Jaron Lanier: Why Facebook Isn’t Free
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Jaron Lanier: Why Facebook Isn’t Free

Right now the advent of better and better
information tools is having a contracting effect, where more and more the economy is
being made efficient in this way that concentrates the wealth of those who make it efficient.
I mean, just think about the day that all those cabbies out there lose their job because
the cars are driving themselves. What are they going to do? I don’t think they’ll be
happy, but whoever does that will become very, very rich. So whoever owns the top server
in a big efficiency-making exercise becomes very, very rich. So there is this huge concentration
even as the overall economy is shrunk as a result. So the valuation of Facebook is just completely
normal given the way information technology is being integrated into this society, and
it’s not the last. This will just keep on happening until we realize that it’s not sustainable.
And there’s nothing wrong with Facebook being treated as valuable. The only problem is that
it should be increasing value for everybody. I’m going to use a different company as an
example, an old less fashionable one, which is Walmart. So, Walmart was one of the pioneers
of using computer networks to make the world efficient for — consumers anyway. Walmart
in the 80s and 90s started to develop its own version of digital networking, especially
in the 90s, to precisely calibrate who to buy from at the best price, where to ship
it exactly, when and how to ship it, and how to stock it and at which store when, I mean
this whole incredible system, and as a result of that it was able to look to offer lower
prices to its customers. And everybody said, “Yay, lower prices!” But the thing is, it
became so big so fast, which is what happens when you do digital networking, that it kind
of took over the world and changed its own environment to make the whole environment
of retailing consumer goods and creating them more efficient in this certain way that impoverished
its own customer base. So all of the sudden its very own customers have fewer job prospects.
All of the sudden its customer base gets poorer, and now it’s kind of dug itself into this
rut, where Walmart is no longer as exciting a retailer as it was because what’s it going
to do? And it’s trying to sort of climb upscale, but it can’t because its customer base can’t
support it. So to me Facebook is essentially Walmart for
a new generation, but Facebook is saying, “Free services, free social networking! Free!
Free!” and everybody is saying “Yay, it’s free!” But then the problem with that is that
the job prospects for the vast majority of people are actually gradually decreasing as
less and less stuff is monetized. So what you want to do to have an information-based
economy and preserve capitalism is to monetize more and more of the world instead of less
and less of the world because you want the market to be growing instead of shrinking.
But the problem with the Facebook approach is it’s monetizing less and less because to
say, “No, all this is free. Your reward for participating is reputation, karma, connections”
— and all those things are very real, but they’re not monetized. They’re not securable.
You can’t get a house mortgage based on your Facebook reputation What I would do is I would turn it into this
commerce platform so that people can send money around for things and then I’d gradually
start to adjust it so people are monetizing more and more, so people can put up their
art to sell to others either with a Kickstarter type of a thing or an app store kind of a
thing. It doesn’t, you know, it would have to be tweaked to find exactly the right model,
but I would start to turn it into real commerce so that people who were good at using Facebook
start to make some money and the economy overall starts to expand instead of contract as a
results of its existence. And I think that’s a happier outcome. It would be better for
Facebook. It would create a better return for Facebook’s investors in the long term
— even in the short term.

57 thoughts on “Jaron Lanier: Why Facebook Isn’t Free

  1. Facebook is definitely not free. We have volunteered more personal information than the CIA could have ever dreamed of.  All for what was thought to be "free". This information is worth serious money.

  2. difference between Facebook and Walmart:
    Facebook is on the Internet | Walmart is not.
    Facebook's Employees: 6,818 | Walmart's Employees: 2.2 million
    Facebook Revenue: $7.87 billion | Walmart Revenue: $476.294 billion (that's 2 more digits after the decimal…)

  3. I thought about this. If we could charge a penny for a like or even set your own price for likes. 

  4. not really surprised to find that some people here are just making fun of his appearance, or trying to pick apart some trivial thing he said without actually critiquing the ideas he's putting across. the first half of the video is just him explaining basic economics… ever greater efficiency and technology will have its winner and its losers. in our case, this will mean more losers and less winners. chances are, many of the youtube genuises here are currently depending on an occupation that will be made redundant in their lifetime. so for your own sakes, either critique his solution or offer a better idea of your own. unfortunately, it will always be way easier to judge and dismiss ideas then to actually understand them

  5. I can understand his comments about Facebook, but what about another free technology, like Youtube? Youtube is free, and yet some of its users have become (somewhat) wealthy throught advertising. The only way I can think of that would be practical for Facebook users to make money would be a similar system, where popular users can opt-in to have ads posted on their wall. That way, both Facebook and the user can make money. Can anyone think of any other ways?

  6. what about the those who make horse shoes? didn't cabbies put them out of business? its called creative destruction. without we would all be in caves. 

  7. Who thinks that #Facebook is really free? Try to convince me below. I can't wait to hear your answers! Watch this and you will think differently about this "free" Facebook platform! #JaronLanier is the CEO of #Tsu where everyone is migrating to NOW! http://www.staged.com/video?v=!5Szpb

  8.  Karl Marx, dude… the development of technology brings an abundance of goods, forcing everybody to give stuff for free, thence the markets crash, and money, banks, states, cease to exist. 
     We are progressing towards a Communist economy, where the basic needs – food, shelter, energy, transportation, health, socialization, etc. are provided free of charge, and only advanced needs – seeing Rihanna's undies in concert, or having a personal gym trainer, or custom painting your car, or drinking a 1961 wine with french refined cuisine, will cost money. 
     That's already happening, every friday night. If you wanna party inside Pacha Disco Ibiza, you have to pay monies. If you can't pay to go to Pacha, there's tons of discos, where you can party with girls just as poor as you are, free of charge. Then you go home crying. But you partied for free!
     Or you could take a look at Valve's Dota 2, where playing is free to play, yet they have something like $3 million prize pools for their championships.

     The grim conclusion is, that the mofos in power now, are forced to delay the development of technology, to maintain their power. 

  9. Facebook is a parasite on humanity…. unto itself it does not exist….. Zuckerberg… the human virus!

  10. It was very hard to overcome my prejudice against how he looks in order to liaten to him. Having done so I don't think it was worth it.

  11. If people are dependent on Facebook posts to pay their mortgages, then there is something wrong with those particular people.

  12. This doesn't make sense in 2015 especially after Facebook just released their 3rd Quarter accounts showing huge increase in revenue. They are monetizing Facebook (much to the delight of Wall Street) as it just can't exist for free. Organic reach on posts has dramatically decreased so you have to pay to reach more people. This is a good thing as you can't have everything for free as it's not sustainable, as Jaron Lanier says.

  13. this guy seriously needs to shave the beard, remove the dreads, lose alot of weight & get better sleep, and he would probably look normal..

  14. Alright, the incompetence in the comments is appalling. (I don't care about how he looks, don't be so shallow. I'd like to discuss the ideas he is talking about). If you didn't understand, let me try to take a stab at summing it up in few words. Walmart tried to be as efficient as it could, reducing costs of paying people, having fewer workers. It seems nice for them in terms of making more profit. But, by doing these things, customers had less money because they were not making money FROM Walmart because WalMart wasn't hiring them or helping customers make some bank. Because customers were not making money, they were not able to , as customers, give WalMart more revenue. Facebook really doesn't need that many employees, and few customers are making money from it. Facebook isn't free because people are not making money when they could be. If someone feels that this understanding is wrong, please reply, I'd like to discuss and learn.

  15. Well, I truly belive the tendency is for jobs to disappear and machines to do all the work. It's silly to try to go the other way arround. The real problem relies on income distribution and social equality.

  16. what's great about this is he's talking about the future of the ERC-20 platform without naming it. Having value on the internet is coming.

  17. i love this guy so much! i always had so many questions about all these things and finally there is someone who answers them!

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