253. Is the Internet Being Ruined?

It's a remarkable ecosystem that allows each of us to exercise control over our lives. But how much control do we truly have? How many of our decisions are really being made by Google and Facebook and Apple? And, perhaps most importantly: is the Internet's true potential being squandered?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Stephen J. Dubner?

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• 0:45Stephen J. Dubner?

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• 1:28Stephen J. Dubner?

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• 2:19Stephen J. Dubner?

  Until August of 2014, most people had not heard of Ferguson, Missouri. And then, suddenly, everyone had.

• 2:30Stephen J. Dubner?

  An 18-year-old black resident of Ferguson was shot and killed by a white police officer. This led to protests, chaos, some more violence. The police in Ferguson responded with tear gas and stun grenades.

• 2:47Speaker 01

  So, on Twitter, I noticed that there was a protest in Ferguson that was being met with a lot of police presence.

• 2:57Stephen J. Dubner?

  Zenep Tufekci is a professor at the University of North Carolina Chapel Hill. She studies the social impact of technology. As the Ferguson story was unspooling, she was trying to keep up on Twitter and Facebook.

• 3:11Speaker 01

  There was all this talk on Twitter about what looked like real police overreaction.

• 3:21Speaker 01

  Millions of tweets were apparently sent during this day where people were concentrating on what was going on. And I switched to Facebook in the middle of all of this. And on Facebook, this whole event that had consumed my Twitter feed, didn't exist. Nothing. And then I would switch back to Twitter, and it was the topic. There were so many people talking about it. And I would go to Facebook, and I'd see nothing. So I started switching my algorithm to Reverse Chronological on Facebook, which shows the posts your friends made in order of time, rather than Facebook's algorithm.

• 4:04Speaker 01

  And when I do that, I would see people talk about Ferguson. But Facebook's very sticky in terms of its algorithm. It would just switch me back. I would try to see what my friends were saying, and Facebook would switch me back to its algorithm, which would show me the Ice Bucket Challenge.

• 4:27Speaker 01

  Which is great. I mean, that's a great thing for people to do is to donate to research for a disease. But it was all over my feed, nothing but ice bucket for a while. And that was because that challenge was very suited to Facebook's algorithm, which likes things that people click like on. And it also likes things where you upload your own video, and people are uploading their videos of pouring water over their heads. It was perfect for Facebook's algorithm. So it basically took over Facebook. Meanwhile, this disturbing, difficult, important conversation about US policing and race relations, which would later become a large movement, could only exist on Twitter, where there

• 5:12Speaker 01

  was no algorithm, and it was people's interest that was driving the conversation.

• 5:19Stephen J. Dubner?

  Today's episode of Freakonomics Radio is about the internet. Yep, the internet. As we all know, it is a remarkable ecosystem that allows each of us to exercise a certain amount of control, a certain amount of leverage, over our livelihoods, our interactions with friends and family, strangers, maybe even over our politics. But how much leverage and control do we really have? Is the internet the great democratizer, the great decentralizer that we were told it would be? Or is all that leverage being recentralized to powerful institutions? Different ones than in pre-internet days, but powerful institutions just the

• 6:00Stephen J. Dubner?

  same. There have always been gatekeepers in every aspect of life throughout history, so it's not surprising the internet has them. We'd be naive to expect otherwise. But one of the most intoxicating promises of the internet was that it would foster a new dimension of openness and independence. So on today's show, how well is that promise being kept?

• 6:27Speaker 02

  What we've seen in the last seven or eight years is that around those open spaces we created, a new set of control points is beginning to emerge on the net.

• 6:39Stephen J. Dubner?

  Also, a brief history of the internet and what made it such an upside-down technology.

• 6:44Speaker 03

  Our whole goal was to make sure that the network was completely ignorant of what the user was trying to do.

• 6:51Stephen J. Dubner?

  And is the internet's true potential being squandered?

• 6:56Speaker 01

  They're the brightest computer scientists, and all they're thinking about is, how do I keep someone on Facebook for 10 more minutes?

• 7:18Speaker 04

  From WNYC Studios, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner.

• 7:44Stephen J. Dubner?

  It's pretty easy to argue that the internet has been a transformative technology, although some people argue that it hasn't been, that for all its shiny and sexy features, it isn't so much a new, new thing as it is a sort of booster shot for existing technologies. Email and other internet communication may be faster, more flexible, cheaper than snail mail and the landline phone and the telegraph, but it's still just communication. You may be extremely reliant on Uber or Spotify or Amazon, but we already had cars and music and catalog stores. You may be downright addicted to Facebook or Twitter, but we already

• 8:22Stephen J. Dubner?

  had, well, mouths and ears and friends and enemies. How transformative has the internet been for you? Your answer probably depends on a lot of factors. At what age you started using it, exactly how and how deeply you engage with it, and maybe the degree to which you want your internet engagement curated, whether by Facebook or Google or, as a users' agreement might put it, by any and all platforms now known or hereafter devised. The internet will, of course, keep changing. It's already changed a lot. But how did it get to where it is?

• 9:02Stephen J. Dubner?

  How closely does the modern internet resemble its original design? Those are some of the questions we'll be trying to answer today. The episode was inspired by a recent issue of Dataless, the journal of the American Academy of Arts and Sciences. The issue was called "The Internet", and it featured essays by some of the scholars you'll be hearing from in this episode. Let's begin at the beginning of the internet. Here is Freakonomics Radio's senior producer, Christopher Wirth.

• 9:33Speaker 05

  David Clark first got his hands on a computer in the mid-1960s, when he was a student at Swarthmore College. The IBM computer, the schoolbot, was this big, clunky contraption. It filled an entire classroom, and he says everyone took turns using it.

• 9:48Speaker 03

  At the time, I was an electrical engineer. And when this computer showed up, it actually came with a book with all the schematics. And I sat there and I read them, and I studied the operating system, and I was hooked.

• 9:59Speaker 05

  Not long after that, Clark switched to computer science and went on to get a PhD at MIT. In fact, he's still there as a senior research scientist at the Computer Science and Artificial Intelligence Lab. But in the 1970s and 80s, Clark was part of a small, loose-knit group of engineers in academia and at government agencies in the United States and Europe who fantasized about linking all those big, clunky computers together so that people all over the world could collaborate. They tinkered, they experimented, and ultimately, they figured out what this network that would later be called the internet should look like, how it should work and function. And to this day, Clark says, "Everything we do online sits on top of this largely invisible,

• 10:44Speaker 05

  underlying structure they created." For example, Clark was a key figure in developing the basic language of the internet, which passes information back and forth by breaking it up into these little pieces called packets.

• 10:56Speaker 03

  Basically, what it does is it numbers all the packets in sequence. When they're received, it puts them back in the right order. If there's a missing packet, it gets sent again. So eventually, the sequence of packets gets reassembled, and then that's handed on to the application at the receiving side.

• 11:10Speaker 05

  The important thing to bear in mind, he says, is there was no central blueprint for the Internet when it was being developed. Engineers like himself and others just had this notion of connecting computers together over long distances. And he says it really could have gone any number of ways.

• 11:26Speaker 03

  We were making this up from scratch as we went. And there weren't any design principles. There weren't any guideposts to help us. This was a new, uncharted territory. So recognizing that this is an engineered artifact, it's not something that just happened, helps you to understand that it could have come out different.

• 11:46Speaker 05

  That is not to say the Internet wouldn't have happened at all. In the 1960s, there were technologists who were already dreaming about this stuff.

• 11:54Speaker 03

  One of the really notable visionaries in this area was a man called J.C.R. Licklider. Everybody called him Lick. And he was a genuine visionary.

• 12:03Speaker 05

  Lick was a psychologist and engineer at MIT who was very excited about the computer's prospects.

• 12:09Speaker 06

  Computer technology has been moving in a way that nothing else people have ever known has moved. Here is a field that gets a thousand times as good in 20 years.

• 12:20Speaker 05

  Licklider was also a director at the Department of Defense's Advanced Research Projects Agency, or ARPA. It was responsible for the creation of ARPANET, a precursor to the kind of Internet Lick envisioned in the 1960s. Here's David Clark again.

• 12:35Speaker 03

  Some of the papers he wrote back then are amazing for their predictive quality. He talked about interactive chat. He talked about the web, although he didn't call it the web, of course. We didn't have that name for it. But he talked about services online, banking and financial services. He talked about games, shopping online.

• 12:58Speaker 03

  All of these ideas were floating around as potential applications once we built this global network of computers. And that was, that was well articulated in the 1960s. What we were doing in the 1970s was trying to build it.

• 13:13Speaker 05

  But people like Clark didn't have any experience in building a network for sharing information at that scale. At the time, the only thing that had come close had been built by telephone companies. And he says they had a very specific use for that network.

• 13:27Speaker 03

  It was for carrying phone calls. And there's a major distinction between the internet and the telephone system, which is that telephones are pretty stupid.

• 13:37Speaker 05

  Meaning that a telephone itself doesn't really do much. It's the networks they're connected to that have all the smarts. Telephones are really only good for making and receiving phone calls.

• 13:48Speaker 03

  All the intelligence in the telephone system is in the switches. That's where phone numbers are translated. That's where calls are forwarded. That's where resources are allocated.

• 13:57Speaker 05

  Computers, however, aren't stupid. They can perform a lot of different functions. They're what engineers call general purpose devices.

• 14:05Speaker 03

  And those of us who were building the internet wanted to build a general purpose network to hook general purpose computers together.

• 14:12Speaker 05

  A network that wasn't focused on one specific company, the way the phone network at the time was built around AT&T, or focused on one specific function. They wanted it to be versatile. For example, the first system for sending emails was invented by a computer programmer named Ray Tomlinson in the early 1970s. He designed it for the people working on ARPANets so that they'd have an easier way to communicate with each other. And for a long time after it was commercialized, Clark says email was the innovative application.

• 14:43Speaker 03

  Back then, to say that you were on the internet meant that you had an email address. So we could have built a network that was dedicated to email, but we didn't want to do that. We wanted to build a network that was general because that made it possible to introduce new applications without modifying the network.

• 14:58Speaker 05

  And to accomplish that, Clark says, they needed to do the opposite of what telephone companies had done. In this case, it was the network, not the devices, that needed to be stupid.

• 15:07Speaker 03

  In fact, we wanted to build what we have called the dumb net. And our whole goal was to make sure that the network was completely ignorant of what the user is trying to do.

• 15:18Speaker 03

  It just sees data come in one side and it forwards the data and delivers it to the other side. It's up to you what that data is. And in that respect, the core of the Internet is very, very simple because we assumed that all the smarts, the application code and stuff like that, was running on these computers at the edge. So in some sense, we took the design principle of the telephone system and turned it inside out. And that's basically what occupied us during the 1970s. What happened in the 1980s is that we had to deal with issues of scale. We had a sense of hooking up all the computers in the world. The thing that confused us was we misunderstood how many computers there were going to be. And then personal computer comes along.

• 16:00Speaker 03

  And there was this moment when we realized, oh, they're not going to be hundreds of thousands of computers, they're going to be hundreds of millions of computers.

• 16:10Speaker 05

  Hundreds of millions of computers. The 1990s, of course, saw the introduction of the World Wide Web. And we should be clear, the web and websites that you visit online are accessed through the Internet. They are two different things, even though we often use those terms interchangeably. By 1995, according to the Pew Research Center, 14% of Americans were using the Internet. And for the people who ventured online in those early days...

• 16:36Speaker 03

  It was exhilarating.

• 16:41Speaker 05

  That is Yohai Benkler. He's a professor at Harvard Law School and a director at the Berkman Center for Internet and Society.

• 16:47Speaker 03

  The experience of being a user in that earlier moment was very much one of discovery, of constantly being able to stumble on new things. That part of it was exhilarating.

• 17:04Speaker 05

  People were writing on the web, creating their own websites and new online communities, all of which began disrupting the institutions, media and commerce and so on, that had been in place for decades.

• 17:17Speaker 03

  There were well-defined control points or toll booths that someone could sit at and decide, you get to innovate, you don't get to innovate. You get to communicate with people you want to communicate, you don't get to communicate.

• 17:33Speaker 02

  That changed dramatically with the Internet, and you saw a radical decentralization of the ability to speak and innovate and communicate without permission. Power was decentralized.

• 17:47Speaker 05

  And that's basically how we think about the Internet today, disrupting and sometimes replacing traditional institutions and industries. But as the Internet has grown and the number of global users has topped 3.2 billion people, Bankler says there's been this really worrisome shift with a handful of companies, Facebook, Apple, Google, that now have an outsized influence on how we use the Internet.

• 18:11Speaker 02

  What we've seen in the last seven or eight years is that around those open spaces we created in the first two decades, a new set of control points is beginning to emerge on the net.

• 18:24Speaker 01

  We're seeing the birth of a new center of power, real power.

• 18:30Speaker 05

  That again is Zainab Tufekci at the University of North Carolina Chapel Hill.

• 18:35Speaker 01

  We depend on these technologies that have been in many ways wonderful and fascinating, and they've greatly enriched my life. But these companies have major power, and they're making significant decisions unilaterally. So there's a whole host of new questions that haven't even been explored.

• 18:57Speaker 05

  Like whether we're trading that open and exhilarating Internet for a more insular, siloed Internet experience. Like the way Facebook prefers the ice bucket challenge over police protests, showing us things it thinks will like instead of what might actually be important. Or, Yohei Bankler says, take the seemingly innocuous shift from the desktop to the mobile Internet.

• 19:19Speaker 02

  More than half of Internet access, if you think of time and particular uses, is now moving to the smartphone.

• 19:25Speaker 05

  Which has also prompted Internet users to migrate from general-purpose web browsers to single-purpose apps: your Facebook app, your Twitter app, your Wall Street Journal app.

• 19:35Speaker 02

  When browsers first came out in the 1990s, the idea was, here is a universal standard for describing what it is you want to say or show. And if you use that universal language, then anyone using any device can implement this reader. And essentially what the browsers did... Was they decentralized power from the operating system? If you were writing for Windows, you needed to write for Windows in this way. If you were writing for Apple, you needed to write for Apple in that way. Once you could write something on the web, you could write to this general purpose reader, the browser,

• 20:20Speaker 02

  and anything could run. What happened with the app is that you got special purpose containers, if you will, for every kind of content. So you shifted from a general purpose platform that's based on open standards and anyone can write what they want to a platform that says, write a very special program that fits only your data. Complete transformation.

• 20:55Speaker 05

  To understand that transformation, Zanup Tufekci says just look at the very proprietary iPhone ecosystem that's been created by Apple.

• 21:04Speaker 01

  It designs the phone, and then it designs the operating system, and then it decides what apps are available on the operating system or not.

• 21:15Speaker 05

  iPhone users have to go through Apple's App Store to add almost anything to their devices. And if you're one of the hundreds of thousands of outside developers who produce apps for the iPhone, you can't just put your app out there. There's an approval process. And Yohai Bankler says Apple has been known to reject apps that it finds objectionable.

• 21:35Speaker 02

  For example, someone developed a game that essentially criticized the manufacturing conditions and the worker conditions at the Chinese company Foxconn that was putting together the iPhones. That got banned on the App Store and removed from the App Store.

• 21:54Speaker 01

  There was another app that was blocked that sent out a notification. Every time a drone had been used to kill people, so it was a political statement to say, look, this is how much we're using drones to do this. And the App Store wouldn't approve this.

• 22:10Speaker 05

  Apple, we should mention, has about a 40% share of the market for mobile operating systems in the United States and roughly 25% globally.

• 22:19Speaker 01

  Which means if you're not in the App Store, you're done because you lost every Apple phone out there.

• 22:25Speaker 05

  And while these may sound like fairly minor examples, Benkler says, consider the deal that Apple made to restrict the use of Skype when it first became available on the iPhone in 2009. At the time, AT&T was the iPhone's exclusive carrier. And AT&T essentially told its customers, by the way, we have this rule about Skype.

• 22:46Speaker 02

  You can't run Skype unless you're on a Wi-Fi network.

• 22:49Speaker 05

  Skype was not allowed on AT&T's cellular spectrum, which Benkler says was unfortunate because Skype was this breakthrough technology. It had finally figured out a way to carry voice calls over the Internet.

• 23:03Speaker 02

  Skype innovated in a way that basically was, by many people, thought theoretically impossible. They didn't need permission. If they had needed permission from somebody who runs voice services to put the application on, they would not have gotten permission because it would have been considered too poor, too weak, can't work. And yet it did. But when Skype comes on the iPhone the first time, AT&T doesn't want it to be run in competition with its voice service.

• 23:32Speaker 05

  And to be clear, this app approval business is not confined to Apple. Benkler says Google has a long list of reasons it can reject an app for Android, its own mobile operating system. And the same goes for Facebook, which has a large community of developers who build products and services around Facebook.

• 23:50Speaker 02

  You have to persuade Apple or Google and Facebook to let you in. That's the critical point.

• 23:58Speaker 03

  And this is a very different sort of industrial structure than we imagined when we built the internet.

• 24:04Speaker 05

  That again is David Clark at MIT.

• 24:07Speaker 03

  So there's a kind of regulation or curation of the internet experience.

• 24:12Speaker 05

  And he admits that curation can have advantages. More control can make it harder for malicious software to get through. Clark says security is perhaps one thing he and others should have done differently when the internet was first being developed.

• 24:26Speaker 03

  One decision we made was that we wanted to make it possible for any computer to establish a connection to any other. On the other hand, it opens up a range of problems when all those other computers in the world try to attack you. Maybe it wasn't as important as we thought that it'd be equally easy for every computer in the world to talk to every other one. And in fact, I would say we sort of overempowered the user, if I can say that.

• 24:52Speaker 05

  And maybe those security concerns, whether they're from hackers or terrorists or government institutions, are what's driving some of the shift towards a more regulated, curated internet environment. The concern, Clark says, is that the degree of control that offers will simply allow companies to exploit their market share to make more money.

• 25:13Speaker 03

  And what we see today with the powerful players, and I consider Google and Apple and Facebook to be quite powerful players, is, I would say, a carefully thought through and not surprising attempt to build durability into their dominance. And then the question becomes, where does the next Google, where does the next Skype, where is the next platform going to come that won't need permission of somebody who's already there in power to let them in?

• 25:43Speaker 05

  Coming up on Freakonomics Radio, whether the net neutrality movement is really working.

• 25:49Speaker 07

  Ever since the internet was created, it's been organized around basic principles of openness, fairness, and freedom.

• 25:56Speaker 05

  And if the future of the internet were a dystopian novel, which dystopian novel would it be?

• 26:02Speaker 03

  We're not talking about Big Brother 1984 and all the misery. We're talking about something that's much more like Brave New World, and we are pretty happy on the whole day to day because we've more or less been shaped and manipulated to enjoy what we are enjoying.

• 26:24Stephen J. Dubner?

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• 27:09Stephen J. Dubner?

  Just head to granola.ai/freakonomics. That's granola.ai/freakonomics to get your time back. Try it for free at granola.ai/freakonomics. Freakonomics Radio is sponsored by Quince. You know those pieces in your closet that you find yourself wearing on repeat? The sweater that goes with everything? The perfect pair of pants? Or the tee you somehow always reach for first? Those are the pieces that make getting dressed easy, and that's what Quince does best. Quince focuses on high-quality wardrobe staples made with premium materials like 100% Mongolian cashmere, organic cotton, and merino wool.

• 27:52Stephen J. Dubner?

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• 28:31Stephen J. Dubner?

  Freakonomics Radio is sponsored by hotels.com. Hotels.com helps you find and book the right stay for work faster. With business preferences, save your travel must haves, like gym access or breakfast just once, then get tailored results whenever you search for work travel. Plus, with a free membership, you can save up to 20% on hotels and earn rewards on every stay for future travel. Book now at hotels.com. Visit hotels.com for details. The internet, in its relatively short history, has already evolved a lot. As we've been hearing on the show today, the shape and pace of this evolution was hardly foreordained.

• 29:15Stephen J. Dubner?

  Its architects intentionally created a wide open design that would encourage innovation. So far, most of this innovation has come from America, where the internet itself came from, primarily at least. This, too, was hardly foreordained. Here, let me read you a brief passage from a book called "How Not to Network a Nation: The Uneasy History of the Soviet Internet," by Benjamin Peters. In late 1970, a year after the ARPANET went online, the Soviet cybernetist Viktor Glushkov boarded a train from Kiev to Moscow to attend what proved to be a fateful meeting for the future of what we might call the Soviet internet.

• 29:58Stephen J. Dubner?

  The Politburo convened that day to hear Glushkov's proposal and decide whether to build a massive nationwide computer network for citizen use, or what Glushkov called "the all-state automated system," the most ambitious computer network of its kind in the world at the time. It was to connect tens of thousands of computer centers and to manage and optimize in real time the communications between hundreds of thousands of workers, factory managers, and regional and national administrators. But the Soviet internet did not happen. As Peters writes, "It was hardly for want of Soviet technical capability, but instead

• 30:39Stephen J. Dubner?

  because of, quote, 'entrenched bureaucratic corruption and conflicts of interest at the heart of the system.'" And so, the internet.

• 30:52Stephen J. Dubner?

  In America, meanwhile, a young Soviet-born computer scientist named Sergey Brin, whose father and grandfather were both mathematicians from the Soviet Union, Sergey Brin went on to be a co-founder of Google, a company that essentially owns huge swaths of the internet, which last year earned north of $50 billion in online ad revenue, roughly a third of the global total. So, as humble as the internet's beginnings may have been, the financial stakes have become very, very high. In fact, one reason that European governments are trying to rein in the dominance of tech firms like Google and Facebook and Uber is that the vast majority of profits of those

• 31:34Stephen J. Dubner?

  online platforms, even when used in Europe, are flowing back to American firms. But beyond the billions of dollars that are up for grabs, there's something perhaps even more valuable: human mind share. We began this episode with the police shooting and subsequent protests in Ferguson, Missouri.

• 31:59Speaker 08

  You must disperse immediately.

• 32:05Speaker 01

  There was all this talk on Twitter about what looked like real police overreaction.

• 32:12Stephen J. Dubner?

  Zenep Tufekci had noticed that while Twitter was full of Ferguson news, Facebook's algorithm and its emphasis on what people like had largely missed the protests.

• 32:22Speaker 01

  I would go to Facebook and I'd see nothing. And the fact that there wasn't even an editor to hold responsible and say, "You guys are designing a computer program that is making decisions that have significant consequences for what we as a public discuss," and I can't even tell what's going on, let alone ask somebody what is going on, was, to me, a very telling moment. These complex algorithms are having all these downstream effects that nobody is really thinking or systematically researching, partly because Facebook holds all the

• 33:01Speaker 01

  Private data and partly because it's so untransparent that it's hard to study. This is not saying Facebook was intentionally censoring Ferguson News. In fact, that would have been an easier story than we would have said, oh, how horrible. It's more complex. It's not that Facebook's censoring anything directly. It's that Facebook is unleashing these computer programs that are designed to make Facebook advertiser friendly and that are designed to keep us on the site.

• 33:30Stephen J. Dubner?

  We spoke to Tufekci a few weeks before some people began arguing that Facebook has been censoring news, or at least massaging it.

• 33:40Speaker 09

  Social media giant Facebook has been accused of censoring its news feed, according to former employees.

• 33:47Speaker 10

  Facebook being sneaky and telling you what to think? I bet you don't like that. Former Facebook staffers are accusing the social media giant of deliberately suppressing conservative news in its feed.

• 33:58Stephen J. Dubner?

  When you have a lot of control over an environment, as Facebook does, it must be tempting to shape that environment, if only subtly, a bit more to your liking. The incentives might be financial, or social, or moral, or some combination thereof. Google, for instance, recently stopped allowing ads for payday loans, the high-interest, short-term loans that we discussed in a recent episode called, Are Payday Loans Really As Evil As People Say? But what most troubles someone like Zenep Tufekci, who studies the social impact of technology, is how much of this technology is being, well, wasted. Back to Facebook.

• 34:36Speaker 01

  There's all these really smart engineers. They're the brightest computer scientists, and all they're thinking about is, how do I keep someone on Facebook for 10 more minutes? What's the exact combination of things that will keep them stay on the site as long as possible so that we can show them as much advertisement as possible? And given the amazing revolutionary, fascinating, disruptive potential of the internet, it really feels like a waste to have this much intelligence and smarts being used to figure out how to keep you clicking on 10 more animal videos.

• 35:19Speaker 01

  My goodness.

• 35:22Speaker 01

  Basically, Facebook is an environment in which you are structurally and architecturally encouraged to be positive and liking things. And that means that most people's feeds are dominated by happy news. You know, mine is dominated by engagements, marriages, new babies, doing cute things.

• 35:48Speaker 01

  And what I want to do is I want to tell my friend, I'm glad you had a baby. And of course, when I see one, I click on like. But Facebook interprets that as, show me even more babies. And that means a lot of other things I really care about and post about, they're hardly seen because the primary signal is this like button. And you might say, well, it's a company and the point of it is to make money. So of course, it's just going to try to keep you on the site. Well, that's true, except what this company is producing isn't just widgets. It's producing our new 21st century public sphere. If I want to connect to people all over the world, they all use Facebook.

• 36:33Speaker 01

  So I gotta be on Facebook too. There's this feedback cycle, which means Facebook is more valuable because a lot of people are already on Facebook.

• 36:44Speaker 11

  Facebook's mobile users are checking in, uploading photos and liking posts at record rates.

• 36:49Speaker 12

  As Facebook reaches its record amount of users in one day, over a billion people, we look back at what makes this social network so likeable.

• 36:57Speaker 13

  A 19-year-old burglar in West Virginia couldn't wait to check his notifications, so he logged on the computer inside the house he was robbing.

• 37:07Speaker 01

  In fact, they had a very interesting experiment in which Facebook was trying to figure out how hiccups in the program were affecting the users. So they made their mobile sites crash on purpose. And they wanted to know how many times they could crash it before somebody gave up using Facebook. But they couldn't make people give it up. People would just keep coming back. And the reason for it isn't some abstract thing. It's because that's where your friends and your family and your acquaintances are. Of course, you're gonna come back. It's a very human thing to connect with their friends, because there's no alternative. Look, I have to say, I've written articles about how great Facebook is for opposing authoritarianism.

• 37:51Speaker 01

  So it's not like I'm anti-Facebook. In fact, I care about it deeply. But it also feels dangerous, because we know from Facebook's own experiments that slight tweaks to its feed and its algorithm have the potential to influence things like voter turnout and have the potential to even throw close elections. And we know this from Facebook's own published research. If Facebook doesn't like a political candidate and tweaks a few lines of code so that its algorithm slightly suppresses positive stories about that candidate, even if you share them, people in your feed never see it, for example, you'd never know this happened.

• 38:36Speaker 01

  But it would have a global effect.

• 38:40Speaker 07

  Dear America, did you get my poke? Is it appearing on your wall? I'm not sure I'm using this right.

• 38:50Speaker 01

  I'm not saying Facebook is doing it. I'm just saying you'd never know. We don't even have any clue what's actually going on, what that algorithm's actually doing. So it's not just that Facebook is a significant public space. It's also a place where you can be effectively nudged by the central entity that has an enormous amount of data about you. Now, you have things like Twitter that create an environment that is not shaped by an algorithm, but they're under great pressure.

• 39:25Speaker 01

  By Wall Street to turn to a kind of Facebook algorithmic feed that is designed to make it more advertiser friendly. Advertisement is a teeny, tiny, tiny slice of human experience, but it's dominating our online experience. This seems ridiculous to me. And that, I think, has been the Internet's major turning point because the dilemma that Internet companies face as they were scaling up was which financing model to choose. And they could either try to charge the user some amount, or you could go with advertisers.

• 40:07Speaker 01

  They chose to add financing, which means you have to please Wall Street, and advertisers, which means you have to have a certain kind of experience online. So we, as Facebook's users, may have a moral claim because it's our content that makes the place run, but Facebook is responsive significantly to its advertisers. Think of all the things that can't be adequately addressed by a medium that is geared towards advertiser friendliness.

• 40:44Speaker 03

  And of course, there's only a certain amount of money that's flowing into the Internet.

• 40:48Stephen J. Dubner?

  That again is David Clark, the early Internet guy from MIT. The advertising model means that a lot of the Internet is free.

• 40:58Speaker 03

  Facebook is free, Twitter is free.

• 41:00Stephen J. Dubner?

  But that model comes with limitations, especially for startups.

• 41:04Speaker 03

  As more and more people build applications on the Internet and try to support those applications off of advertising, in some sense, there may not be enough advertising money to go around. Just as a rough number, there's an organization called the Interactive Advertising Bureau, which tracks how much money is spent on interactive ads. And very roughly speaking, in the United States, the amount of money spent per broadband household is about $45 a month. And if you're a broadband customer, you pay a... Certain amount of money a month for your broadband. In this country, it runs forty, fifty dollars a month for broadband internet access, which is to say that the totality of what I'm calling the free internet or the advertising

• 41:47Speaker 03

  support and internet experience is being supported on less money per month per household than you're paying for the broadband access. And there are big players in that space like Google, who are earning a lot of that money. Facebook is earning a lot of that money. So where's the money to support the small players coming from? And of course, there is a lot of tension around advertising because in order to show you just the most perfect ad for you, they are tracking your behavior, they are modeling you demographically, and people are very upset about the degree to which everybody in the world seems to know everything about you.

• 42:25Stephen J. Dubner?

  Does this discomfort mean that the internet's revenue model will change anytime soon?

• 42:30Speaker 03

  It's possible we're going to go to a different revenue model for the internet in which more and more of the application services that you use are in fact paid for by some sort of fee that you pay as opposed to being supported by advertising. And maybe some consumers would be happier with that because there might be less of this tracking of your behavior. On the other hand, maybe it's only privacy advocates who are worried about all that tracking. We don't quite know.

• 42:55Speaker 01

  At the moment, if I'm using a new service, I'm always looking for ones that have a small fee of some sort. I want to be their customer, right? I don't want to be advertised to or my data sold. So I'm trying to find things like that. And we need a new kind of innovation that allows a small amount of payment to be dispersed over the internet so that they're not all dependent on advertising. I know a lot of people want to use sites that are free. And I just want to say that comes with real costs.

• 43:31Speaker 02

  The way economists would talk about it is externalities. By using this very convenient streamlined framework, you are embracing a system that makes innovation and creativity and dissent a little bit harder. And the question becomes, how do we start to build systems? That will make it as convenient as possible to follow the practices that actually improve our innovation environment, improve our democratic or creative discourse environment, without making it so hard that essentially people constantly need to wear a hair shirt in order to make that happen.

• 44:16Speaker 02

  That's hard. That's a challenge.

• 44:22Stephen J. Dubner?

  So far, that challenge has mostly been handled by government regulators. The FCC, for instance, last year issued an open internet order to enact what it calls "strong, sustainable rules grounded in multiple sources of legal authority to protect the open internet and ensure that Americans reap the economic, social, and civic benefits of an open internet today and into the future." President Obama himself has been a cheerleader for net neutrality.

• 44:52Speaker 07

  Ever since the internet was created, it's been organized around basic principles of openness, fairness, and freedom. There are no gatekeepers deciding which sites you get to access.

• 45:02Speaker 03

  There's a fear, and I understand the fear, that powerful players who control the pipes or the wires to your house will somehow use the leverage to influence the experience you have and maybe selectively charge people for using the network or perhaps favor their own applications or their friends' applications over third-party apps.

• 45:26Stephen J. Dubner?

  The FCC's order prevents broadband and cellular providers from manipulating their networks in order to either punish or favor certain online channels. Benkler says he could see the FCC weakening Apple's control over the iPhone.

• 45:40Speaker 02

  You could imagine the App Store being so closely tied to the smartphone, which is so closely tied to cellular. That's something where you could see net neutrality extending one layer up.

• 45:54Stephen J. Dubner?

  This is not the US government's first attempt at leveling the online playing field. In 1998, the Department of Justice brought an antitrust case against Microsoft for bundling a Microsoft web browser, Internet Explorer, with its Windows operating system. Now, maybe you can't blame Microsoft for trying to monopolize web traffic, just as you couldn't blame a 19th century railroad baron for trying to monopolize rail traffic. But Microsoft did not get away with it. Facing a breakup of the company, it settled with the Justice Department, allowed other web browsers into its operating system.

• 46:31Speaker 01

  And so Windows basically ended up having to operate like a platform and getting the internet.

• 46:37Stephen J. Dubner?

  As it happens, Microsoft had already done a pretty good job of putting rival browsers out of business.

• 46:43Speaker 02

  The antitrust case essentially came too late. But the critical component was the fact that you actually had development of a free and open source software alternative in the form of Firefox.

• 46:55Stephen J. Dubner?

  Firefox is the browser developed by the nonprofit Mozilla Foundation. It has roughly 20% of US market share in browsers. But with more than 40% is the Chrome browser. Microsoft's Internet Explorer is still hanging on with about 20%. And then Safari has nearly 10%. Safari belongs to Apple. Chrome to Google. So no unfamiliar names there. But Yohai Benkler argues that the biggest challenge to an open internet is that most consumers just don't know much, or maybe care much, about how the online universe really works.

• 47:35Speaker 02

  Educating consumers to care about the information environment in the same way that they care about the physical environment in their consumption choices is going to be absolutely critical.

• 47:54Speaker 02

  I think finding a way to create some sort of a health or an ingredients label that some independent organization can say, here are the components of what goes in to your information product. Here's how they deal with privacy. Here's how they deal with creative innovation. Here's how they deal with work practices. That's in some sense the holy grail. Because once you actually find a way to standardize our understanding

• 48:33Speaker 02

  of what are the practices we find problematic and applying them to different services, the work of getting people to understand that they need to care about our information environment, no less than we need to care about our physical environment, will be a little easier. It's hard to shape consumer practices. It's hard to get people to recycle. It took years. It's hard to get people to care about the ingredients of what they eat. But it's possible. We've seen it done over and over again. At the moment, I'd say, people just don't know. And the critical first step is to get people to care and to find ways that are easy for people to read,

• 49:16Speaker 02

  that are a decent representation of the problems embodied by the products they so love.

• 49:25Stephen J. Dubner?

  In Benkler's view, and maybe yours too, the internet has the potential to create a more engaged and creative society. The risk, he says, is that gatekeepers and profiteers and others will turn it into a more passive ecosystem, less interactive than it could be, more like watching television.

• 49:47Speaker 02

  And that's the bad case scenario. We're not talking about Big Brother 1984 and all the misery. We're talking about something that's much more like Brave New World, and we are pretty happy on the whole day to day. And we don't know what the options are beyond that because we've more or less been shaped and manipulated to enjoy what we are enjoying.

• 50:07Stephen J. Dubner?

  You could argue that being manipulated to enjoy what we're enjoying is not the worst thing in the world. Perhaps the healthiest way to assess the internet at this moment in history is just to acknowledge that we can't really predict at all how it's going to keep evolving. Right? We humans are pretty bad at predicting everything else. Why should the future of the internet be any different? It's easy, and perhaps natural, to occasionally get hysterical about any new technology. And the internet, we have to remind ourselves, is still relatively new. Every time we learn that a terrorist group has used the internet to recruit members, there's a call to somehow

• 50:48Stephen J. Dubner?

  alter the internet to prevent that. But technologies themselves are pretty neutral. If I was the guy who discovered fire, you might have seen it primarily as a threat. "Hey, Dubner, get that out of here. You're gonna burn down the whole cave." It'd probably take me a while to persuade you that fire is actually pretty useful for cooking food and keeping warm. I think most of us would agree that the internet has proven pretty useful in certain doses and circumstances, but only a fool would think that you're not going to get burned now and again.

• 51:34Stephen J. Dubner?

  Freakonomics Radio is produced by WNYC Studios and Dubner Productions. This episode was produced by Christopher Wirth. Our staff also includes Irvic Gunja, Jay Cowat, Merritt Jacob, Greg Rosalsky, Caitlin Pierce, Alison Hockenberry, and Jolenta Greenberg. Our intern is Harry Huggins. Thanks again to Dataless for starting this conversation about the internet. Also, thanks to Tyler Cowen at Marginal Revolution for bringing to our attention Benjamin Peters' book, How Not to Network a Nation: The Uneasy History of the Soviet Internet. Of all functions the internet serves, perhaps none is more important to us than the ability to subscribe

• 52:15Stephen J. Dubner?

  to podcasts. So if you don't already subscribe to Freakonomics Radio on iTunes or elsewhere, please do so. And if you like this show, do me a favor. Share it with other people you think might also like it. You can find our entire archive on Freakonomics.com. Thanks for listening.

• 52:51Stephen J. Dubner?

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• 53:22Stephen J. Dubner?

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• 53:54Stephen J. Dubner?

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• 54:32Speaker 14

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