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Facebook and free markets

Summary:
There is at least the beginning of an advertising boycott of Facebook as certain companies more attuned to current fashions complain about some of what Facebook allows to be posted upon the site.Good, this is how it should be.Facebook has said it will start to label potentially harmful posts that it leaves up because of their news value. The more hands-on approach comes as the social media firm is under pressure to improve how it moderates the content on its platform, including posts by US President Donald Trump.More than 90 advertisers have joined a boycott of the site.Consumer goods giant Unilever on Friday added its name to the list, citing a "polarized election period" in the US.The maker of Dove soap and Ben & Jerry's ice cream said it would halt Twitter, Facebook and Instagram

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There is at least the beginning of an advertising boycott of Facebook as certain companies more attuned to current fashions complain about some of what Facebook allows to be posted upon the site.

Good, this is how it should be.

Facebook has said it will start to label potentially harmful posts that it leaves up because of their news value.

The more hands-on approach comes as the social media firm is under pressure to improve how it moderates the content on its platform, including posts by US President Donald Trump.

More than 90 advertisers have joined a boycott of the site.

Consumer goods giant Unilever on Friday added its name to the list, citing a "polarized election period" in the US.

The maker of Dove soap and Ben & Jerry's ice cream said it would halt Twitter, Facebook and Instagram advertising in the US "at least" through 2020.

"Continuing to advertise on these platforms at this time would not add value to people and society," it said. "We will revisit our current position if necessary."

Now, whether the folks at Unilever are doing right by their shareholders by doing this is another matter. But of course those shareholders that don’t want that done with their money can sell and invest elsewhere.

Facebook is, of course, one of those dual facing (no, not two faced) companies as analysed by Jean Tirole. They are trying to please both the users of the site and also the advertisers upon it - there is a balancing act here. So, how to judge the perfection of the balance reached?

Advertisers have the absolute right not to spend their money there. The impetus for not doing so presumably being that those they are advertising to will change their purchasing habits if they do or they don’t. Those who post to Facebook will equally decide to do so or not dependent upon the restrictions upon their doing so. The end state will be emergent from the interplay of those different processes.

That is, by leaving matters to those market processes we’ll end up with the correct balance. The conclusion therefore being that we can leave well alone and watch them get on with it - legal measures, regulation, are not required.

It’s worth noting what that end state will be too. The restrictions on the posting of “hate” material may or may not end up as being what we or you specifically would desire. But it will be the balance of what the couple of billion people who actually use Facebook do. Which is rather what the aim is, isn’t it? That people, by their individual behaviour, contribute to how the world ends up - you know, markets make good enough?

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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