A Facebook Full of Dollars

As Mark Zuckerberg demonstrates that he has $19bn dollars for Whatsapp – an application that appears to rival only part of his stock market-floated business the question that must be asked is: where, why and how has Mark Zuckerberg got all this money, power and interest from?

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Before I begin I must let you know that I am not a fan of Facebook, Mark Zuckerberg or the general silicon valley and associated companies etc. such as those in ‘silicon roundabout’ in Old Street in London.

Almost exactly a year ago Mark Zuckerberg was reported by theinquirer.net to be the ‘most popular CEO’ of company employees, beating his ‘rivals’ at Google, Apple and Oracle (which I’ve never heard of).

The easiest comment to make about this statement is that it is reminiscent of the kind of popularity figures that you would have seen in pre-2003 Iraq or current day Belarus. This arguably does more to question the whole culture and practices of the company. Including whether Mr Zuckerberg in fact fires and ‘de-friends’ all those he doesn’t like. It also raises the question of whether Facebook is, as Apple has been accused of being, concerned more with its own mystique, public relations, presentation and the promotion of a single personality – much the way Steve Jobs and before him Bill Gates were.

 

However, the more interesting questions are who exactly are Facebook’s employees, and from where and how does the company – or, as it is usually reported, simply Mark Zuckerberg – get its money, power and publicity?

The first question is who are the employees of face book? Officially, and the basis of the Inquirer.net statistics, Facebook’s employees are those with whom Facebook plc. has entered into explicit contracts. (I am using here Facebook plc. to signify the company and Facebook for the web portal or product). In a simplified, possibly Marxist interpretation it is those who have entered into an explicit agreement with Facebook to sell their time and physical and intellectual labour in exchange for tokens of value – in this case an amount of dollars. In a more market orientated sense, it is who Facebook plc. as a company has on its payroll in order to make possible all its company goals to be achieved.

However, I would propose that Facebook plc. has, in fact, as many if not more employees as it has users. This is fundamentally because Facebook plc.’s value as a company and its profits are linked to how much activity occurs on Facebook. Who the Inquirer.net terms the ‘employees’ of Facebook I would argue are the support staff who enable activity on Facebook to continue. Those who maintain the software, updates and all the rest of the infrastructure.

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As part of this conception it must be first noted that Facebook is often described as a service however some have also questioned, as I will go on to do, whether it actually has surpassed this ‘modernist‘ conception of what can be sold and is actually something different.

To reduce some of the arguments to their basic points, it is argued that Facebook plc. presents itself as a service provider to its users to be used to create an alternative identity for a society created on the internet. This alternative identity thereby becomes a second, and maybe in some arguments primary, identity but which is related to, or symbiotic to, the physical identity they have in society. However Facebook plc’s actual product is the information it garners from its users, which it sells to whomever is interested in buying it – primarily, it is usually suggested, advertisers.

However, it could be argued that this, is a simplistic view that misses some key factors in the relationship Facebook has to its users.

If we accept that the basic relationship between employer and employee, or capitalist and worker, is that the employee rents or sells the employer his saleable quality of labour, and that the employer pays that employee a price for this labour that allows for the product of the employee’s labour to be sold on by the employer at a profit, then it would appear that this is exactly the relationship that Mark Zuckerberg (as Facebook plc.) has with the users of Facebook. This interpretation is substantiated if we accept that Facebook plc.’s product is data on; personal details, behaviours, trends, social relationships, etc., that is created by the users of Facebook. Therefore the user, not the company, generates all the product. The profit for Facebook is immense, as the employee (or user) int this arrangement is paid only in continued access to the Facebook portal – or, as it were, the privilege of use the factory floor and allowance to continue creating the product.

To rephrase, Facebook plc. is the company and Facebook is the factory floor; the ‘employees’ (as the Inquirer sees them) are the enablers and middle management class, the type that would have only drank in the saloon bar part of public houses in the industrial period; and the ‘user’ of Facebook is the worker.

So, if we accept these labour relations what does this tell us? One of the most easy and simple things to see is that Facebook has commodified human interaction, not in the way done previously by products such as perfumes, condoms and clothes – which have commodified the tools for social interaction – but by commodifying that interaction itself.

So how does this change labour relations from the traditional ‘employer/employee’ conception to a different model? Apart from the obvious assertion that Facebook plc. has effectively employed millions through paying its employees with the privilege of being allowed to continue to labour, and utilise the factory floor it also has created a significant change in the power of the worker as a collective and as an individual.

Throughout the history of labour relations one constant is in some form or another present: that the employer will attempt to extract maximum yield from each worker and that the worker, as an individual or as a mass, will attempt to extract maximum value or payment for their labour. In this relationship there has always been a tension between coercion and free will. For example, the worker in the factory had the choice not to work for the employer if he so wished, though exercising this choice would usually lead to destitution and poverty for himself and his family). The basic relationship of the worker to his work was that he was selling his ability but that he always had the free will to exercise (or not) that ability: a panel beater wouldn’t use his time and strength beating panels except when he was employed to do so. Facebook plc. however has used Facebook to blur or even arguably destroy the ability of the worker to have, recognise or exercise this free choice.

By commodifying social interaction, Facebook plc. has made the workers’ private lives the product. The worker therefore now no longer has a distinction between his private and working lives. The activity that he must undertake to maintain his social presence is now also the product he generates for his employer.

Because the employee’s labour is undertaken without the need for any enticement such as a promise of recompense, Facebook plc. has therefore been able to bypass any form of contract or employee relations. All it has to do is convince the employee that the best place to carry out their labour is in its factory floor – Facebook.

Of course, it could be argued that this is an over-analysis of the relationship between Facebook and its users and that everyone has the free will to delete their Facebook account and therefore the relationship with Facebook plc. However, I would argue that this is an apologist criticism as of course everyone has the free will to leave Facebook, just as everyone has the free will to stop living in their brick-built homes and return to living in caves, or remaining in society and cutting off all social interactions. In the middle of the ‘information age’ or ‘information revolution’ I would argue that the idea that a person can withdraw from his digital identity is equivalent to arguing that a person could withdraw from crop rotation during the agricultural revolution, or could continue to keep up a cottage industry of cotton production during the industrial revolution.

The relationship in essence between employer and employee in the Facebook model has moved from one in which the employer employs the employee to one where the employer controls the environment in which the employee lives and interacts. Where in the old model the employee was able to sell his sell his labour to an employer Facebook plc.’s model rather has created a new factory floor in form of a new realm of society and social interaction. This factory floor commodifies all the activityof the new society including all interpersonal and social interaction which are then sold off, with the worker becoming more akin to a worker ant whose ability to control their own privacy, labour and the value of that labour has been undermined and subverted to the need for profit of Facebook plc.

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The second question is how has Mark Zuckerberg, or Facebook plc.’s product become worth so much money that he is able to pay $19bn for another seemingly intangible entity?

The essence, as Mark Zuckerberg or Facebook plc. would see it, is that they have a product that can continually generate revenue and value to all its customers. In actuality, Facebook plc. produces no identifiable tangible product. It does not produce a perishable product like a Mars bar, or a more substantial product like a sofa or kitchen knife. Facebook plc. would however argue that it produces information that its consumers can use to generate revenue and therefore that their product is worth paying a premium for.

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However, what is this product and from where does it derive?

There are no tangible products produced by Facebook plc., except perhaps a few adjustable baseball caps, pin badges, T-shirts or hoodies. Despite this, Facebook plc. is able to continue generating ever-increasing income and interest in its ongoing business ventures – especially those where Mark Zuckerberg can be personally referenced or accredited for something.

The common conception is that the continual references to Mark Zuckerberg are him personally taking publicity and kudos from his company’s (and some would argue someone else’s idea’s) success. The real relationship however is more likely to be the converse: that Mark Zuckerberg’s appearances and focus on his personal presence is actually a function of the propaganda of Facebook plc.

Facebook plc. does not sell a body of scientifically researched information, as say a journal would, and although there are likely a great deal of people studying the investments and returns of anything bought from Facebook plc. who may indicate that the ‘product’ brings a return that financially justifies their outlay, it appears rather that Facebook plc. may in fact be selling something quite different.

As Facebook does not sell a tangible product its value is not testable by sitting on or touching it, but by the more opaque test of whether or not the information and related ‘products’, such as advertising space or product placements; is worth the price that is demanded for it. Therefore, the determination of its value is not the product in itself but its ability – and solely its ability – to generate profit for those who purchase it.

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This I am sure will be contested. However, I would assert that Facebook plc. – and in this instance it is worth stating, given the promotion of him personally, Mark Zuckerberg are selling not a product but (for want of a better word) a particular illusion. In this sense I do not mean an illusion as an appearance of something that is not true, but in the way that the audience of a magician would experience an illusion as something that appears to be true but of which we must make a leap of faith to accept. It is important to state that it is not my contention that Mark Zuckerberg or Facebook plc. are the illusionists in that they know what they are showing is untrue; rather that, for Zuckerberg and Facebook plc., it is not known and is completely unimportant whether their illusion is a true or completely false representation, as long as the purchaser believes that the illusion is true to the extent that they will pay a premium to access it.

That the purchaser pays to access the illusion doesn’t mean the purchaser accesses what I would call ‘truth’, but access another layer of the illusion. The importance here is that the purchaser believes that they are in fact accessing ‘truth’ – in this case the ‘truth’ being the ability to use what Facebook plc. sells them to generate the purchaser profit. The character or nature of the product doesn’t matter, as neither particularly does the quantity or detail. What matters is the ability of the purchaser to use the product to generate profit. Therefore – and this is an important distinction – the purchaser in fact is not buying a product per se, but buying the belief that what Facebook plc. generates through Facebook is truth in the sense that it will afford the purchaser access to profit.

Therefore Facebook plc.’s most important activity is to create the belief that what Facebook generates is ‘truth’ and that Facebook plc. has an exclusive access to that ‘truth’ which they then pass on at a price. Therefore what is all important to Facebook plc. is that the belief that they have an exclusive access to ‘truth’ is maintained. The substance of the ‘product’ only matters in so much as it confirms this image or illusion. Therefore image or illusion rather than substance is all important to Facebook plc., and is seemingly precarious. Being this precarious should theoretically make the product unstable and toxic, and it may be wondered why Facebook plc. is able to generate so much interest and profit for itself that it is able to spend $19bn on Whatsapp. It is precisely because of the intangibility and reliance of belief that causes Facebook plc. to be so profitable and desirable. If no-one understands or can conceptualise what Facebook generates or Facebook plc. sells, but believes in the exclusivity of Facebook plc.’s exclusive access to ‘truth’, it is more likely that Facebook plc. will be able to massage their illusion in order to generate ever higher prices and therefore profits. This then generates ever higher illusions (and belief in the illusion) that Facebook plc. has an exclusive access to ‘truth’, meaning ever higher valuations of its product and consequently ever higher profits and for Facebook plc. and Mark Zuckerberg himself.

So Facebook plc. bases its profitability and financial clout – and, in the particular structure of the current world economic system, its power – on its ability to maintain a belief in others (whether it believes it itself or not) that it has exclusive access to ‘truth’ and is able to sell a product of value to its customer. Due to the very intangibility and mystique surrounding its product and the belief that it has access to ‘truth’, Facebook plc. is able to generate inexhaustible profit for itself as, unlike a sofa or Mars bar which have a finite value, truth in whatever form has an inexhaustible value, especially if it is believed to be ouroborotic or infinite. As Facebook plc.’s product is based on belief and not tangibility it is not possible for the consumer (the purchaser of its product) to determine whether or not the product is valuable outside this belief, which is determined by the general market belief in the product. This is the phenomenon of confidence and at present there is a confidence in Facebook plc.’s product, just as there was in ENRON or the infallibility of financial institutions prior to 2007.

So confidence in the exclusive access of Facebook plc.’s product to the ‘truth’ is based on an image of infallibility in Facebook plc.’s ongoing ability to maintain that exclusive access. Image and confidence therefore are the trading materials of Facebook plc. All power and profit is based on this and the product of Facebook plc. is based solely on this belief. It therefore makes sense that Facebook plc. trades much more easily on the image that Mark Zuckerberg as a person in fact has exclusive access to the truth than does Facebook plc. the structure or organisation. As it is about image and illusion, is it not easier to believe that a person, especially a ‘normal Joe’ wearing ‘sneakers’ and ‘hoodie’, may be genuine and honest in his allowing others to know he has exclusive access to ‘truth’ than a corporation interested only in profit? A person is of course an emotional and complex entity less able or likely to deceive or display sociopathic tendencies than a corporation, which is necessarily organised on the line of structures without consideration for human qualities. I am not asserting that the image of Mark Zuckerberg is the most important element in the profitability to Facebook plc., but it is as important an element and one of many integral elements to the image and therefore profitability to Facebook plc. It is likely that this is also is a facet of a convenient coming-together of the ego of Mark Zuckerberg and the utility of his image as the image of Facebook and Facebook plc.

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Mark Zuckerberg and the corporation Facebook plc. are therefore an epitomal exemplar of information age postmodern capitalism. Zuckerberg and Facebook plc. have redefined labour relations in a way that disempowers workers’ self-determination and turns a new realm of social interaction into a factory floor in which the product is in itself the data recording of social interaction created by the worker for no other reward than the continued privilege of being able to labour on a factory floor now almost essential to the worker’s social identity and social survival. They have created a product out of social interaction which has been sold off as an access to make profit out of the labourer who produced the product in the first instance. In addition to this Facebook plc. has created an ability to make profitable the sale of a product, in this case data, based on an illusion that Facebook plc. has an access to a narrative of ‘truth’, ‘truth’ in this sense being an exclusive access to an aspect that can be used by others to generate profit.

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It is therefore not surprising that Facebook plc. or Mark Zuckerberg are able to generate such high profits and powers from a product that appears so alluring and yet is so undefinable and intangible and that also has been able to revolutionise labour relations almost irreversibly in favour of the employer, stripping all value out of the labour of the worker from the worker’s perspective, while maximising value from the employer’s perspective.

To return to the original question of this blog: Where, why and how has Mark Zuckerberg got all the money, power and interest from? – he and Facebook plc. have derived this from a complete reshaping of the capitalist model of labour relations and the ability to make profit. Mark Zuckerberg and Facebook plc. have created an environment in which workers give of their labour for the payment of the continued access to the factory floor and ability to continue to labour. They have managed to extract profit, and significant profit, from generating a belief in the purchaser that its product it holds an exclusive and otherwise inaccessible ‘truth’ which will allow them to generate profit for the purchasers, extractable from in part or in totality from the labourer or user of Facebook. As expressed in in the film Layer Cake, “the art of good business is being a good middle man”, and can it be said that anyone in the postmodern era has ever been able to extract so much profit from his consumers whilst paying so little wages to his labourers than Mark Zuckerberg?