Silicon Valley has invested billions of dollars in the digital economy and the resulting innovation has sparked ethical and legal questions without clear answers. Although venture capitalist Peter Thiel once seriously explored the prospect of seasteading — effectively, creating a floating libertarian utopia that would circumvent economic controls — many tech executives remain open to reasonable and clear regulation.
Given the financial stakes, imagine the horror felt in C-suites across the nation back in April, when executives watched the live feed of Mark Zuckerberg’s testimony and slowly began to realize that many powerful politicians fundamentally misunderstand the way that technology works. Most notably, 84-year-old Senator Orrin Hatch asked, “How do you sustain a business model in which users don’t pay for your service?” Zuckerberg blinked, perhaps in shock, before responding, “Senator, we run ads.” A smirk briefly appeared on his face.
An edited video titled “Zuckerberg explains the Internet to Congress” went viral. CNN ran with the headline “How the Senate’s tech illiteracy saved Mark Zuckerberg.” DMN mentioned the issue as one of its key takeaways from the hearings.
Motivations vary in Silicon Valley. It’s not unusual for technologists to harbor idealistic notions about changing the world. There is also a widespread desire among VCs to discover the next “unicorn” and swiftly monetize its magic. Intelligently-crafted regulation would allow progress to be made and profits to be reaped, but there is declining faith that lawmakers in D.C. are up to the task.
To be clear, restrictions of any type will slow things down. But that isn’t necessarily a bad thing. Maximum speed should not be your chief concern if you are going at 200mph toward a cliff. To the contrary, moderation is essential to survival.
Of course, this view disagrees with the creed by which Zuckerberg founded and grew Facebook. “Move fast and break things,” the now-billionaire CEO told his underlings as his social network spread across the planet. Zuckerberg has since revised that philosophy to add on emphasis on stable infrastructure.
GDPR is one attempt at applying the brakes on irresponsible tech industry practices. The EU law allows users to better understand the data being collected on them and requires prompt notification of data breaches, in addition to other protections. GDPR and the Facebook-Cambridge Analytica scandal have prompted digital companies to update and clarify their privacy policies and to reconsider their own practices. Reactions to GDPR have been mixed.
Silicon Valley is worried because extensive regulations could interfere with investments and over-complicate operations. Massive amounts of capital are being poured into untested technological ideas with nascent regulations. For instance, the total aggregate market cap of all crypto-assets has now reached $ 800 billion, according to PitchBook’s 2018 Venture Capital Outlook. Wall Street Journal analysis revealed that the venture landscape is also being altered by
Chinese money. “Asian investors directed nearly as much money into startups last year as American investors did — 40% of the record $ 154 billion in global venture financing versus 44%,” the Journal found. Suffice it to say, innovators everywhere have a lot of skin in the game.
But so too does the public. Data breaches impact real lives, and citizens also need to brace themselves for the destabilizing economic impact of AI, which could be aggravated by regulatory recklessness or ignorance.
Technology is poised to fundamentally change the global economy, with or without the influence of government. Political change will not be incidental; it is built into the architecture of current innovation. Some of the latest disruptive technologies are explicitly designed to automate entire job sectors, upend the monetary system, strengthen mass surveillance, replace soldiers with robots, and harvest personal data for commercial and political purposes.
The implications here are daunting enough, but this list leaves out dozens of other politically significant initiatives. Consider these life-changing (or ending) ripple effects, and then think about the fact that Facebook failed to match the public’s expectations when it came to app permissions, a relatively benign issue given this widened context.
Some politicians feel that tech companies aren’t being held accountable. British Conservative MEP Syed Kamall complained that Mark Zuckerberg’s evasiveness during the recent European Parliament hearings amounted to a “get-out-of-jail-free card” and said that regulators are now left trying to “cure a disease without knowing what the illness is.” To some extent, this diagnostic failure could also be attributed to lawmakers themselves. Mark Zuckerberg is neither the doctor nor patient in this scenario. He’s the CEO of a for-profit company.