is provided in part by hillco partners, a texas goncrnment affairs consul 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 from his early investment in facebook, but now conseaers the company the st 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. [smith] let's be honest, is this about the ability to learn or is this about the experience of not having bn taught properly. how have you avoided 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 with the sizzle before we get to the steak.

are you gonna run for president? i think i just got an f om you actually. this is overheard. (audience clapping) [smith] roger mcnamee, welcome. er mcnamee] it's great to be here. [smith] congratulations on-- [mcnamee] thank you. [smith] --on this book. words matter, right? words matter, the words we choose matter. catastrophe? really? not problem, not concern, not something a little bit more muted, catastrophe. [mcnamee] it is a catastropht evan, because it is ne. we're still metastasizin-- [smith] oh, there's more, still? [mcnamee] that's the issue -- [smith] the problem is it's gonna g worse. [mcnamee] it's already getting worse. 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 truse technology the wayd for fifty years before this. [smith] right,ato let's stipulate his book, while focused on facebook, also calls out google. [mcnamee] yes, very much so. [smith] it calls out other actors regular presences [mc in all of our lives, so. things we take for granted. [mcnamee] things we love. [smith] we don't think about the poteial dangers of our association tohose things, but the book is really largely about facebook.

[mcnamee] it is. [smith] s,d the bill of particulhe bill of charges against facebook that you levy is pretty long. they surveil our every action online. they monetize our privacy, they foster hate speech, they damage the public health, they uercut 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 basically a digital avatar. a data avatar, and so in that context they say in advertising, hey, you're not the customer you're the produd the problem 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. sometimes directly to you, and sometimes they use your data to create value at the expense of everybody els [smith] is the problem that this was not the point all along? and at some po

or was it the point all along only they tell us and we didn't know? [mcnamee] so i think google understood where this was going very, very early on. i think with facebook it evolved. and essentially, the way to think about it is markuckerberg is an idealist, and he believe-- [smith] you've known him for now -- [mcnamee] since he was you meet him in 2006 for the first time? [mcnamee] yeah, so i knew him at 22, and he was such alist. and he believed that connecting everyone in the world was so important that it justified any action necessary to get there. and there is the flaw. it's this notion that you're going to get problems as you did in myanmar, a country of 50 million in asia -- in[smith] boy, you're comp facebook to myanmar now. [mcnamee] well bear with me for a sec. so faceb 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 alit triggered what the und a classic ethnic cleansing.

and ebook, everybody went hey, you know, we didn't cause it, yes, 9,000 people died, 42,000 people are missing and presumed dead buouthat's just a cost ogrowth. [smith] your point is that facebook in that case was every bit as much of a bad actor as the gent that perpetrated this? [mcnamee] no, i'm saying that they enabled it and theitoreaction to it was noeap to the defense of this poor benighted minority. but rather to say, i'm sorry, that kind of stuff happens. [smtih] and, i think most importantly, as a theme of this book emerges, once confronted with what they had done, whether their intentions were good or b, and they were given an opportunity to change, they didn't. [mcnamee] they did not, because again the goal is to connect and they were given the whole world andto everything else is just noise. [smith] so you'lulate that the goal is to connect the whole world, the goal is not the bad stuff. [smthe bad stuff iste tha the means to an end.ect [mcnamee] no and in fact, i would argue these are good people. it's the culthat they live. and this is a culture that begins so we essentially have no rules that business

operates under, and then in silicon valley you have this culture that changed in the early 2000s to this extreme focus on conquering the world and creating monopolies and dominating, becoming billionaire from the silicon valley of the '50s, '60s, '70s, '80s, and '9. and in that context this notion of we have a vision, we will pursue it relentlessly, and you basically don't worry about consequences. and i look at this and i go, these are good people bu aren't being well advised by their board of directors, by their parents, arby their friends. thereall kie in their lives who could say hey guys, hang on, slow down. there are other things that matter here -- [smith] well, some people, but me people are saying, and you are one of those people who at certain points said it. the problem islis much that they're noening-- [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 alon the critics always appeared to be wrong, so they developed this internal cultural thing

of if critic, then wrong, and i'm sure when i first went to them in october of 2016, they knew i was a friend, but 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 ta critic who was therefore wrong. [mcnamee] and 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. you meet mark zuckerberg, he's 22 years old. you are in the offices of your firm, elevation partners, on sand hill road in the heart of silicon valley. 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 entirprofessional life -- [smith] you've met people like him before, right? [mcnamee] i had been very close to steve jobs, to bill gates, to gordon moore. so aic of the legends of s valley cause i got there before the pc industry really happened. so i got to grow up with all of them. [smith] right, your contemporaries. [mcnamee] exactly,frnd so, these were mnds

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 was really exped and not conflicted. [smith] right now by crisis, we mean yahoo! wanted to buy facebook for a billion dollars. [mcnameed not know that-- [smith] yeah, it's a hell of a crisis by the way, i wish i had such a crisis. [mcnamee] well texactly. but you haremember, the company had essentially no revenues and he had, in my opinion,est idea i'd seen since google. even though itas just for college students and high school students it only had your picture, your ne, your address and your relationship status, there was [smith] it was very modest at that point. [mcnamee] it was very, i mean practically no revenue. and so, when he comes in to see me, i say "mark, before you say a word, you gotta let me give you some context for why i his meeting, because i think you have the most important company since google, even though you don't have any revenues ye and you're a teeny little thing." i think because he had authenticated identity, this nion you had to have your email address from school. that would prevent trolls, and that was the thing that had killed ever

anonymity allowed people to behave badly and to bully others. and so he had solved that problem. anyway, i start this thing out by going "if it hasn't already happened, either microsoft or!'s gonna offer a billion dollars for facebook and everybody you know is or!'s gonna offer a billion dollars for facebook gonna tell you to take the money." anyway, i go on for two minutes giving him why i thought or!'s gonna offer a billion dollars for facebook i hoped he wouldn't do it. what followed was 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. ti i'm expecting a re, and i get 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 th. at two minutes, i'm going no, this is just really weird. [smith] something is wrong here. [mcnamee] it's really weird, anyway, it goes on for almost five minutes, at which point i'm literallready 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 going on, it's why i'm here, one of those companies offered me a billion dollars, everybody behaved that way." he 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 not know how to sort of bring them down. and so i helped him do that, the whole meeting lasted half an hour -- [smith] and you persuaded him in the end, spoiler, you persuaded him in the end not to sell. [mcnamee] no no, he was, he didn't want to. what iou gave him was the half --end [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 thereaener, i was one of hisrs. and he had a bunch at the time. beca had peter teal, and he had don grant from the washington post and marc andreessen the founder of netscape, so i was just one of many. but i helped him obohis team because eve else wanted to sell the company, so he needed to replace 'em and his board had been going along with it. so he needed somebody who could help him do that. and i brought sheryl sandberg into the company. that was the big thing that i wound up doing. [smith] you had met her through the 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

and said "can you help us?" [smith] where would i go, i would go to you. om [mcnamee] they wouldto me, and so sheryl sandberg" was the chief of staff to the secretary of the treasury om [mcand she was working me, with bono from u2.berg" [smith] larry summers. [mcnamee] larry summers. so in they're working to forgive debt that would nevrepaid by emerging countries around the world and this was sort of a gift from major countries to emerging countries for the millennium. and bono had had this idea and sheryl helpedhim execu. 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 thing for bands r i hear there's this guy to sell directly to thns.l dead i need to meet him. do you know who he is?" and sheryl goes, "well i've never met him but my broth-in-law works for him and he's working on that project." it was just pure coincidence. [smith] weird coincidences, people know people, right -- [mcnamee] so she introducese to bono 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

d such an influential footprint within the silicon valley and the technology universe is elevation partners.'s you ao as two of the leads. [mcnamee] exactly. and fred anderson was the e who had saved the company from bankruptcy, brought steve jobs back in. [smith] so sheryl sandberg introducesou and bono and that becomes a major part of your life. you introduce sheryl sandberg to mark zuckerbergamee] he becomes a major part of her life. [smith] he becomes a major part of her life. [mcnamee] which explains why -- e [smith] she becomes o of facebook. [mcnamee] and this is why i become so fond of facebook, right? cause, you know, if you're in the investment business, and a company's really successful, cause, you know, if you're and you can see a portion of your fingerprint on it,, [smith] i actually love the fact that in the back ofhis book as an appendix is the memo that you write to mark zuckerberg and sheryl sandbergok a month before the election -- [mcnamtually nine days before the election, nine days. [smith] well technically in the previous month, but only nine days before they election. and you write them a memo saying basically,

and you lay out these great concerns abourmfacebook's role in uning our democracy -- [mcnamee] and civil rights. [smith] and civil rights. and giving bad actors a way through the facebook platform to adv lsely affect all of oes. [mcnamee] that the advertising tools that work so great for marketers also work really well for bad actors who wanna harm innocent people. po [smith] and again tht here is not just that facebook is causing harm through its platform but that it is knowingly causing harm and choosing not to do anything about it. [mcnamee] to be clear, i didn't know that they, i wasn't asserting that in the memo, in the memo i assert to them, i think there's something wrong with the business model and d e algorithms. i assuey were the victim when i wrote it. [smith] well let's, but here, i underlined what i though is the key takeaway from this. you write that mark zuckerberg and sheryl sandberg, agefore 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 --" [mouamee] to do so, and i t when i was saying that. that i might be the first person to tell them that.

mith] well, this is where they come back and they say he's now a critic. therefore he's wrong. [mcnamee] i spent three months privately begging o do what johnson and johnson did after the tylenol poisoning in 1982. some guy put poison in bottles of tylenol in chicago, illinois. bunch of people died, and the ceo of johnson and johnson, the very day the news broke, pulled every bottle of tylenol off every shelf in america. and he said "we're goingrsto po we didn't cause this, but we're gonna protect them." uestions 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 you have to leap to the defense. 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 th pass you off to an underling, whose response is basically -- [mcnameeresponse is, "the law says we're a platform not a media compherefore we're not responsible for what third parties ." and i go, "dude, this is a trust business."

if the pduple who use your p decide you're responsible, there is no law on earth that's gonna protect you. the same issue that tth tylenol guys faced. [sand you make the point, in fact, in this book, that the story of facebook, oras you tell it, is a about trust. it's a story about privilege, and it's a story about power. and that in each case, those stories as they converge ultimately reverberate back onf 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 business model 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 it they look at google, they look at twitter, they look at youtube -- [smith] the entire tech industry is turned upside d [mcnamee] well, it would have happened eventually but thd for sure accelera. [smith] so you make a big point in this book about talking about cic responsibility. and how facebook somehow does not put civi[mresponsibility first. amee] i don't think anyone

in tech does. [smith] so let me play civ devil's advocate.[mcnamee]. amee] i don't think anyone [smith] these are for-profit companies. [mcnamee] it's a great question. [smith] the job of a for-profit company is to maximize value for shareholders. 'rit's to make a buck. thnot non-profits. they're not eleemosynary organizations, they're companies. companies don't have civic responsibilities, so goes the devil's advocate theorso [mcnamee] exactly, and my response is, when i started in my career the u.s. had a different philosophy of business. there was a man named peter f. trucker who was the managementnt guru of the time.ness. and he always preached that there were five stakeholders. shareholders, but also employees, the communities where employees live, customers and suppliers. they're not equal. produces this very short term oentation we have which results in people gemiing laid off indisctely, towns being abandoned, and my point is there was a time whee econod

and we needed todoned, ghten things up. i'll call that 1981 to say '95, where that was demonstrably 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 argue, probably comfortably, that now it produces these really weird outcomes like we do a massive tax cut for corporations and instead of them investing in building plant and equipmenba they just buy stoc. [smith] right. [mcnamee] and that, i think, you know objectely is not the best interest of the economy. in the american people. and my point to you, evan, is not that i'm right about this but that we haven't had this debate for 40 years. and i would like us to have theebate again. because the country's very, it's divided. and it's divided over issues that really derve debate. [smith] you know i would argue, actually, and it's divided over issues thawe're starting to have that debate. you know, alexandria ocasio-cortez on lree one, right, i meane not having a conversation around capitalism? [mheamee] and evan smith asperator, okay?

because i mean i came to the tribune festival last year, right? and it was going on all around me. [smith] you heard in ahetin, and you hear in places when you travel around the country, the beginnings of a bigger conversation, knted together that is finally doing what you want. [mcnamee] here's the funnytoth. i remarkably have done eight appearances on fox channels, and eight appearances on nbc channels. so msnbc and cnbc. [smith] right. down the middle solves the riddle, right? 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 alwed to trade that without your permission? i don't think that should be legal, okay? we've never actually had that conversation. and why is it okay f people who give you email services or application services

to scan your private 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 nodding their head going your right, why is that okay? ] well this is, data privacy is one of those 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 [mcnamee] well, i think pushing back, i don't think it's about hating on fabook. because i like the people, okay? i'm saying i think this is about pushing back on a culture and a business model that lost its way, that basically treats us as a fuel srce instead of as people. and the funny thing about this is that when you sit down and talk to people about it we don't have to give up what we like about these products. what we have to ask them to do is to give up the part of their business that harms us, that makes them so ridiculouslythem to do over-pnafitable and harms josm, media of all kinds, and will eventually harm

the auto industry, the banking industry, the energy industry. [smith] well let's jusstick with two people on the wrong end of this relationship. or two industries, journalism and the democracy part of alur lives. on journalism you actually call out facebook for undermining [smith] explain in short form how it is that you think facebook undermines the free ess. [mcnamee] so facebook and google have the same thing. so what they did was they provided really compelling, really convenient services to people and they get all of us, i mean literally everyone their services. they en systematically gather e data known about these people, including going to your credit card processor to get your credit cardransactions, to your cellular phone company to get your cellular location data. they have literallperfect . so if you're a marketer 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 t everything served through this portal controlled by these guys. and so here's the the problem if you're journalism. basically, the deal these guys offer is you have to give me your content for free. 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 then economic distress has happened as a consequence of the behavior he facebooks of the world. [mcnamee] and if that was all they did, that would be fine. but they keep changing the rules so that the press invests all in a thing like video.e fine. they had this big video thing. [smith] pivoting to video. [mcnamth] and then they pulled rug out from everybody under that, and so now they're all trying to make up for it with these local things. and i wanna see what they do. because conceptually they could doomething valuable in local coverage. [smith] yeah, but the amount of investment they would need to revive local news is enormous. [mcnamee] well, they would also need to change in culture, right? and so 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 g a thing, and every once in a while they would say, we wanna see ifou're a robot or a human, so identify these pictures right? and they're always of transportation, right? it's like cars, buses, street signs, you've seen those things? [smith] yes. [mcnamee] and thatto definr you're a human or a robot. the truth is that's not what you're doing. what you're really the artificial intelligence for google self driving cars. at's why those things have gotten so much 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 wayour mouse moves. [smith] all right, let me quickly go to democracy. i'm just gonna do the democracy part of this in 30 seconds, roger. what, in 30 seconds, what did facebook do to our democracy in our last election? en [mcnamee] well, fundllyr. they created these tools that allowed the russians to essentially interfere in our election and one campaign to suppress votes tha the election for such to a ludicrously low cost bepeuse the targeting waect. 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 susceptible to tha of -- [mcnamee] 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 causot many people not to the core thing, and where it was really successful and the great insight that was brought to bear was that if you had the cambridge analytica data set which was 30 million facebook people tied heir voter ids out of 137 million total voters, you could suppnough votes to change outcomes in some jurisdictions. and that almost certainly happened. [smith] has there been a sufficient, in the remaining minutes we have, a sufficient takeaway from this that prevents this from happ

[mcnamee] here's the good news. hrin 2018, there were groups, the trump campaign had a genius strategy. ey focused on suburban white women, people of color, and idealistic young people. the ones that the russians had really focused on. and they suppressed a lot of votes there. four million people voted r 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 peopleright. [mcnamee] those three exact groups. so i think we're learning. 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. it's anybody can do this. there was a campaign in california for school board where one of the candidates hired an israeliychological opm to swing a school ard electito. [smith] yeah. [mcnamee] i mean, this can literally happen at any scale. [smith] you cannot make this stuff up. [mcnamee] this is not democracy we need to go to paper ballots and all that.

[smith] yeah, unay, game show speed for the last minute. e.ould 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. ey can't be allowed to share data across products. th can't be allowed to make a market and then also participate in it. and all th the big guys, facebook, google and amazon do all three of those things. remith] so probably toing 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 breap, that model which was about just creating more entrepreneurship-- [smith] and more competition. [mcnamee] and incredibly, we have candidates wh come out with that. elizabeth warren's thing is classic teddy roosevelt. klobuchar is basically going with the same thing, and incredibly ted cruz, your own senator from here in texas seems to be at open to that same idea. and josh holly from missouri, there are a number of others. i've been working with the antitrust division the federal trade commission, because pretty much

everybody knows we gotta do something. and ant in tech has been so good for growth. [smith] well honestly, that's a big move in the right direction, just that. the fact that there's an acknowledgement of the problem. m [mcnamee] totally, a point is, it's pro-growth. so everybody likes it. [smith] last questhould we all get off facebook? [mcnamee] i can't. ngi've got a book i'm tro sell to people on facebook and instagram. [smith] oh my god! [m hamee] no, i can't beocrite. i can't be a hypocrite. and the problem is -- [smith] who's monetizing now, roger? [mcnamee] i want to reform tm, right? i've changed my habits. i don't e messenger anymore. i don't do any political stuff. i've gotten off goog almost entirely. and you know, i do think you wanna change your behavior. use other products, don' let th. [smith] okay, that's a good place to end. roger, i wish s u great success with tok. it is so fun to talk to you, you have made me so much smarter in 30 minute [mcnamee] evan, i love it. thank you so much, brother. [smith] roger mcnamee, thanks so much. (audience clapping) [smith] we'd love to have you join us in the studio. visit our website at klru.org/overheard

to find invitations to interviews, q&as with our audience and guests, and an archive of past episodes. [mcnamee] mark zuckerberg came out a couple eks ago and said they're gonna tu everything into end to end encryption so it looks like messenger and whatsapp. and he puts this forward lis looking out for our privacy. what's really going on is that his big problem ishe is home to hate speech, he is home to disinformation, he is a home to conouiracy theories. and ifncrypt end to end, he's no longer responsible because he can no longer tell what you're doing. [narrator] funding for overheard with evan smith is provided in part by hillco partners, ira texas government afconsultancy, the alice kleberg reynolds foundation, )

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