Everyone agrees that the Facebook IPO was a mess. Whether it was mismanaged by the underwriter or by the cool young executives who run the company, something went wrong.
At the least, Facebook has lost a lot of face.
To be fair, if Facebook stock is selling at $3000 two years from now no one will remember the selloff that followed the initial offering.
By now most pundits have been trying to explain what it all means. After they finish bemoaning, thinkers like to contextualize. They like to see events as harbingers, so they begin by putting the event in context.
Many wise heads believe that the mania over the Facebook IPO is a distraction. Investors focused on Facebook because they did not want to look at the action of the rest of their stocks. This year, May was the cruelest month.
As the markets cascaded down everyone was pondering the deeper meaning of Facebook.
More savvy investors looked at the action and decided that the contagion would be limited to Europe. Others fell into a slothful complacency because they trusted that the Federal Reserve will, like the cavalry, soon ride to the rescue.
Given that Facebook has lost face, many pundits are speaking ill of it. Unjustly, in my view. Facebook is a new tool for marketers and advertisers. It’s almost like your own personalized newsmagazine, mixing national news with the latest from those nearest and dearest to you.
It seems to be drawing young people away from television, causing television ratings to crater.
If young people prefer Facebook to American Idol, then advertisers and marketers will follow them. If Facebook does not figure out how best to profit from its gargantuan membership base, then someone else will.
There is nothing wrong with this. It’s how business is done.
For all of the pundits who now disparage Facebook many others have naively believed that Facebook would change the world.
Facebook and Twitter do disseminate ideas around the world. They overcome government censors and allow dissidents to communicate and to organize. Because they contributed to the overthrow of governments, that does not mean that they instigated the change.
Those who believed it, our modern-day Candides, were camped out in Tahrir Square a year or so ago, proclaiming that the Revolution had arrived in Egypt on the backs of Facebook and Twitter.
How’s that all working out today?
Mark Steyn brings us up to date this morning. Flexing his rhetorical muscles, he writes:
Indeed, for a "social media revolution," the principal beneficiaries seem to be remarkably antisocial: liberated from the grip of Mubarak, the new Egypt is a land where the Israeli Embassy gets attacked and ransacked, Christians get killed and their churches burned to the ground, female reporters for the Western media are sexually assaulted in broad daylight, and for the rest of the gals a woman's place is in the clitoridectomy clinic. In the course of the election campaign, the Muslim Brotherhood has cast off the veil of modernity and moderation that so beguiled the U.S. State Department and the New York Times: Khairat el-Shater, the deputy leader, now says that "the Quran is our Constitution" and that Mubarak-era laws permitting, for example, women to seek divorce should be revised. As the TV cleric Safwat Hegazy told thousands of supporters at a Brotherhood rally in the Nile Delta, "We are seeing the dream of the Islamic Caliphate coming true."
The new ideas communicated by social media have not had quite as salutary effect as certain New York Times columnists had believed.
In Steyn’s words:
The question for the wider world is what do "social media" represent? If they supposedly embody the forces of progress and modernity, then they've just taken an electoral pounding from guys who haven't had a new idea since the seventh century.
I daresay, Steyn has a decidedly dismissive attitude toward Facebook. He sees it as yet another of a group of “amiable diversions for pampered Westerners….”
Perhaps I am less hip than Steyn, but didn’t people said the same thing about television sit-coms and docudramas? A free and open media will have both good and bad diversions. Some will be entertaining and some will be informative.
Of course, the mere existence of Facebook does not ensure the transition to modernity.Facebook and Twitter are not, Steyn correctly notes: “an irresistible force of modernity.”
Unless you still believe that the medium is the message, you will recognize that however much Facebook appears to be an “amiable diversion” it does make possible the communication of new ideas to a segment of the population that had never been exposed to them. It might not be a game changer, but it is surely a good thing.
There is no rule that says that great ideas have to be communicated through ponderous philosophical tomes or brilliant newspaper columns or even witty blog posts.
I do not see why Steyn feels that Facebook and Twitter cannot communicate great ideas.
Allow me to present his point of view:
Don't get me wrong; I like goofy pet photos. But can these gizmos do anything else? Yes, in theory. But, in practice, is a culture that "revolves on itself without repose" likely to be that effective at communicating real ideas to the wider world? Ideas on liberty, free speech, property rights, women's rights and all the other things conspicuous by their absence in the philosophies of Egypt's new political class. In the end, a revolution cannot be Tweeted. Whatever their defects, the unlovely forces running the new Egypt understand the difference between actually mutilating a young girl's genitals to deny her the possibility of sexual pleasure, and merely "following" your local clitoridectomist on his Twitter feed.
To enlarge the context, we need to mention that some 40% of the people of Egypt are illiterate. The limits of social media in Egypt are the limits of all print publications. If the general population does not know how to read, even the dead-tree media will be at a loss to promote change.
The illiterate citizenry of Egypt is frightened of modernity and threatened by modern ideas. The distance between where they are and where they should be seems too large to bridge. They cannot imagine themselves living differently. They see the grand successes of modernity and they want to run and hide.
It’s not a lack of knowledge that is holding back Egypt. It’s a visceral hatred of anything that would require them to change.
Next, Steyn criticizes the Bush administration’s “war on terror” for emphasizing symptoms and not values and ideas. He believes that America should be attacking Islamist ideology. Since we have not done so, it retains its dominance.
One of the basic defects of the Bush administration's designation of a "war on terror" was that it emphasized symptoms (bombs and bombers) over causes (the underlying ideology). In the war of ideas, the West has chosen not to compete, under the erroneous assumption that the ever more refined delivery systems for its sensual distractions are a Big Idea in and of themselves. They're not. If you know your Tocqueville, they sound awfully like his prediction of a world in which "an innumerable crowd of like and equal men ...revolve on themselves without repose," a phrase which nicely distills the unending busyness of our gaudy novelties.
These lines are slightly ambiguous. On the one hand Steyn is right; on the other, I am not sure what he means.
One might say that the Bush administration promoted a freedom agenda. It wanted to bring democracy and democratic institutions to Iraq and Afghanistan.
It doesn’t feel quite right to say that the Bush administration ignored the need to change local political cultures.
Naturally, we all want to win the war against bad ideas. We want to spread our superior ideas far and wide.
And yet, we also need to recognize that ideas are not like fairy dust. You cannot just spread them around and wait for them to magically modernize a reactionary culture.
It’s not sufficient for people to be exposed to new ideas. They need to practice those ideas in their everyday lives. Freedom is a great idea, but there is much more to practicing it than voting in an election.
Many people believe in freedom and democracy. Every few years they go out and spend a minute and a couple of minutes voting in an election or two.
In and of itself, this activity does not produce modernity. We have seen this more times than we would care to remember.
Besides, some of the most modern economies do not have free elections and do not allow free expression.
Believing in freedom is not enough. People need to practice freedom on a daily basis. They need to develop the habit of making free choices and decisions. If they do, they will be less concerned about whether or not they have the right to vote.
How best to institute the practice of freedom? One might start with free market economic reforms.
The greatest free market reformer of the twentieth century was Deng Xiaoping. He instituted a free enterprise system without filling the airways with Western ideas.
In the Middle East free enterprise is more the exception than the rule.
If Arabs despise the single most prosperous and modern nation in the region, how can anyone expect that they will do anything but retain their reactionary mindset.
Rather than compete against Israel, Arab peoples want to destroy Israel. They take Israeli success to be an offense against their faith.
Refusing to emulate the example set by Israel has put many of these nations on the road to economic ruin.
What can we Westerners do about this?
We can start by taking a step that Steyn would certainly want us to take. We should identify the nation that embodies our values in the region and we should support it unstintingly.
And we need to stop showing respect for nations and peoples that do not practice the values we hold dear.
Next, we need to overcome multiculturalism.
American and European leftists hold the Palestinian cause to be sacred. They insist that Israel, rather than being a beacon of modernity, is an oppressive colonial power.
They see Israel as the problem more than the solution.
If you were an Egyptian or a member of Hamas wouldn’t you conclude that you can gain the respect of the best and the brightest in America and Europe by retaining your reactionary ways.
If the Arab Middle East feels that it is earning Western respect by being intransigent then it will continue on the same course. If it feels that it is losing respect, thus, losing face, it might be impelled to change.
By pretending that Egyptians are part of a worldwide Revolution against capitalism and free enterprise, left thinking people have filled Egyptians with false pride and encourage their bad habits.
If that is what Steyn is getting at, I am with him.