12

The Incomplete Political

Economy of Social Media
S i v a Va i d h y a n a t h a n

In February 2016, the Telecommunication political economy of social media. Issues

Regulatory Authority of India ruled that such as neocolonialism, cultural imperialism,
Facebook’s plan to introduce a free service to competition policy, political corruption, digi-
underprivileged Indians via a partnership tal activism, class struggle, and the ideologi-
with one mobile company and a handful of cal foundations of Silicon Valley work to
commercial application services violated affect how social media function in our lives
network neutrality, the principal that digital across the globe.
services should not favor one source of con- We think we understand social media.
tent over another. So ‘Free Basics,’ as After all, we seem to increasingly live in and
Facebook had re-dubbed its ostensibly phil- through them. The record of social media
anthropic effort ‘Internet.org,’ died quickly and their effects on global society and poli-
in a power struggle among a powerful tics seems well documented. Since the rise
American social media company, resentful of Facebook midway through the first decade
Indian technology developers, overwhelmed of the 21st century, tyrants and tycoons alike
regulators, sensitive nationalistic politicians, have waxed anxiously about its influence
highly organized public interest activists, and over its more than 1.5 billion users. Twitter,
rival mobile service providers. It was a although used by far fewer, has been credited
remarkable tale of ideological hubris on the with outsized influence on politics and cul-
part of Facebook founder and CEO Mark ture. The fall of Myspace, with its youthful
Zuckerberg and the ambitions of Indian citi- exuberance and inflated market capitaliza-
zens and companies, who grew to resent the tion, serves as a cautionary tale about poor
efforts and claims that Facebook made on investments and fleeting communities, and
behalf of poorer Indians (Bhatia, 2016). This stands as the greatest financial blunder in
story demonstrates the vast complexity of the Rupert Murdoch’s long career.
214 The SAGE Handbook of Social Media

But what are we to make of these techno- (Gramsci, Hoare and Nowell-Smith, 1971),
logical tools and their influence on our lives? Adorno (2001), Habermas (1984), or Smythe
How shall we assess the role of regulation (1977). But has this been adequate and
and the need for more? How empowered appropriate? Have we used the best lenses
are these 1.6 billion users? How powerful is to examine a phenomenon as influential
Facebook founder Mark Zuckerberg relative and fast-growing as social media in the 21st
to Rupert Murdoch, among others? And have century? Social media platforms such as
scholars fully grasped the trajectory of ideo- Facebook, Twitter, Instagram, and even the
logically driven technological change that failed Myspace, demonstrate a more complex
almost instantly captured the attention of bil- and perhaps sui generis relationship among
lions across the globe? firm, ‘user’ (as opposed to audience), labor
The study of the political economy of (which can include the ‘user’), and states than
social media in the first two decades of film and radio did in the time of the Frankfurt
the 21st century has been far less dynamic School or television and early computers did
than its subject of study. Scholarship is still during the rise of Critical Political Economy.
framed along the lines outlined by three The categories and assumptions of classic
major schools of media analysis of the 20th political economy are largely based on static
century: Frankfurt-School-inspired criti- categories. The major debates within the field
cal theory (Adorno, 2001; Habermas, 1984; have too often turned inward on theory, mak-
McCarthy, 1978); Marxian-inspired Critical ing them more about the terms of debate than
Political Economy (Golding and Murdock, the consequences of the subject and its exer-
1997; Mosco, 2010); and Cultural Studies, cise of power in the world.
the strongest critical response to the two clas- I will offer one significant recent debate
sic political economy schools (Grossberg, that has occupied political economy schol-
2010; Hall, 1997). The most prolific scholar ars in recent years. In 1977 Smythe shook
of the political economy of social media, up the study of both political economy and
Christian Fuchs (2009, 2012a, 2014a, 2015), media by publishing an article that chal-
has staked out the claim that the Marxian- lenged Marxist theorists to take communica-
inspired theories of the Frankfurt School and tion seriously, as more than just the source
Critical Political Economy suffice for full of ideology formation. Smythe posited that
understanding. And he has done great service the relationship of audience to advertising-
in outlining how we can revive and revise driven media industries could be captured
concepts such as exploitation, surplus value, through a hybrid identity he called ‘audience
and commodity fetishism while examining commodity.’ Smyth explained that the audi-
how people and groups deploy and endure ence commodity is what television networks
social media platforms. But by merely revis- (and radio stations and newspapers) sell to
ing and extending the arguments of the late advertising firms. But that’s not all. The role
20th century, the study of the political econ- that audience members play in this transac-
omy of social media has failed to capture the tion goes beyond that of a passive commodity
full range of consequences and rapid changes like cattle or wheat. The audience performs a
in the field. More importantly, scholarship form of labor, Smythe argued, that enhances
has failed to influence how regulators and the the value of the media firms.
public view and influence social media plat- Smythe started an intense debate about this
forms and the firms that promote it. concept among media scholars in the 1980s
The study of political economy of social and influenced the rise and tone of the Cultural
media has largely been framed within and Studies response to political economy. As
among various interpretations of Marx- Rigi and Prey (2015) explain, the debate
influenced thought, whether echoing Gramsci cooled until Fuchs (2010) revived it with a
 The Incomplete Political Economy of Social Media 215

strong case that social media users provide Economy approaches can benefit greatly from
value and surplus value to firms because – adopting an appreciation of the meaning-
beyond the ill-defined labor that Smythe making dynamics of users and audiences that
asserted audiences performed – social media Cultural Studies scholars have brought forth.
users clearly produce actual works of crea- And Cultural Studies scholars no longer have
tive expression that social media firms frame the luxury of suspending consideration of
and distribute. So in addition to serving as the architecture, economic power, and regulation
sources of attention that social media firms when considering how users and audiences
sell to advertisers (so-called ‘eyeballs’), users perform their roles and organize themselves
are also the chief labor force in the compo- into discursive communities. Maintaining the
sition of the content that makes social media boundaries between these schools of thought
worthwhile, influential, and profitable. This inhibits the fullest understanding of media and
is valuable insight that not only extends power. Schools and theories should supple-
Smythe’s argument but helps us grasp how ment, not displace, each other. If media theo-
the social media user is in fact different than rists don’t look up to see what’s coming next,
the television or film audience member. we risk irrelevance and could fail to guide
The immediate critical response to Fuchs publics, markets, and states as we should.
was based not so much on whether Fuchs
failed to describe the role of the user, but
about whether Fuchs deployed Marx’s
(1992) labor theory of value appropriately. What do social media do?
Arvidsson and Colleoni (2012) replied that
the value of social media user activity is more Social media may, as McLuhan (1964) pre-
centered in the social connections and affec- dicted, contain streams of all previous media
tive expressions users produce than on labor forms. They also foster new capabilities and
per se. Fuchs (2012b) responded to their crit- concerns. They scramble the contexts in
icisms. Then Rigi and Prey (2015) recounted which we have grown comfortable, so mixing
the debate and produced data that served to the personal, the political, the commercial,
complicate and undermine Fuchs’ argument. and the cultural that we have spent more than
This entire debate was interesting, but more a decade trying to get our bearings and forge
for the ways these scholars read Marx than new norms and standards to deal with them
for what they wrote about social media. In (Nissenbaum, 2010).
each of these accounts, social media services Beyond those important observations,
are static, stable, powerful, and valuable. social media are not what we assumed they
They never rise, fall, fail, or corrupt. There is were just 10 years ago. Most scholarship,
no action, only interpretation. understandably and including this chapter,
Perhaps by adding a perspective to these take Facebook and Twitter as the core sub-
analytical lenses we can bring more clearly jects of study. The problem with this practice
into view the role social media companies play is that while both Facebook and Twitter are
in our lives and the ways that they affect – and popular and important in 2016 (when this
are affected by – matrices of power and regu- chapter was written) they might not be by
lation across the globe. But to do this, we must 2020. Twitter, for instance, could be broke
examine the particulars of how social media and gone by 2018. And they are very differ-
companies and platforms have worked and ent services with different rules, norms, prac-
failed in the world. And we should be open to tices, and demands on users. Unsurprisingly,
going beyond defending or extrapolating one they function differently in users’ lives. In
particular theory or another. As I have argued addition, both Facebook and Twitter entered
elsewhere (Vaidhyanathan, 2006), Political our lives first as Web-based platforms,
216 The SAGE Handbook of Social Media

experienced chiefly through desktop and (attempted) silencing instrument.’ This argu-
laptop computers linked via relatively open ment presumes that all institutions of capital-
networks. Use quickly and overwhelmingly ism operate the same ways everywhere and
shifted to proprietary mobile applications, always, and that those of us who live, work,
which allow both companies to control much and dance under capitalism are blinded and
more of the user experience and successfully silenced by the enforced parameters of debate
harvest more and more valuable user behav- that capital will allow.
ior records. The rise of ‘mobile-first’ plat- But experience – whether in the form of
forms such as Instagram and Snapchat further Facebook, Google, and Twitter asserting that
complicates the story and study of social they espouse values distinct from the bas-
media. People use these differently than they est drives of capital accumulation, or global
do Facebook. Beyond the major services of youth protesters harnessing social media
North America and Western Europe, Weibo platforms to rouse direct action against capi-
and WeChat, for instance, deserves signifi- talism in 2011 and 2012 – tells us that there
cant and different study, simply because they is much more going on. Some firms, if only
are important social network services in the temporarily and under ideal conditions, don’t
largest countries in the world. And examin- always follow the rules of capitalism.
ing social media as media also misses some We must have more to learn about this
important phenomena. For instance, as fit- subject than Marxian theory allows us to
ness applications connect with devices that consider. So in this chapter I invite readers
sit on human bodies yet also connect users to to deploy different theoretical lenses, and
each other, they qualify as ‘social,’ but main- offer as one example a theory largely ignored
tain a distinct relationship between users and for much the past century: Institutional
the firms that manage these exchanges. Economics, inspired by the work of an anti-
So social media platforms are both singu- Marxian yet culturally astute economist and
lar and diverse in their nature, their architec- social theorist, Thorstein Veblen. I don’t offer
ture, their goals, the variety of uses to which Veblen as a replacement for Marx and the
they are put, and their ability to generate Marxian tradition. I merely hope to inspire
anxiety among parents, pundits, and politi- political economists of media to look beyond
cians (boyd, 2014). Among other important the standard arguments and frameworks.
phenomena, social media platforms also offer And to inspire scholars to look beyond the
users (an unsatisfying term I deploy with Whiggish story of all-powerful and pervasive
full awareness of its inadequacy) new ways social media firms successfully exploiting
of defining and promoting themselves, thus users and corrupting states, I urge readers to
imposing an ideology of ‘self-branding’ and examine the 2015 regulatory conflict between
capitulation to the demands of an ‘attention Facebook and the government of India. But
economy’ (Marwick, 2013). first we must dissect our subject.
For these reasons I must call for a fresh
approach to studying the political econ-
omy of social media. Marx only takes us
part of the way to clarity. As Fuchs (2014: The facets and functions of
53) explains, such theory is grounded in social media: Architecture and
the assumption that ‘capitalism a) reduces infrastructure
humans to the status of being instruments
for capital accumulation in the form of their At the core of every major social media
role as wage workers and consumers and b) system, whether Weibo or YouTube, are
tries to make them believe in the feasibility architecture and infrastructure. All major
of the overall system by using ideology as an social media platforms operate by connecting
 The Incomplete Political Economy of Social Media 217

devices to databases hosted in redundant pro- technology guru Tim O’Reilly declared the
prietary server farms distributed across the death of ‘Web 1.0,’ in which static and dis-
globe. This centralization of search and host- creet pages were posted on small private
ing functions, as well as the indexing of servers distributed around the world, and the
content according to algorithmically- rise of ‘Web 2.0.’ This new vision for Web
inscribed company values, results in a use and production harvested the labor of
remarkable level of ideological control over users who produced text, images, and links
user actions. While people experience only a that sat on centralized corporate servers.
light, inviting, shallow interface, the millions Companies such as Google, O’Reilly pre-
of lines of code, the miles of fiber-optic dicted, would leverage the work of these bil-
cable, the acres of air-conditioned server lions of individuals into valuable
farms, the tons of aluminum, concrete, and ‘user-generated content’ that could be repre-
glass all remain out of sight and thus out of sented, indexed, and used as a template
mind. Users need not be burdened by knowl- against which advertisements could be sold.
edge of the environmental effects of the infra- The key concept to building value, O’Reilly
structure. They should never communicate argued, was that companies could exploit
with a human being who has influence over ‘collective intelligence,’ the belief that thou-
the system. They should see no traces of sands, millions, or billions of discrete actions
human decision-making or labor. They also and interactions could generate patterns of
should never concern themselves with the preference and behavior, allowing firms to
location of the servers, despite the fact that mine that data for optimal service to users
states can heavily surveil and regulate social (O’Reilly, 2005). On face, this manifesto
media services based on where servers sit. A granted some respect to users and their con-
server in Shanghai will generate different tributions to the fortunes of those who would
effects in the world than one sitting in build platforms on the World Wide Web (or,
Vancouver, largely because of the relative to use O’Reilly’s term, use ‘the Web as plat-
willingness of those governments to control form’). But ultimately, as Scholz (2013) and
and monitor activities over those servers. others argue persuasively, companies like
We have been invited to describe this Google, Facebook, and Twitter depend
architectural choice – tapping into massive almost entirely on the creative labor of their
servers that sit perhaps half a continent away unpaid volunteers. And as Fuchs (2014)
with instantaneous results on computers that asserts, this relationship constitutes exploita-
fit into our palms – as accessing ‘the cloud.’ tion in an almost classically Marxist
This metaphor has further alienated users fashion.
from the architecture, infrastructure, and But through social media, the roles of ‘pro-
labor that enable social media activity. It has ducer’ and ‘consumer’ are scrambled. Users
mystified the system. And it has undermined are not so much consumers, or even labor, as
efforts to address negative externalities such they are commodities or raw material itself.
as privacy violations and excessive control What Google and Facebook sell is the moni-
over content distribution (Pariser, 2011; tored attention and habitual preferences of
Vaidhyanathan, 2011, 2015). their users. Their users are thus the product
as well as the producers. That complex rela-
tionship distinguishes the political economy
of social media from that of broadcast media,
User-generated content for instance. A viewer is also the product that
NBC or StarTV sells to advertisers. But that
The second important facet of social media is viewer does not also provide valuable con-
‘user-generated content.’ In 2005 Web and tent to a television network or service. Still,
218 The SAGE Handbook of Social Media

paying close attention to the rise of audi- to the host company (Facebook, Twitter,
ence labor and other forms of informal and or Google) were lower, making it possible
undercompensated labor such as the Amazon for more transgressive expression to flow.
‘Mechanical Turk’ system (Suri et al., 2016) Communities could grow almost organi-
allows us to move beyond the exclusion of cally from collections of links, comments,
‘audience’ from traditional, 20th-century retweets, follows, and ‘likes.’ But such user
forms of political economy research while interaction also allows companies and states
also curbing the idealization of the ‘audi- to monitor and track users, their preferences,
ence’ that emerged from late 20th-century and their associations on a much grander
cultural studies work. scale (Gerlitz and Helmond, 2013).
‘User-generated content’ models also
allow firms to evade the risks and strictures
of classic publishers. Traditional publishers
such as The New York Times or Bertelsmann Data harvesting
make editorial decisions, and thus face poten-
tial civil liability if their content violates pri- The ability of social media companies to
vacy, copyright, or indecency laws. But in harvest and analyze not only specific content
much of the world, Web and social media created and posted by users, but the relation-
firms have convinced states to limit liability ships between these pieces of expression,
because they do not direct users to post par- allows for the third essential facet of social
ticular content (17 USC Sec. 512, 47 USC media that political economy must consider:
Sec. 230). In fact, the transaction costs of data harvesting. As early as 2002, leaders of
policing ­thousands-to-millions of posts are Google realized that their impressive collec-
so high that conforming to such laws would tion of user data allowed them to sharpen
be impossible. The market would not pro- their search results and recommendations,
vide services such as social media or search keeping users satisfied that Google under-
engines if these companies were held to the stood their desires and – perhaps – even read
same legal standards as traditional publish- their minds (Vaidhyanathan, 2011). Once
ers. However, in recent years, companies like Google introduced its advertising programs
Google have seen their officials held to stand- soon after, the presence of such large and
ards closer to that of publishers for content sophisticated records on each user and on
their users have posted on social media sites. groups of users proved lucrative. By 2008
And both Google and Facebook have recently Facebook was struggling to leverage its own
declared that their engineers will take a more special and massive collection of personal
active role in selecting content that users will data and expressions of preferences to enable
see, with the goal of enhancing the news value its own advertisement placement program.
of their services (Vaidhyanathan, 2011). By 2012 Facebook had achieved the ability
The dominant message proclaimed by to use user data both for selecting and prior-
Web enthusiasts, from the early days of Web itizing content on users’ news feeds and
2.0 through the social and political uprisings optimizing user-targeted advertising, making
around the Mediterranean Sea in spring 2011, it possible for the company to generate sig-
was that ‘user-generated’ content performed nificant revenue and turn a profit for the third
democratizing, and even liberating, functions year in a row (Greenfield, 2012; Thompson,
(Bruns, 2008; Jenkins, 2006; Shirky, 2008). 2009).
No longer did promulgators of ideas need to The practice of data harvesting and
convince traditional ‘gate-keeping’ media data retention did not come without costs.
firms to publish their work (and assume the Facebook and Google faced regulatory chal-
risk to reputation or fortune). Now the risks lenges and investigations in Europe for their
 The Incomplete Political Economy of Social Media 219

data retention practices (Levine, 2015). (consumers, citizens, criminals, ‘users’).

And after former US intelligence contractor To explain the relatively recent turn to data
Edward Snowden released select documents harvesting as a tool of choice, scholars and
about US government data surveillance and analysts have tended to emphasize the avail-
mining programs in 2013, it became clear ability of appropriate technologies. Among
to citizens, states, companies, and terrorists these are huge server farms, algorithms
around the world that the practices of social designed to reveal patterns quickly within
media companies to harvest, retain, and otherwise meaningless pools of data, and
analyze data from their users tempted curi- faster bandwidth and processing capacities.
ous state actors to tap into those troves. As But this techno-centric analysis misses or
long as Facebook and Google retained valu- downplays the role of significant changes in
able records of users’ behavior and expres- the global political economy and dominant
sions, security services in both democratic ideologies since 1980. When securities mar-
and authoritarian governments would press kets and consultants praise ‘efficiency’ above
both companies to reveal records, resort- all other values, when states place ‘security’
ing to breaching the companies’ security if above all other public needs, and when mass-
they failed to gain cooperation (MacAskill market advertising reaps, at best, murky
et al., 2013). These revelations put the repu- returns for each dollar spent, the incentives to
tations of social media companies at great target, trace, and sift grow stronger.
risk, as their utility as sites for collaboration When we examine the intentional opac-
and communication among dissident groups ity of such private surveillance systems and
came into question. their vulnerability to capture by state secu-
The practice of data harvesting is largely rity systems, we can forge a new sense of
hidden from users. There are no obvious the privacy challenge in a socially mediated
clues from applications and platforms like environment. No longer can we rely on the
Instagram or SnapChat that user data is being model of the ‘panopticon,’ the all-seeing
recorded, where and for how long it will be central eye that forces us to acknowledge it,
stored, and to what purposes it may be put. thus curbing our desires to act outside the
These and other services do offer vague, norm (Foucault, 1995). Those who write
technical, and unhelpful ‘privacy policies’ about privacy and surveillance often invoke
that could answer some of these questions the Panopticon to argue that the great harm
for users. But the policies are uninviting and of mass surveillance is social control. Yet the
not obvious. One must already be aware of Panopticon does not suffice to describe our
the practice and its risks in order to engage current predicament. First, mass surveillance
with a privacy policy or adjust privacy set- does not necessarily inhibit behavior: peo-
tings. So for most users, the defaults work in ple often will act as they wish regardless of
the company’s favor. Those most immersed the number of cameras pointed at them. The
in the cultures and practices of social media, thousands of surveillance cameras in London
teenagers and young adults, are often the and New York City do not deter the eccentric
most sophisticated and aware of data harvest- and avant-garde, nor is there significant evi-
ing practices (boyd and Marwick, 2011). dence that they deter crime (Greenberg and
In the current commercial, political, and Roush, 2009; Welsh and Farrington, 2009).
regulatory environment, institutions have There is no empirical reason to believe that
powerful incentives to collect, save, and ana- awareness of surveillance limits the imagina-
lyze every trace of human activity. These tion or stifles creativity in a market economy
incentives are not entirely new, of course. in an open, non-totalitarian state.
People have long been aware of the poten- Instead we must confront a hidden and
tial payoffs of tracing and tracking subjects distributed system of surveillance that
220 The SAGE Handbook of Social Media

encourages us to find niche interests and practices it has also served that market well.
express ourselves loudly and sincerely. The These companies have significantly changed
ideologies of Facebook, Google, and even the advertising world and thus all the media
Amazon guide us toward such niche expres- economies that depend on advertisement
sion. And 21st-century security services hope (Auletta, 2009; Bell, 2016; Levy, 2011).
that we align ourselves with the fringe groups Targeted advertisements that reflect the
while assuming that no one is paying atten- various preferences expressed by users have
tion. Our current condition is therefore not the potential to shape not only consumer
at all like living under the gaze of a pano- behavior but culture as well. If consum-
pticon. Instead, we live within an invisible ers are guided toward dependable products
network or surveillance agents, both public and brands that reflect the desires they have
and private. It’s cryptic. So it’s a cryptopticon already expressed, they are unlikely to
(Vaidhyanathan, 2015). explore. If abused, the power to guide users
toward particular products could generate
anti-trust or competition issues. Even if not
abused, users are subject to being profiled
Advertisements and funneled. And mass markets could be
hard to define and exploit. A user’s diet of
Google and Facebook play very different news and information is filtered through an
roles in users’ social media ecosystems. opaque system in which biases are undis-
People use Facebook to keep up with family, closed and unacknowledged. Even prices
friends, and colleagues. Facebook provides a could differ between consumers for the same
news feed that displays items of demon- product based on different data points and
strated interest to users and allows people to histories (Turow, 2006, 2011).
discuss and debate the subjects that appear in The phenomenon of targeted advertise-
those feeds. Google, on the other hand, ments has pulled other media companies
serves as a source of knowledge. People seek closer to Facebook and its corporate sibling,
answers, directions, recipes, and advice Instagram. Newspaper and magazine compa-
through Google. People seek products as nies see advantages to entering into partner-
well. Over time, Google has been much more ships that would allow Facebook to host the
successful than Facebook at leveraging its content in exchange for a portion of advertis-
data riches to target advertisements effec- ing revenue generated (Fitts, 2015).
tively. But Facebook has recently improved
its ability to target and tailor advertisements.
Seeking advertisement revenue from compa-
nies is the chief way in which these two Content discrimination
companies compete. While Facebook is the
model of a successful social media company, Advertisement-based partnerships between
Google provides services that could be news organizations and social media plat-
described as successfully ‘social’ only forms run the risk of determining which
through its YouTube platform, through which news sources reach certain people based on
people subscribe to the feeds of their favorite the desires of the companies involved rather
video producers. Google, while largely fail- than the desires or needs of the user. This
ing as a social media enterprise, has set the undermines efforts to use digital media to
standard and served as a model for selling construct a rich and dynamic public sphere
advertisements through auction. Firms of all through which civic engagement could
sizes can find consumers through Google. thrive. By working through Facebook, media
And since Facebook has adopted similar companies have relinquished any influence
 The Incomplete Political Economy of Social Media 221

or control over who gets to see their content. demands human intervention. Female users
This is a significant shift in power (Bell, of both Facebook and Instagram have found
2016). content removed and accounts closed after
There are two methods of content discrim- posting images or references to breast cancer,
ination within major social media platforms. breastfeeding, or menstruation. In general,
We will limit our discussion to Facebook both Facebook and Instagram work to limit
because it plays an outsized role in the news the exposure of women’s bodies unless the
and information diet of users. Twitter, for users are celebrities or models. Women with
example, does not deploy the methods that more common body shapes often find their
follow, as of the summer of 2016. The first images suppressed. In addition, there have
method is filtering. Facebook positions items been accounts of images of refugees, warfare,
that its users have shared (from sites out- and political groups being removed for vio-
side the Facebook ecosystem) or produced lating vague guidelines (Chen, 2014; York,
themselves (photos, text, video) within the 2016). Because Facebook has an interest
news feeds of others. Those others could be in limiting public criticism or inviting state
‘friends’ or merely ‘followers’ of the person censorship, it also has an interest in policing
who posted the content. Facebook algorith- its own content in often clumsy ways. This
mically assesses the relevance or level of practice generates problems because so many
interest that the second person would have in people now depend on Facebook to mediate
the first person’s posted content. Facebook’s their social and political lives.
algorithms could consider factors such as
shared interest (both parties have posted
similar or the same item frequently in the
past), shared friends (both parties are active Social engineering in India
on some mutual ‘friend’s’ site and posts), or
shared proximity (to a community of inter- In January 2012 Facebook released its first
est or a geographic location). Facebook is shares through an initial public offering of
notoriously secretive about the values it stock. Founder and chief operating office
embeds in its algorithm. But we know that Mark Zuckerberg took that moment to issue
over time, users form homophilous clusters a manifesto for his company. ‘Facebook was
and increasingly interact with each other. As not originally created to be a company,’
each member of this cluster expresses her- Zuckerberg wrote. ‘It was built to accom-
self or himself in richer and more elaborate plish a social mission – to make the world
ways, Facebook is able to make more granu- more open and connected’ (Zuckerberg,
lar judgments about what sort of material the 2012). Zuckerberg’s commitment to corpo-
person would like to see. If a person ‘Likes’ rate social responsibility, to making the world
something, Facebook gives that person more a better place through connectivity, has found
of it. As Facebook structures usage, users see expression in his company’s endeavors to
a narrower and narrower selection of mate- expand its market into areas of the world in
rials. This creates the notorious ‘filter bub- which significant numbers of people lack the
ble,’ through which users increasingly retreat access, skills, and money to sustain a digital
into ideological or other interest clusters presence.
and refrain from interacting with those sig- Corporate social responsibility has risen in
nificantly different than themselves. This, of importance to global business culture since
course, has serious political, social, and cul- the 1970s. It has served as an organizational
tural implications (Pariser, 2011). principal among corporate leaders who were
The second method of content discrimina- not only concerned about their companies’
tion is a function of direct editing, which often influence on the Apartheid government of
222 The SAGE Handbook of Social Media

South Africa, environmental disasters such the Bing search engine (Microsoft’s competi-
as the deadly chemical accident at Bhopal, tor to Google and many other home-grown
India, and struggles against ethnic and gender search engines), women’s rights services,
discrimination, but also about the image of employment services, Wikipedia for refer-
their companies in the minds of a consuming ence, and weather information.
public increasingly concerned about injus- Importantly, these services would be
tices around the world. Debates around cor- offered at ‘zero rating,’ meaning that using
porate social responsibility have centered on data through them would not count against
the question of sincerity, of course. Are com- the paid data one would purchase for a
panies that engage in such promotions really mobile account. Using a competing service
concerned about human rights and a clean such as Google or an employment service
environment or are their efforts merely a not selected by Facebook would cost data
marketing ploy? Within business culture and and thus money for the user. If the user could
the scholarship on corporate social responsi- not afford a data plan – and this service was
bility, the central question has been about the ostensibly targeted at just those users – they
efficacy of such campaigns: Can a company would have to use the services that Facebook
leverage its efforts to be responsible to meas- selected for Internet.org. Because zero-rating
urably improve its image and thus its stand- services necessarily favor some data streams
ing in a market? Can companies have it all? over others they violate the principle of net-
(Vogel, 2006) work neutrality that has been invoked as
Facebook’s corporate social responsibil- central to the development and success of
ity stances reflect the common assumption Internet practices and industries around the
among American technology companies, world. Regulators have thus been busy try-
including Google and Microsoft, that there ing to determine to what extent zero rating
is no zero-sum choice between serving the violates their laws and policies (Electronic
interests of humanity and serving their share- Frontier Foundation, 2016; Nowak, 2016).
holders. What is good for humanity is good In each country in which Facebook
for Facebook, and vice versa. Such firm launched Internet.org (42 countries by July
belief in one’s righteousness is both liberat- 2016), Facebook enters into a partnership with
ing and powerful. It can create a public mes- one mobile service provider. Facebook prom-
sage that generates admiration from users, ises that offering this service at no charge to
consumers, regulators, workers, and com- consumers who do not currently have mobile
petitors (Vaidhyanathan, 2011). data plans will inspire future paid use as
In India, Facebook found the limits of its users’ financial status improves. This pledge
self-regard. In 2014 Facebook launched a rests upon the unquestioned assumption that
service it called ‘Internet.org.’ The choice of access to information improves the prospects
that brand name indicated that it should be of users and the communities in which they
considered distinct from Facebook itself. It live and work (Bhatia, 2016).
would be about ‘the Internet’ itself, rather This challenge to network neutrality thus
than one social media company. And it accompanies a more traditional threat to com-
should be considered a not-for-profit venture petition. India, unlike some of the other coun-
(.org) rather than a commercial one (.com). tries in which Facebook launched Internet.
The service was essentially an application org, has deep traditions of democratic par-
interface – sort of a mobile operating sys- ticipation and a highly competitive private
tem – that would work on any mobile device technology and telecommunications sector.
that allowed data connectivity. The operat- Indian entrepreneurs would like to compete
ing system would allow access to a handful in areas such as mobile health information,
of Facebook-selected applications, including search engines, and social media. And India
 The Incomplete Political Economy of Social Media 223

has a vibrant collection of public interest campaign. Technology leaders noted the tone
activists who have been pushing to limit intel- that Facebook was using with India and com-
lectual property protection for American and pared it to the promises that British East India
European firms while fighting for free speech Company leaders had deployed in the early
and privacy protections through digital net- days of the colonial project (Bhatia, 2016).
works. So when Facebook brought Internet. Complicating such matters, Facebook
org to India in 2014, complete with meet- officials made tone-deaf statements. Chief
ings between Zuckerberg and newly elected Operating Office Sheryl Sandberg published
Prime Minister Narendra Modi and a massive an op-ed in the Indian Express newspaper in
public relations campaign, it did not expect which she proclaimed that access to digital
that it would fail. Facebook officials not only services can empower poor women to change
underestimated the opposition within India, their status (Sandberg, 2015). Unfortunately,
they failed to pay attention to the particulars the changing status of women is a controver-
of the Indian political economy. sial subject in India, so the op-ed served to
Public interest activists were adept at using alienate many traditional Hindus who voted
social media services – including Facebook for Modi to maintain traditional social rela-
but especially YouTube and Twitter – to rally tions intact. And economic competition
support for network neutrality and opposition is fierce for opportunities and resources
to what they saw as an arrogant move by a as India’s middle class has swelled over
powerful American company in cahoots with the past 30 years. So the prospect of invit-
Modi. Facebook officials, in contrast, were ing more poor people into the middle class
not nearly as effective as their opponents at did not appeal to many families that just
deploying social media in their campaign recently purchased a scooter or an education.
to convince users and voters that their ser- Sandberg and Facebook certainly meant well.
vice would benefit India more than it would But they were dealing with a society they did
Facebook (Bhatia, 2016). not understand, and one in which many of its
Everything Facebook officials did in their citizens do not mean each other well. And
effort to thwart a strong network neutral- the ruling BJP party represents just those
ity ruling by telecommunications regula- citizens.
tors backfired. Billboards asking citizens Immediately after Facebook lost its effort
to ‘support a connected India’ glowered to stem strong network neutrality in India,
at motorists stuck in traffic in cities across Facebook board member Marc Andreesen,
India. Facebook users in India were greeted the founder of Netscape and a current venture
by messages on the service asking them to capitalist, sent a Tweet complaining about
send emails to regulators in support of Free the decision: ‘Denying world’s poorest free
Basics, what Facebook had renamed Internet. partial Internet connectivity when today they
org in 2015. But regardless of whether a have none, for ideological reasons, strikes
Facebook user actually agreed to send an me as morally wrong.’ In response to several
email to regulators, Facebook would adver- Tweeted replies to this complaint, Andreesen
tise to that user’s ‘friends’ that he or she proclaimed, ‘Anti-colonialism has been eco-
had done so. This angered many Facebook nomically catastrophic for the Indian people
users. Ultimately, 16 million emails reached for decades. Why stop now?’ This, under-
regulators, but their staff complained that standably, set off a storm of resentment
these automatically generated emails failed against Andreesen. Facebook officials quickly
to address the specific questions they had distanced the company from Andreesen’s
posed through the public comment pro- expression. And later that day Andreesen
cess. News coverage focused on the clumsi- apologized for the Tweet and promised
ness and high-­handedness of the Facebook to refrain from discussing the history and
224 The SAGE Handbook of Social Media

politics of India on Twitter (Narayan, 2016). our lives over the next 20 years? Will politi-
The Andreesen affair offered a glimpse into cal economy theory be able to keep up?
the ideology that too often guides decisions Consider the four most powerful digital
and campaigns dictated from Silicon Valley companies in the United States (I am exclud-
yet meant to benefit people far from its levels ing Weibo, Ali Baba, Yandex, VK, and other
of wealth and power. powerful and important social media and
Examining the story of Facebook’s fail- Web search companies in places like China
ures to introduce Free Basics to India and Russia where Google and Facebook have
demonstrates the need for a sophisticated, struggled to establish markets): Facebook,
multi-faceted, and open approach to the study Alphabet (the holding company for Google),
of political economy. Facebook is not just a Microsoft, and Apple. As of 2016 these
social media platform that operates on the four companies compete for highly trained
Internet and mobile devices. It has designs and experienced labor. And they compete
to represent or stand in for the Internet and (and collaborate) for political influence in
mask its intentions behind proclamations of Washington, DC and Brussels. But they are
public service. If it can’t get Facebook.com not direct competitors. Facebook and Google
in front of millions of underprivileged peo- do compete for Web and mobile advertising.
ple, it will try to convince them that Internet. But they harvest and sell our attention in dif-
org is a good enough Internet for now. ferent ways because we use these services
This story is one of a wealthy and pow- in different ways. Apple still sells hardware
erful company morphing and metastasizing. for its core business. Microsoft still sells
Traditional political economy theory fails to software to make most of its money. Areas
account for failure – specifically failure in of crossover competition, such as Bing with
part caused by activists using Facebook and Google or Google + with Facebook, have not
competing social media platforms better than amounted to much beyond token efforts.
the master can use his own tools. Facebook’s But each of these companies ha mounted
relationships with states, users, and other efforts to achieve dominance in the next fron-
commercial services are dynamic and tem- tier of digital commerce: the data streams
poral. Traditional political economy theory that would monitor, monetize, and govern our
fails to fully describe or challenge a company automobiles, homes, appliances, and bodies.
like Facebook as it enters its second decade Often erroneously referred to as ‘the
of dominance. Internet of Things’ despite not resembling
the Internet or being chiefly about things,
these four companies are striving to become
the operating system of our lives. Data, they
Beyond social media: The predict, will soon flow from our clothing, our
operating system of our lives vehicles, and thus our bodies. The operating
system of our lives is actually about people.
Social media are no longer just social media. As they steadily introduce personal assistants,
And all media firms and services are attempt- new interfaces, thermostats, self-­driving cars,
ing to become ‘social.’ The permeable mem- glasses, watches, and virtual reality goggles,
branes among media services make accounts these companies hope to earn the trust of
of social media done at a theoretical distance consumers and regulators such that they can
challenging. Observations and accounts of set the standards for the transactions that can
the political economy of Facebook in 2010 make this operating system work seamlessly
might not be relevant in 2020. What if ‘social and efficiently. If they realize this vision, there
media’ – and in fact ‘media’ – become some- would be no clear distinction between media
thing much more pervasive and powerful in and non-media. There would be no distinction
 The Incomplete Political Economy of Social Media 225

between content and objects. All objects and complex and contradictory motivations, shifts
all bodies would be mediated content. in user norms and behavior over time, relative
Such a prospect should alarm scholars of success and failure or particular firms and
the political economy of media. How shall platforms, and differences in how certain
we confront such an effort? How shall we groups (ethnicities, genders, sexualities, age
muster a vocabulary, a set of theories, and cohorts, etc.) perform their roles in social
a set of rhetorical tools sufficient for such a media differently. What might serve us better
challenge? Such a prospect makes the debate is a fusion of Marxian political economy
over whether Facebook’s users add surplus theory with what Mills (1959) called ‘the
value under Marxist theory rather quaint. sociological imagination,’ a historical vision
that appreciates the long curve of human
expression, and an anthropological bend.
Fortunately, we have a model for such a style.
Why Veblen matters It lies in the diverse work of Thorstein Veblen.
Veblen lived from 1857 to 1929. An econo-
Theory performs two major functions in intel- mist and sociologist, he witnessed a time of
lectual life. As in the natural sciences and rapid technological change, globalization,
economics, theories attempt to so fully imperialism, and concentrations of wealth.
account for a phenomenon as to dependably His chief contribution to economic theory was
predict the nature of change. If the theory a critique of the Newtonian assumptions of
fails to predict results, scientists revise or neoclassical economics. Neoclassical analysis
reject the theory. Over time a theory morphs sees economic factors such as wages and prices
into something more useful than the theory it seeking equilibrium, as if guided by laws
replaced (Kuhn, 1970; Popper, 1959). In the of thermodynamics within closed systems.
realm of the study of societies and cultures, Instead, Veblen argued, economists should
theories are useful as heuristics, shorthand take inspiration from Darwin’s accounts of
methods of explanation. They help us focus change, stasis, successes, and failures among
our explorations and debates, providing ques- species (Veblen, 1904; Veblen and Horowitz,
tions and assumptions that save us time and 2002). This attention to flow, change, and con-
energy. The risk of social and cultural theo- tingency should be embedded within an appre-
ries lies in our dependence on them. Affection ciation of the role of norms and values. People
for a particular theoretical framework can can make economic choices based on irra-
limit the questions we ask and the subjects we tional or useless values – but they are relevant
explore a bit too well. We risk bracketing values nonetheless. From these arguments
particular aspects of a subject of study to the Veblen derived the familiar concept of ‘con-
exclusion of others, and thus we can fail to spicuous consumption’ to describe economic
appreciate and account for the relationship decisions made to establish or proclaim status
between an aspect that ‘counts’ to a theoreti- for the sake of status (Veblen, 1905; Veblen
cal school and one that does not. So, for and Mills, 1953).
example, we might be obsessed with defining Veblen’s work inspired a school of eco-
the extent to which social media users per- nomic thought that strongly challenged both
form unpaid labor on behalf of exploitative neoclassical theory and Marxist historical
firms (all true and important) yet ignore ques- materialism. Institutional economics put its
tions of whether that relationship flows from emphasis on transactions – commercial, politi-
cultural or affective desires that are being cal, and personal – and externalities – social,
widely or deeply satisfied through the plat- environmental, and cultural. It took seriously
form. Investment in traditional political econ- the persistence of communal values, and thus
omy theory does not fully account for merged anthropology with political economy.
226 The SAGE Handbook of Social Media

It also considered technological change, and As we confront a global phenomenon like

thus merged historical analysis with political ‘social media,’ which always shifts and sifts
economy. For Veblen and those inspired by his through our analytical fingers, we should keep
approach and style, including John Kenneth in mind that our theories must shift as well.
Galbraith (1958), C. Wright Mills (1956), We should embrace multiple approaches to
Deirdre McCloskey (2008) and Robert Frank the study of political economy. We should be
(1985), political economy is never about open to abandoning the familiar and engag-
abstracting data and research questions from ing with the unfamiliar. And we should move
the greater ecosystems of collective human beyond doctrinal debates that freeze the sub-
behavior. ject we hope to confront.
Veblen did not prescribe a method of
analysis. Instead, his style serves as a model
for interrogation and interpretation that goes References
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