Regulation and Politics

Regulation and Politics: Weaponized Analytics Makes Regulation Relevant Again
Ralph Hughes writes about regulation and politics.
Mark Turnbull, managing director of Cambridge Analytica wrote: “The two fundamental human drivers…are hopes and fears, and many of those are unspoken and even unconscious…. Our job is…to understand…those deep-seated underlying fears concerns.   There’s no good to fighting an election campaign on the facts because it’s actually all about emotions.”
Regulation and politics is on people’s minds. Once the New York Times reported that Facebook had failed in its months-long effort to regain control of its subscriber data from politically weaponized

influence firms such as Cambridge Analytica, Mark Zuckerberg felt forced to speak to the press.  That rare interview with 35-year-old who controls the world’s most powerful platform for interconnecting—and infuriating—people revealed how little control his organization actually wanted to exert during the past decade over the personal information of billions of people.  His conversation with CNN contained what may prove to be a watershed moment in the history of the electronic economy: “I actually am not sure we shouldn’t be regulated…. I think the question is more, what is the right regulation…?”
This statement pivots dramatically from the incessant warnings by Silicon Valley billionaires that any government regulation would stifle innovation and debilitate the last industry where the U.S. still manages to dominate globally.   Most notably, Facebook lobbyists this year effectively hobbled the Honest Ads Act, a bipartisan bill requiring online political ads to adhere to the same disclosure and disclaimer rules as ads in print or on TV.  Suddenly, though, with the heat of public scrutiny bearing down upon them, the calculus has changed. Even before this week’s revelations, Facebook’s growth rates was slowing noticeably and the average time in-app by users falling.  If the additional bad press convinces the public that Facebook is a tool for those who should not be trusted with our personal information, the public will turn to other online platforms. Ad revenue could free-fall as the value of the user community rapidly loses value to users themselves.
Zuckerberg’s admission underscores a realization made by U.S. chemical industries, airlines, big pharma, and even the television networks many years ago: without some regulation, industries get cavalier and lose the public’s trust, undermining future growth in revenues.  Despite how loudly corporations—and the politicians they sponsor —complain about regulation, they know that regulation is the stockholder’s friend.  Modern industry, with its far-flung supply chains and potential for enormous public harm is too vulnerable to the chaos a truly free market can generate.  Such realizations give rise to the profound question that rarely gets the hearing it deserves: if corporations are to rely upon government regulation in order to protect consumer confidence, shouldn’t regulation go even farther and protect consumer interests as well?  The government is elected by the citizenry after all and not by corporations, right?
America has been down this road many times in the past, most notably 100 years ago during the Progressive Era.  Instability in oil and agriculture lead to anti-trust acts and the breakups of unsustainable monopolies.  Tragedies in among hundreds of consumers set off by the meat packers and patent medicines led to the Pure Food and Drug Act.  Waves of national shame and outrage over living conditions and injuries yielded the first honest attempts at child labor laws, workplace safety code, and—finally, after 70 long years—women’s suffrage.
As our society teeters into the 21^st century, left unguided by the excessive free-market rhetoric used over the past forty years to beat back sensible regulation, we would do well to reflect upon the Progressive Era.  Those activists battled oligarchs, corrupt politicians, and bad journalism just as we do today, yet they found the means to deeply reform society on a breathtakingly wide scale.  Because our times so closely parallel the challenges activists in the early 20^th century confronted, Colorado Free University’s “Unrig the System” class on overcoming unrestrained wealth and power dedicates a good portion of its course time to reviewing the context and achievements of the Progressive Era.  Preeminent among our goals for each session is to gather the background needed to ask the inescapable question thrust upon us as companies such as Facebook and Cambridge Analytica make hash of our democracy—how much regulation would be enough?
Ralph Hughes

This class is not currently offered at CFU
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