[female narrator] funding for overheard with evan smith provided in part by hillco partners, a texas government affairs consultancy, the alice kleberg reynolds foundation, claire and carl stuart, and by entergy. [evan smith] i'm evan smith, he's a legendary venture capitalist who profited greatly fm his early investment in facebook, but now considers the company the greatest threat to the global order in hisifetime. as he writes in his new book, "zucked: waking up to the facebook catastrophe." roger mcnamee, this is overheard. [smith] let's beest, is this about the ability to learn or his about the experience of not having been taught properly. how have you avoided what has befallen other nations in africa? yohicould say that he madown bed, but you caused him to sleep iit. you saw a problem and over time took it on. let's start with t sizzle before we get to the steak.

are you gonna run for president? i think i just got an f from you actually. this is overheard. (audience clapping) [smith] roger mcnamee, welcome. [roger mcnamee] it great to be here. [smith] congratulations on-- [mcnamee] thank you. [smith] --on this book. words matter, right? words , the words we choose matter. catastrophe? really? not problem, not concern, not something a little bit more muted, catastrophe. [mcnamee] it is a catastrophe, evan, because it is not done. we're still metastasizing -- [mc[smith] oh, a catastrophe, eva there's more, still?done. [mcnamee] that's the issue -- [smith] the problem is it's gonna get worse. [mcnameersit's already getting we have to look beyond facebook to see all the other things that are going on. facebook was effectively the signal. it's the thing that told us we could no longer trust technology the way we had for fifty years before this. [smith] right, so let's stipulate that this book, while focused on facebook, also calls out google. this. [mcnamee] yes, very much s whi [smith] it callsebook, als out other actors.. this. regular presences in all of our lives, [smith] we don't thinknted. about the potential dangers of our association to those things, but y e book is really largelout facebook.

[mcnamee] it is. [smith] and the bill of particulars, the bill of chaes against facebook that you levy is pretty long. they surveil our evy action online. they monetize our privacy, they foster hate speech, they damage the public health, they undercut our democracy and all of it wrapped under this idea which i e ve, of productizing nsumer which is us. amee] yes. [smith] they've turned us into a product. [mcnamee] into basically a digital avatar. a data avatar, andso in tht us into a product. they say in advertising, hey, you're not the customer you're the product, and the prlem is on facebook or on google or on amazon or microsoft you're the fuel. you're basically this reservoir of data. and they suck it out and they monetize that data. u, sometimes directly to and soe your data to create value at the expense of everybody else. [smith] is the problem that this was not the point all along? and at some point it became the point, or was it the point all along only they

didn't tell us and we didn't know? [mcnamee] so i think google understood where this was going verywivery early on. i think facebook it evolved. y [mcnand essentially, thegle unde think about it iswas going mark zuckerberg is an idealist, and he believed -- [smith] you've known him for now -- [mcnamee] since he was 22. [smith] 13 years? you meet him in 2006 for the first time? [mcnamee] yeah, so i knew him at 22, and he was such an idealist. and he believed that connecting everyone in the world was so important at it justified any actinecessa. an tthere is the flaw. its notion that you're going to get problems as you did in myanmar, a country of 50 million in asia -- [smith] boy, you're comparing facebook tmyanmar now. [mcnamee] well bear with me for a sec. so facebook is the only internet in myanmar, it's the only media there.. and when the authorities used it to essentially do hate speech against a religious minority it triggered what the un called a classic hnic cleansing. and at facebook, everody went hey,

you know, we didn't cause it, yes, 9,000 people died, 42,000 people are missing and presumed dead but that's just a cost of our growth. [smith] your point is that facebook in that case was every bit as muchf a bad actor as the government that perpetrated this? [mcnamee] no, i'm saying that they enabled it and their reaction to it was not to leap to the defense of this poor benighted minority. but rather to say, i'm sorry, that kind of stuff happens. mtih] and, i think most importantly, as a theme of this book emerges, once confronned with what they had whether their intentions were good or bad, an and they were given pportunity to change, they didn't. [mcnamee] they did not, because again the goal is to connect the whole e rld and everything e just noise. [smith] so you'll stipulate thathe goal is to connect the whole world, the goal is not the bad stuff. [mcnamee] no and in fact, i would argue these are good people. it's the culture that they ve in. and this is a culture that begins with a country where we've deregulated all business. so we essentially have no rules that business

wit operates under, and've der then in silicon valley you have this culture that changed in the early 2000s to ttreme focus ononquering the world and creating monopolies and dominating, becoming billionaires, which was very different from the silicon valley of the '50s, '60s, '70s, '80s, and '90s. and in that context this notion of we have a vit on, we will pursuelentlessly, and you basically don't worry about consequences. and i look at this and i go, these are good people but they aren't ing well advised by their board of directors, by their parents, by their friends. there are all kinds of pple in their lives who could say hey guys, hang on, slow down. there are other things that matter here -- [smith] well, some people, but some people are saying, there are other things and you are one of those people who at certain points said it. the problem is as much that they're not listening-- [mcnamee] that's true. [smith] -- as that they're not being told. [mcnamee] which is also part of the culture. because remember, there have been critics all the way along, but the crits always appeared to be wrong, so they developed this internal cultural thing

of if critic, then wrong, and i'm sure n en i first went to themtober of 2016, buthey knew i was a friend they looked at me and said, "roger, if you're so smart, where are your two billion members, where are your billions in wealth?" [smith] right, you went from being a friend to a critic who was ] erefore wrong. [mcnamd therefore wrong. [smith] right, so let's go back, before we get to 2016, let's go back to 2006, so we mentioned this earlier. meet mark zuckerberg, he's 22 years old. you are in the offices of your firm, elevation partners, on san road in the heart of silicon valley. he comes to [mcnamee] so imagine, i'm 50 years old. i've been in the tech world half of my life. my entire professional life -- [smith] you've mple like him before, right? [mcnamee] i had been very close to steve jobs, to bill gates, to gordon moore. so all of the legends of silicon valley because i got there before the pc industri really happened. so i oot to grow up with athem. [smith] right, your contemporaries. [mcnamee] exactly, and so, these were my friends and by the time i was introduced to mark,

fait was because he wang a crisis and he needeto talk to somebody who was really experienced and not confcted. [smith] right now by crisis, we mean yahoo! wanted to buy facebook for a billion dollars. [mcnamee] i did not know tha- [smith] yeah, it's a hell to buy facebook for a billion dollars. of a crisis by the way, i wish i had such a crisis. [mcnamee] well, exactly. but you have to remember, the company had essentially no revenues and he had, in my opinion, the best idea i'd seen since google. even though it was just for college students and high school students it only had your picture, your name, your address and your relationship status, there was no new feed, it wasn't -- [smith] it was vermodest a. [mcnamee] it was very, i mean practically no revenue. and so, when he comes in to see me, i say "mark, b you say a word, you gotta let me give you some context for why i took this meeting,ecause i think you have the most important company since google, even though you don't have any revenues yet and you're a teeny littl thing.e he had authenticated identity, this notion you had to have your email address from school. at would prevent trolls, and that was the thing that had killed every social network before.

anonymity allowed people to behave badly and to bully others. and so he had solved that problem. anyway, i start thing out g "if it hasn't already happened, either microsoft or yahoo!'s gonna offefaa billion dollars fobook and everybody you know is gonna tell y anyway, i go on for two minutes giving him why i thought i hoped he woud n't do it. what follos the most painful five minutes of my entire life. we're in this totally silent room. and i've just laid this really heavy thing on him. i'm expecting a reaction, and i t dead silence. i get thinker poses. and it goes on. the first minute i'm thinking, wow, he's really respecting me, he's really thinking about this. at two minutes, i'm going no, [smith] something is wrong here. t five minutes, at which point i'm literally ready to burst.e. and he finally goes, "you won't believe this is the reason m here is the thing you just said is e what's going on, it's why i'm here, one of those companies offered me a billion dollars, everybody behawad that way." he didn'a sell, the reason it was a crisis was because he didn't wanna sell theny, and everybody wanted to. and he did not know how to sort of bring them down.

and so i helped him do that, the whole meeting in the end, spoiler, you persuaded him in the end not to sell. [mcnamee] no no, he was, he didvet want to. what i im was the half -- [smith] you affirmed his -- [mcnamee] i gave him i gave him the path for how to convince everybody else not to sell. and so the result of that was for three years thereafter, i was one of his mentors. and he had a bunch at the time. because he had peter teal, and he had don grant from the washingto the founder of netscape, so i was just one of many. but i helped him on his team because everybody else wanted to sell the company, so he needed to replace 'em and his bod been going along with it. so he needed somebody who could help him do that. and i brought sheryl ndberg into the company. that was the big thing that i wound up doing. [smith] you had rnt her through the gont door, did you not? [mcnamee] it was unbelievable. it was even weirdethan that. so i was, in 1998, advising the grateful dead on their technology strategy after jerry garcia died they needed some help, so they came to me

and said "can you help us?" [smith] where would i go, i would go to you. [mcnamee] they would come to me, and sheryl sandberg was the chief of staff to the secretary of the treasury and she was wo [smith] larry summers. [mcnamee] larry summers. so in 1999, they're workg to forgive debt that would never be repaid bymerging countries around the world and this was sort of a gift from major ctrntries to emerging cos for the millennium. and bono had had this idea and sheryl helped him execute it. it was one of the great humanitarian things of os lifetime. so bono s sheryl, "i hear there's this guy working with the grateful dead and he's creating this thing for bands to sell directly to their fans. i need to meet him. do you know who he is?" and shers, "well i've never met him but my brother-in-law works for him and he'sng on that project." it was just pure coincidence. [smith] weird coincidences, people know people, right -- [mcnamee] so she introduces me to bono and then bono and i beco busine3 and then i introduce sheryl to mark sandberg. so it all comes full circle. [smith] so the firm that you are credited over the many years with running and leading

and such an fluential footprint within the silicon valley and the technology universe is elevation partners. it's you and it'bono as two of the leads. [mcnamee] exactly. and fred anderson who was the cfo apple who had saved the company from bankruptcy, brought steve jobs back in. [smith] so sheryl sandberg introduces you and bono and that becomes a major part of your life. you introduce sheryl sandberg to mark zuckerberg. [mcnamee] he bomes a major part of her life. [smith] he becomes a major part of her life. [mcnamee] which explains why -- [mcnamee] and this is why i become so fond of facebook, right? because, you knotm if you're in the invt business, and a company's really successful, and you oun see a portion offingerprint on it, that's a big deal, because it's all you can do. [smith] i actually love the fact that in the back of this book as an appendix is the memo that you write to mark zuckerberg and sheryl sandberg a month behe election -- [mcnamee] actually nine days before the election, nine days. [smith] well tally in the previous month, but only nine days before they election. u write them a memo saying basically, well it begins with "i'm really sad about facebook"

and you lay out these great concerns about facebook's role in undermining our democrac-- [mcnamee] and civil rights. [smith] and civil rights. and giving bad actors a way through the facebook platform to adversely affect all of our lives. [mcnamee] that the advertising toolam that work so great for marketers also work really well for bad actors wha harm innocent people. [smith] and again the point here is not just that facebook is causing harm through s platform but that it is knowingly causing harm and choosing not to do anything about it. [mcnamee] to be clear, i didn'tssnow that they, i wasn'tting that in the memo, in the memo i assert to them, i think there's something wrong with the business model and the algorithms. i assumed they were the victim when i wrote it. [smith] et's, but here, i underlined what i thought is the key takeaway from this. again, before the 2016 election, "facebook is enabling people to do harm. it has the power to stop harm." [mcnamee] right. [smith] "what it currently lacks is an incentive --" [mcnamee] to do so, and i thought when i was saying that. that i might be the first

[smith] well, this is where they come back and they say he's now a critic. thereeore he's wrong. [mcni spent three months privately begging them to do what johnson and johnson dir the tylenol poisoning in 1982. some guy put poison in bottles of tylenol in chicago, illinois. bunch of people died, and the ceo of n and johnson, the very day the news broke, pulled every bottle of tylenol off every shelf in america. and he said "we're going to protect our customers. we didn't canne this, but we're protect them." no questions asked, nobody has to win. it's what boeing should have done wi the 737 max. it's what facebook should have done here. and you haveleap to the de. because there's no way to avoid the downside. so what you wanna do is to try to use that to demonstrate to people your humanity. [smith] instead what happens? you write this memo to zuckerberg and sandberg, and instead they pass you off to an underling, whose response is basically -- [mcnamee] his response is, "the law says we're a platform not a media company, therefore wee not responsible for what third parties do." and i go, "dude, this is a trust business."

if the people who use your product decide you're responsible, there is no law on earth that's gonna protect you. the same issue that the tylenol guys faced. [smith] and you make tu point, in fact, in this book, that the story of facebook, as you tell it, is a story about trust. it's a story about privilege, and it's a story about power. and n each case, those stories as they converge ultimately reverberate back on all of us in a very negative way. [mcnamee] exactly. and the thing is, if they don't blow this part of it then the issues that are in their busmodel that you can't see would have remained hidden a lot longer. right, by blowing the things in the election context, they basically caused everyone in journalism to take a really close look, and while they're at it they look at google, they look at twitter, they look at youtube -- [smith] the entire tech industry is turned upside down because of facebook. [mcnamee] well, it would have happened eventually but this for sure accelerated it. [smith] so you make a big point in this book about talking about civic responsibility. and how facebook somehow does not put civil responsibility first. [mcnamee] i don't think anyone

in tech does. [smith] so let me play devil's advocate. [mcnamee] yeah. [smith] these are for-profit companies. why the hell do they have any civic responsibility? [mcnamee] it's a great qstion. [smith] the job of a for-profit company is to maximize value for shareholders. they're not eleemosynary organizations, they're companies.mpanies e civic responsibilities, so goes the devil's advocate theory. [mcnamee] exactly, and my response is, when i started in my career the u.s. had a different philosophy of business. thera man named peter f. trucker who was the management guru of the time. and he always feached that there wee stakeholders. shareholders, but also emploes, the communities where employees live, thcustomers and suppliers.'re n. but it's this notion that it's only about the shareholder produces this very short term orientation we have ich results in people getting laid off indiscriminately, towns being abandoned, and my point is there was a time when the economy wabloated

and we needed to tighten things u i'll call that 1981 to say '95, whuce that was demonstrablyssful for most people. and then there's a period of time where it doesn't work quite as well. and i think we can argue, probably comfortably, that now it produces these really weird outcomes like we do a massivecut fors and instead of them investing in building plant and equipment, they just buy stock back. [smith] right. [mcnamee] and that, i think, you know objectively is not the best interest of the economy. and i think therefore not the best interest in the amepeople. and my point to you, evan, is not that i'm right about this but that wathaven't had this dfor 40 years. and i would like us to have the debate again. because the country's very, it's divided. and it's divided over issues that really deserve debate. [smith] you know i would argue, actually, we're startingo have that debate. you know, alexandria ocasio-cortez on line one, right, i mean are we not having a conversation around capitalism? because i mean i came to the tribune festival last year,

right? and it was going on all around me. [smith] you heard in austin, and you hear in other places when you travel around the country, the beginnings of a bigger conversation, knitted together that is finally doing what you want. [mcnamee] here's the funny thing. i'm doing a book tour. i remarkably have done eight appearances on fox channels, and eight appearances on nbc channels. snbc and cnbc. [smith] right. down the middle solves the riddle, right? [mcnamee] well, what's really interesting is that my basic pitch which is that we need to ask the questions about why is it, that our most personal data. so think about this is, your credit card transactions, your location, your web browsing history, and your health information from online sources, why are third parties allowed to trade that without your permission? i doink that should be legal, okay? we've never actually had that conversation. and why is it okay for people who give you email services or application services to scan your p content for their own

economic gain? i mean, we've never had those debates. and what's interesting is if i go to fox, if i go to msnbc, everybody's dding their head going your right, why is that okay? [smith] well this isthdata privacy is one oe things where the left and the right kind of come back around. [mcnamee] and my point is right in a time when we're polarized we wanna find issues that remind us that we're american. [smith] right. so hating on facebook is a bipartisan issue, in that sense. [mcnamee] i don't think it's about hating on facebook. beca? e i like the people, okm saying i think this is about pushing back on a culture a business model that lost its way, that basically treats us as a fuel source ead of as people. and the funny thing about this is that when you sit down and talk to people about it we don't h give up what we like about these products. what we ve to ask them to do is to give up the part of their business that har s us, that makes thridiculously over-profitable and harms journalism, media of all kinds, and will eventually harm

the auto industry, the banking industry, the energy industry.ds, and [smith] well let's just stick with two people on the wrong end of this relationship. wo industries, journalism and the democracy part of all of our lives. on urnalism you actually call out facebook for undermining the free press. [mcnamee] for sure. [smith] explain in short form how it is you think facebook undermines the free press. [mcnamee] so facebook and google have the same thing. so what they did was they provided really compelling, really convenient services so what they did to people and they get all of us, i mean literally everyone on their services. they then systematicallgather all the data known out these people, including going to your credit card processor to get your credit card transactions, to your cellular phone company to get your cellular lotion data. they have literally perfect information. so if you're a markete or a media company. you have to go through them to find your audience. [smith] and we as consumers are going to be served messages that align with our behaviors. [mcnamee] and we want everytng served through

this portal controlled by these guys. and so h ye's the the problem 're journalism. basically, the deal these guys offer is uryou have to give me ontent for free. i'm gonna monetize it with ads [smith] the economic distress of journalism is the thing tha undermined the free press. and then economic distress has happened a consequence of the behavior of the facebooks of the world. [mcnamee] and if that was all they did, that would be fine. but they keep changing the rules so tha athe press invests hing like video. they had this big tideo thing. [smith] pi to video. [mcnamee] and then they pulled the rug out from everybody under that, and so now they're all ying to make up for it with these local things. and i wanna see what they do. because conceptually they could do something valuable in local coverage. [smith] yeah, but the amount of investment thld need to revive local news is enormous. [mcnamee] we, they would also need to have a change in culture, right? and so i'm looking at this -- [smith] first things first. [mcnamee] rit t, but evan, the poat i think we wanna take on this is that it's not just journalism. i mean you go into a thing, and every once in a while

they would say, we wanna see if you're a robot or a human, so identify these pictures right? an're always of transportation, right? it's like cars, buses, street signs, in you've seen those ? [smith] yes.tation, right? [mcnamee] and that's to define whether you're a human or a robot. the truth is that's not what you're doing. what you're really doing is training the ai, the artificial intelligence for google self driving cars. that's why tho m things have gotten h harder. [smith] you understand you are creeping me out. [mcnamee] yeah, i'm trying, i'm trying. they know you're a human because the way your mouse moves. [smith] alt, let me quickly go to democracy. i'm just gonna do the democracy part of this in 30 secooger. what, in 30 seconds, what did facebook do to our democracy in our last electi? [mcnamee] well, fundamentally they created these tools that allowed the russians to essentially interfere in our election and one campaign to suppress votes in the election for such a ludicrously low cost because the targeting was perfect. the russians hit 126 million americans, very specifically targeted out 137 million voters.

and they hit 20 million people on instagram. and they did that for less than the price of a fighter aircraft, so they influenced the outcome in our democracy and the outcome in the united kingdom referendum over brexit. [smith] but that assumes that the end-user is susceptiblecome to that kind of -- [mcnee] remember, the goal of this whole sort of thing is to cause dismay about democracy, right? so the point is not to move you from one side to the other. the point is to make you feel less confident in democracy and to cause many people not to vote. the core thing, and where it was really successful and the greaght that was brought to bear was that if you had the cambridge analytica data set which was 30 million facebook people tied to their voter idstaut of 137 million voters, you could suppress enough votes to change outcomes in some jurisdictions. anhathat almost certainlened. [smith] has there been a sufficient, in the remaining minutes we have, a sufficient takeaway from this that prevents this from happening in the next election?

[mcnamee] here's the good news. in 2018, there were three groups, the trump campaign had a genius strategy. and they focused on suburban white women, lipeople of color, and idic young people. the ones that the russians had really focused on. they suppressed a lot of votes there. four million people voted for obama in 2012 didn't vote in 2016. but in 2018, three groups had big surprise on turnout -- [smith] women, people of color and young people, right. [mcnamee] those three exact groups. so i think we're learning. and the critical thing is, weave to watch. because election interference can both happen in a lot of other ways. they can turn off the electcity, right? they can hack the voter machines. so the danger here is not the russians. it's anye dy can do this. ths a campaign in california for school board where one of the candidates hired an israeli psychological erations firm to swing a school board election. [smith] yeah. [mcnamee] i mean, this can literally happen at any scale. [smith] you cannot makehis stuff up. [mcnamee] this is not democracy and we need to take it back. we need to go to paper ballots and all that.

[smith] yeah, okay, game show speed round for the last minute. shsold we break up the big al networking companies? [mcnamee] so, probably. the absolute thing we ve to do is they cannot be allowed to block competitors. they can't be oslowed to share data aproducts. they can't be allowed to make a market and then also ipate in it. and all three of the big guys, facebook, google and hoazon do all three of things. [smith] so probably to breaking it up. then it sounds like the answer is yes ore restrictive regulatory environment. [mcnamee] well, i wanna do teddy roosevelt. i wanna do the teddy roosevelt, 1900 breakup, that model which wasbout just creating more entrepreneurship-- [smith] and more competition. [mcnamee] and incredibly, we have candidates who have come out with that. elizabeth warrenng is classic teddy roosevelt. klobuchar is basically going with the same thing, and incredibly ted cruz, your oator from here in texas seems to be at least open to that same idea. ou and josh holly from mi, there are a number of others. i've been working with the antitrust division to the justice department, i've been working with the federal trade commission, because pretty much

everybody knows we gotta do something. and antitrust in tech has [smith] well honestly, that's a big move int he right direction, jat. the fact that there's an acknowledgement of the problem. [mcnamee] totally, and my point is, it's pro-growth. so everyikes it. [smith] last question, should we all get off facebook? [mcnamee] t. i've got a book i'm trying to sell to people on facebook and instagram. [smith] oh my god! [mcnamee] no, i can't be a hypocrite. i can't be a hypocrite. and the proble- [smith] who's monetizing now, roger? [mcnamee] i want to reform them, right? i've changed my habits. i don't use messenger anymore. i don't do any political stuff. i've gotten off google almost entirely. and you know, i do think you wanna change your behavior. use other products, don't let them own your life. [smithceokay, that's a good po end. roger, i wish you great success with this book. it is so fun to talk to you, you have made me so much smarter in 30 minutes. t. [mcnamee] evan, i lovethank . [smith] roger mcnamee, thanks so much. (audience clapping) [smith] we'd love in have you join us he studio. visit our website at klru.org/overheard

ind invitations to interviews, q&as with our audience and guests, and an archive of past episodes. [mcnamee] mark zuckerberg came out a couple weeks ago and said they're gonna turn everything into end to end encryption so it looks like messenger whatsapp. and he puts this forward like he's looking oufor our privacy. what's really going on is that his big problem is that he is home hate speech, he is home to disinformation, he is a home to conspiracy theories. and if you encrypt end to end, he's no longer responsle because he can no longer tell what you're doing. [narrator] funding foroverhearh is provided in part by hillco partners, a texas government affairs consultancy, the alicatkleberg reynolds foun, claire and carl stuart, and by entergy. (pleasant music)

♪ robert: storm watch. i'm robert costa, welcome to "washington week." hurricaneorian heads toward florida and p psident tt mp reassures residents his administration is ready president trump: our highest priority is the safety and nsecurity of t peoplehe path of the hurricane. robert: political storms hover. uncertainty other his trade war with china keeps investors. on ed director james comey is back on. followg a watchdog report. and democrats face storms too. as the iowa caucuses a a suddenly challd. next. >> this is "washington week." funding is