It used to be that banks made a big show of trustworthiness and stability. They would build classical edifices of stone to signify their solidity, and use names like "trust", "fidelity", "savings", "citadel", etc. This dates back to the 1800's, when there was no regulation, and banks could collapse from one day to the next, taking all their depositor's money with them. We got a brief taste of that in the recent banking / credit crises- the savings and loan debacle, and the 2008 subprime catastrophe. But generally, banks these days are rather boring from a depositor perspective, more concerned about appearing friendly and neighborly than awesomely immovable. Deposit insurance and other regulations have removed virtually all the risk of retail banking, and computers have simplified and automated its accounting mechanics. On the other hand, bigger investors (and borrowers) would have been wise to pay more attention to the trustworthiness of such institutions and their products through the subprime, securitization, and housing bubble periods, when so many were sold a bill of goods.
In this new computerized world, our faith turns out to be more at risk elsewhere, among the custodians not so much of our money, but of our selves in all exposed dimensions - messages, emails, pictures, documents, conversations, backups - our data. Our financial data is still of highest concern, but now that communications have migrated to myriad "platforms", we have so much more to worry about. What used to be securely private is now much less so. Electronic communication used to be confined to ATT, which came under significant regulation. Now it is a wild west of whoever can convince us to try a new service sure to enhance our lives or reputations, and all for free. Google led the way with incredible search capabilities, followed by Amazon, Myspace, Facebook, Paypal, Twitter, iTunes, Instagram, Roku, Pinterest, Linkedin, Netflix, Reddit, and countless other purveyors and services. Every one requires an account, with lock and key, every one collects our data, and most monetize it for ads, spam, and who knows what else.
Do they merit our faith? This becomes an increasingly urgent question as more of our lives migrate to digital form, and the companies we deal with gain increasing power by virtue of their custody over those forms. Are they responsible fiduciaries? Facebook and Google offer an instructive contrast. Google lives mostly by search, and while using ads, has carefully kept the search space clean enough to facilitate use. Its YouTube subsidiary is perhaps its most social media-y, pushing suggestions drawn from the user's viewing history. Since stochastically, this will ramify outwards into new areas, it can facilitate those looking for more extreme content to head in that direction. But different companies clearly carry different ecosystems and ideas of where to draw the line.
Facebook has been notorious for its obscure, ever-shifting intefaces, its constant foisting of new content and tools, and its devil-take-the-hindmost attitude to user data and privacy. Everything is open, except its own operations. All data is ripe for pushing to advertisers, and whatever it takes to get more clicks goes. Where Google remains dominant and comfortable in its search sphere and ancillary businesses, Facebook had made a scientific project of developing the most addictive tools to get people uncomfortable in their social networks, forced to like and be liked in an endless and downward hedonic treadmill. As an introvert, I am largely unaffected, but others seem to be hopelessly ensnared in the depressing exercise of social comparison.
Then there is the fake news. The new platforms act as publishers with vast powers of propagation, to viral degress unheard of in past ages of humdrum paper publishing. But at the same time they eschew the responsibility of publishers to vet media they purvey and provide a gatekeeping function that has been a critical, if unacknowledged heart of the rights of the free press. We have yet to get used to this world where power and reach are unconnected with curated cogency and minimal economic marketability.
Reputation is coming to the fore, as it once did for banks. Apple is making a great deal of its security and login operations, that they as a philosophy and business do not sell user data, being in the hardware business instead. Facebook has taken a big reputational hit through its bad behavior, particularly its release of data to the Republican-affiliated trolls in England, but also for its many other practices and attitudes. Governance is another issue. Facebook is extremely unusual in its monarchical shareholder model, where the founder has all the voting power, and the public none. How was this allowed as a "public" company?
Regulation is needed, on many levels. That has been the time-tested way to address market failures in the face of new technologies and market practices. Reputation alone is a poor way to police companies that have grown too big for many, if not most people, to do without. Antitrust, corporate governance, user data protection and use restrictions, transparency of data custody, and responsible free speech curation are all areas that need work. We should have a government that is willing to do that work, instead of one that lurches from one tweet to the next.
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