emale narrator] funding for overheard with evan smith is provided in part by hillco partners, a texas government affairs consultancy, the alnde kleberg reynolds fion, claire and carl stuart, and by entergy. [evan smith] i'm evan smith, he's a legendary venture capitalist who profited greatly from his early investment in facebook, but now considers the company the greatest threat to the global order in his lifetime. as he writes in his new book, "zucked: waking up to the facebook catastrophe." he's roger mcnamee, this is overheard. [smihi] let's be honest, s about the ability toeearn or is this about th experience of not having been what has befallen other nations in africa? you could say that he made his own bed, but you caused him to sleep in it. you saw a problem and over time took it on. let's start wth the sizzle beforee get to the steak.

are you gonna run for presiden i think i just got an let's start wth the sizzle bef f from you actually.. this is overheard. (audience clapping) [smith] r mcnamee, welcome. [roger mcnamee] it's great to be here. [smith] congratulations on-- [mcnamee] thank you. [smima] --on this book. worder, right? words matter, the words we choose matter. catastrophe? reaot problem, not concern, not somethinttle bit more muted, catastrophe. [mcnamee] it is a catastrophe, evan, because it is not done. we're still metastasizing -- [smith] oh,ere's more, st? [mcnameethat's the issue -- [smith] the problem is it's gonna get worse. [mcnamee] it's already getting worse. we have to look beyond facebook to see all the inher things that are 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 focu facebook, also calls out google. [mcnamee] yes, very much so. [smithalls out other actors. regular presences in all of our lives, things we take for granted. [mcnamee] things we love. [smith] we don't think about the potential dangers thi of our associationnted. [mc to those things,love. but the book is really largely about facebook.

[smith] and the bill of particulars, the bill of charges against facebook that you levy is prty long. they surveil our every 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 love, of productizing the consumer which is us. [mcnamee] yes. [smith] they've turned us into a product. [mcnamee] into basicaldigit. [mcnamee] yes. a data avatar, and so in that context they say in advertisinst hey, you're not the er you're the product, and the problem is on facebo 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. sometimes directly to you, and sometimes they use atyour data to create valu the . [smith] is the proem that this was not the point all along? and at some point it became the point, or wast the point all along only they

didn't tell us and we didn't know cnamee] so i think google or wast the point understood where this was going very, very early on. ivohink with facebook ited. and essentiallt the way to think about mark zuckerberg is an idealist, and he believed -- [smith] you've known him for w -- [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. ie [mcnamee] yeah, so and he bd that connecting everyone in the world was so important that it justified ety action necessary tohere. and there is the aw. it's this notion that you're going to get problems as you did in myanmar, [smith] boy, you're comparing facebook to myanmar now. [mcnamee] well bea 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 int do hate speech against the a religious minority and at facebook, everybody 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 febook in that case was every bit as much of 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. [smtih] and, i most importantly, as a theme of this book emerges, once confronted with what they had done, wheteir intentions were good or bad, and they were given an opportunity to change, they didn't. [mcnamee] they did not, because again the goal is to connect [smith] so you'll stipulate that the goal is to coect the whole world, the goal is not the bad stuff. the bad stuff is the means ton end. [mcnamee] no and in fact, i would argue these are good people. it's the culture that they live in. and this is a culture that begins with a country where we've deregulated all business. so we essentially have rules that business

operates under, and then in silicon valley you have thiure that changed in the early 2000s on to this extreme focusonquerd then in silicon valley eating monopolies and dominating, becoming billionaires, which was very different from the silicon valley of the '50s, '60s, '70s, '80s, and '90s. and in that contextthis nof we have a vision, we will pursue it relentlessly, and you basit lly don't worry abnsequences. and i look at this and iplgo, p by their board of directors, by their parents, by their friends. there are all kinds of people 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, and you are one of those people who at certain points said it. the probl is as much that they're not listening-- [mcnamee] that's true. [smith] -- as that they're t being told. [mcnamee] which is also part of the culture. because remember, there have been critics all the way along, but the critics always appeare to be wrong, so they developed this internal cultural thing

of if critic, then wrong, and i'm sure when i first went they knew i was a friend, but they looked at me and said, members, where are your billions in wealth?" [smith] righ went from being a friend to a critic who was therefore wrong. [mcnamee] and therefore wrong. [smith] right, so let's go back, before we geto 2016, let's go back to 2006, so we mentioned this earlier. you meet mark zurg, he's 22 years old. you are offices of your firm, elevation partners, heon sand hill road in thet of . he comes to see you. set the scene. [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 met people like him before, right? [mcnamee] i had been very close tsteve jobs, to bill gates, to gordon moore. so all of the legends of silicon valley because i ere before the pc industry really happened. so i got to grow up with all of them. [smith] right, your contemporaries. [mcnamee] exactly, and so, these were my friends and by the time i was introduced to mark,

it was because he was facing a crisis and he needed to talk to somebody who waseally experienced and not conflicted. [smith] right now by crisis, we mean yahoo! wante to buy facebook for a billion dollars. [mcnamee] i did not know that-- [smith] ye's a hell 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 ithad your picture, your name, your address and your relationship status, there was no new feed, it wasn't -- [smith] it was very modest at that point. [mcnamee] it was very, i mean practically no revee. and so, when he comes in to see me, i say woark, before you say , you gotta let me give you some context for why i took this meeting, because i think you have the most important company since google, even though you don't have any revenues yet and you're a teein little thing." i because he had authenticated identity, this notion you had esto have your email adfrom school. that 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. that had killed every social network before. anyway, gstart this thing out ng "if it hasn't already happened, either microsoft or yahoo!'s gonna offer a billion doars for facebook and everybody you know is gonna tell you to take t money." anyway, i go on for two minutes giving him why i thought i hoped he wouldn't do it. what followed was the most paiy ul five minutes oftire life. we're in this totally silent roo and i've just laid this really heavy thing on him. i get thinker poses. and it goes on. the first minute i'm thinking, wow, hhe's really respecting ms really thinking about this. at two minutes, i'm going no, this is just reay weird. [smith] something is wrong here. [mcnamee] it's really weird, anyway, it goes on for almost five minut which point i'm literally ready to burst. and he finally goes, "you won't believe this is the reason i'm here is the thing you just said is exactly what's goin, it', "you won't believe this one of those companies offered me a billion dollars, everybody behaved that way." didn't wanna sell, the reason it was a crisis was because he didn't wanna sell the company, and everybody wanted to. and he did nothow to sort of bring them down.

lasted half an hour -- [smith] and you persuaded him pein the end, spoiler, youuadedd not to sell. [mcnamee] no no, he was, he didn't want to. what f gave him was the h [smith] you affirmed his -- [mcnamee] i gave him i gave him th 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.e and he had a bunch at the time. because he had peter teal, and he h don grant from the washington post and marc andreessen under 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 ang his board had been goong with it. so he needed somebody who could help him do that. and i brought e eryl sandberg into mpany. that was the big thing that i wound up doing. [smith] you had met her througthe government door, did you not? [mcnamee] it was unbelievable. it was even weirder than 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. was the chief of staff to the secretary of the treasury and she was working with bonfrom u2. [smith] larry summers. [mcnamee] larry summers. so in 1999, they're working to forgive debt that would never be repaid by emerging countries around tof world and this was sor gift from major countries to emerging countries for llennium. and bono had had this idea and sheryl helped him execute it. it was one of the great humanitarian things of our lifetime. so bono says to sheryl, "i hear there's this guy working with the grateful dead and he's creating this tng for bands to sell directly to their fans. i need to meet him. do you know who he is?" ved sheryl goes, "well ever met him but my brother-in-law works for him t d he's working on toject." it was just pure coincidence. [smith] weird coincidences, people know people, right -- [mcnamee] so she it introduces me to bononce. and then bono and i become business partners in 2003 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 influential footprt within the silicon valley and the technology universe is elevation partners. it's you and it's bono as two of tle leads. [mcnamee] ex and fred anderson who was the cfo at apple who had saved the company from bankruptcy, brought steve jobs back in. [smith] so sheryl sandberg introduces you and bono and thomes a major part of your life. you introduce sherylandberg of her life. [smith] he becomes a major part of her life. [mcnamee] which explains why -- [smith] she becomes the coo of facebook. of h [mcnamee] and this [mcn is why i becomeains why -- so fond of facebook, right? and a company's really successful, and you can see a portion of your fingerprint 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 [mcnamee] actually nine days before the election, nine days. [smithrewell technically in theous month, but only nine days before they election. and you write them a memo saying basically, ll it begins with "i'm really sad about facebook"

and you lay out these great concerns about facebook's role in undermining our democracy -- [mcnamee] and civil righgh. [smith] and civil . and giving bad actors a way through the facebook platform to adversely affect all of our lives. [mcnamee] that the advertising tools thatso great for marketers also work really well for bad actors who wanna harm innocople. [smith] and again the point here is not just that facebook is causing harm through its platform but that it is anowingly causing ha choosing not to do anything about it. [mcnamee] to be clear, i didn't know that they, i wasn't asserting moat in the memo, in the 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. ,mith] well let's, but hei undt is the key takeaway from this. you write that mark zuckerberg and sher sandberg, again, before the 2016 election, "facebook is enabling people to do harm. it has the power to stop harm." [mcnamee] right. [mcnamee] to do so, and i thought when i was saying that. that i might be the first person to tell tm that.

[smith] well, this is where they come back and they say he's now a critic. therefore he's wrong.mo[mcnames privately begging them to do what johnson and johnson the did after the tylenopoison. some guy put poison in bottles of tylenol in chicago, illinois. bunch of people died, and the ceo of johnson and johnson, the very dayd he news broke, pulery bottle of tylenol off every shelf in america. and he said "we're going to protect our customers. we didn't cause this, but no questions asked, nobody has to win. it's what boeing should have done with the 737 max. it's what facebook should have done here. and deu have to leap to thnse. 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 ansandberg, and instead they pass you off to an underling, whose response is basicay -- [mcnamee] his response is, "the law says we're a platform not a media company, therefore we're not responsible [mc for what thirdonse is, "th parties do." and i go,form "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 the point, in fact, in this book, that the story of facebook, as you tell it, is a story about trust. it's a about privilege, and it's a story about power. , and that in each caose stories as they converge ultimately reverberate back on all of us in a very negative way. [mcnamee] exactly. and tn' thing is, if they blow this part of it then the issues that are in their business model that you can't see would have remaihidden a l. 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. w 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 question. [smith] the job of a for-profit company is to maximize value r shareholders. it's to make a buck. they're not non-profits. they'rtinot eleemosynary organis, they're companies. companies don't have civic responsibilities, so goes [mcnamee] exactly, and my response is, whtarted in my career the u.s. had a different philosophy of business. there was a man namedter f. trr who was the management guru of the time. shareholders, but also employees, customers and suppliers. they're not equal. 's this notion that it's only about the shareholder uces this very short term orientationese have which results in people getting laid off indiscriminately, towns being abandoned, and my point is there was a time when the economy was bloated ings up.needed to tighten

i'll call that 1981 to say '95, where that was demotrably successful for most people. and then there's a period of time where it doesn't work quite as well. and i think we can argly, probably comfort that now it produces these really weird outcomes like we do a massive tax cut for corporations d instead of them investing in building plant and equipment, they just buy stock back. [smith] right. [mcnamee] and that, i think, you know objectively the best interest of the economy. and i think therefore not the best interest inanhe american people. my point to you, evan, is not that i'm right about this but that we haven't had this debate for 40 years. 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 starting to have that debat know, alexandria ocasio-cortez on line one, right, i mean are we not having a conversation around capitalism? [mcnamee] and evan smith as the operator, okay? because i mean i came to the tribune festivalast year,

right? and it was going on all around me. [smith] you heard in austin, and you hear in other places when you travel arouin the country, the bngs of a bigger conversation, knitted together whethat is finallyouin the cou doing what you want. [mcnamee] here's the funny thing. i'm doing a book tour. i remarkably have done eight appearances onhannels, and eight appearances on nbc channels. so msnbc and cnbc. [smith] right. down the middle solves the riddle, rht? [mcnamee] well, what's really interesting is that my basic pitch which is that io need to ask the que about why is it, that our most personal data. so think about this is, your credit card transactions, your location, your web browsing history, io and your health inform from online sources, why are third parties allowed to trade that without your permission? i don't think that should be legal, okay? we've neversactually had that conion. and why is it okay for people who give you email services or application services to scar your private content eir 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 nodding their head going yook right, why is tha? [smith] well this is, data privacy is one of those things where ft 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] well, i think pushg back, i don't think it's about hating on facebook. because i like the pele, okay? i'm saying i think this is about pushing back on a culture and a business model that lost its way, thatally treats us as a fuel source instead of as people. and the funny thing about this is that when you sit down and talk to people about it we on't have to give up whawe like. what we have to ask them tdo is to give up the part of their business over-profitable and harms journalism, mediveof all kinds, and willually harm

the auto industry, the banking industry, the energy iy. [smith] well let's just stick with two people on the wrong end of this relationship. or two industries, journalism and the democracy part of all of our lives. on journalism ceyou actually call out ok for undermining the frss. [mcnamee] for sure. [smith] explain in short form how it is that you think fk undermines the free press. [mcnamee] so facebook and google have the same thing. so what id was they provided really compelling, really convenient services to people and they get all of us, i mean literally everyone on their services. they then systematically gather all the data known about these people, including going to your credit card processor to get your credit card transactions, to your cellular phone company to get your cellular location data. they have literally perfect information. so if you're a marketer or a media comny. 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 everything served throug

this portal controlled by these guys. basically, the deal these guys offer is i'm gonna monetize it with ads and i'm gonna keep the profit. that is a terrible deal. [smith] the economic distress of journalism is the thing that has undermined the free press. and thenmic distress has happened as a consequence of the behavior of the facebooks of the world. [m] and if that was all they did, that would be fine. but they keep changing the rules they had this big video thing. [sth] pivoting to video. [mcnamee] and then they pulled the rug out from everybody under that, and so now they're all trying to make up r it with these local things. and i wanna see what they do. because conceptually they could do something valuable in local coverage.things. and [smith] yeah, but the amount of investment they would need to revive local news is enormous. [mcnamee] well, they would also need to have a change in culture, right? anso i'm looking at this -- [smith] first things first. [mcnamee] right, but evan, the point that 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

ould say, we wanna see if you're a robot or a human, so identify these pictures right? and they're always of transportation, right? s, it's like cars, butreet signs, you've seen those things? [smith] yes. [mcnamee] and that's to define whether you'rean 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 those things haveotten so much harder. [smith] you understand you are creeping me out. [mcnamee] yeah, i'm trying, i'm trying. they knore a human because the way your mouse moves. [smith] all right, let me quickly go to democracy. i'm juna do the democracy part of this in 30 seconds, roger. what, in 30 3conds, what did facebook do to our democracy in our last election? [mcnamee] well, fundamentally they created these too 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,

and they hit 20 mi people on instagram. and they did that for less than the price of a fighter aircraft, so they influenced the outcome ur democracy and the outcome in the united kingdom referendum over brexit. [smith] at assumes that the end-user is susceptible to that kind of -- [mcnamee] remember, the goal of this whole sort of thing is to cause dismay about democracy, right? so the pot 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 be great insight that wught to bear was that if you had the cambridge analytica data set which was 30 million facebook people tied to their voter ids out of 137 million total voters, you could suppress enough votes to changoutcomes in some jurdictions. and that almost certainly happened. [smith] has there been a sufficient, in the remaining s we have, a sufficient takeaway from this that prevents this from happening in the next election?

in 2018, there were three groups, the trump campaign had a genius strategy. and they focused on suburban white women, the ones that the russians had really focused on. and they suppresa lot of v. 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,e of color and young people, right. [mcnamee] those three exact groups. so i think we're learning. l and the critical thing is, we have to watch. because election interference can both happen in a lot of other ways. they can turn off the electricity, right? they can hack the voter machines. so the danger here is not the russians. it anybody can do this. there was a campaign in california for school bdird where one of the ctes hired an israeli psychological operations firm to swing a school board election. [smith] yeah. [mcnamee] i mean, th can literally happen at any scale. [smith] you cannot make this stuff up. [m] 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. should we break up the big social networking companies? [mcnamee] so, probably. the absolute thing we have to do is they cannot be allowed to block competitors. they can't be allowed to shardata across products. they can't be allowed to make a market and all three of the big guys, facebook, google and amazon do all ree of those things. [smith] so probably to breaking it up. then it sounds like the answer is yes to a more restrictive regulatory environment. [mcnamee] well, i wanna do teddy roosevelt. i wanna do the teddy roosevelt, 1900 breakup, that model which was about just creating more entrepreneurship [smith] and more competition. [mcnamee] and incredibly, we have candidates who have come out with that. elizabetwarren's thing is classic teddy roosevelt. klobuchar is basically and incredibly ted cruz,ng, hyour own senator fre in texas seems to be at least open to that same idea. and josh hollye rom missouri, there 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 somhing. and antitrust in tech has been so good for growth. [smith] well honestly,at's a be in the right direction, just that. the fact that there's an acknowledgement of the problem. [mcnamee] totally, and my point is, it's pro-growth. everybody likes it. [smith] last question, should we all get off facebook? [mamee] i can'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 problem is -- [smith] who's monetizing now, roger? amee] i want to reform them, right? i'nged 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. [smith] okay, that's good place to end. roger, i wish you great success with this book. it is so fun to talk to you, you have made much smarter in 30 minutes. [mcnamee] evan, i love it. thank you so much, brother. [smith] muger mcnamee, thanks s. (audience clapping) [smith] we'd love to have yojoin us in the studio. visit our website at klru.org/overheard

to find invitations to interviews, q&asour audience and guests, and an archive of past episodes. [mcnamee] makerberg came out a couple weeks ago and said they're gonna turn everything into end to end encryption so it looks like messenger and whatsapp. and he puts this forward like he's looking out for our privacy. what's really going on is that his big problem is that he is home to 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 responsible because he can no longer tell what you're doing. [narrator] fun eng for overheard win smith is provided in part by hillco partners, a texas government affairs consultancy, the alice kleberg reynolds foundation, claire and carl stuart, and by entergy. (pleasant music)

♪ robert: storm watch.ta i'm robert cos, welcome to "washington week." hurricane dorian heads toward florida and p psidet mp reassures residents his administration is ready. sresident trump: our highest priority i the safety and security of t people in the path of the hurricane. tical storms hover. uncertainty other his trade war edge. hina keeps investors on his fight with former.b.i. director james comey is back on. followg a watchdog report.wa and democrats face storms too. as the iowa caucuses a a suddenly challged. next. >> this ishi "washington week." funding i