitudes towards them had changed during the 20th-century banking revolution, technology companies might have the same surprise in store in the 21st century.
Herr Achleitner is right. There will, eventually, be a backlash. And when it comes, it will take more than Facebook’s fantasy economics to quell it.