WEBVTT NOTE 41. A Movie That Gets It Right 1 00:00:00.000 --> 00:00:05.120 A movie that gets it right. 2 00:00:05.120 --> 00:00:09.100 Who are the capitalist folk heroes of our time? 3 00:00:09.100 --> 00:00:18.020 The Social Network is a film that celebrates one of the greats, Facebook founder Mark Zuckerberg. 4 00:00:18.020 --> 00:00:22.220 It might seem at first like an impossibly boring story that resists moviemaking, how 5 00:00:22.220 --> 00:00:27.660 Facebook came to be founded and grew, meeting trials along the way and becoming the giant 6 00:00:27.660 --> 00:00:29.860 that it is today. 7 00:00:29.860 --> 00:00:35.220 In fact, it is not only a super exciting and wonderful movie on its own terms, it is probably 8 00:00:35.220 --> 00:00:40.660 the finest movie about free enterprise made in our times. 9 00:00:40.660 --> 00:00:46.420 It gets entrepreneurship in the real world exactly right. 10 00:00:46.420 --> 00:00:51.380 It deals brilliantly with all the important issues from the motivation or drive behind 11 00:00:51.380 --> 00:00:57.020 web startups, it is not necessarily money, and the impossibility of slicing and dicing 12 00:00:57.020 --> 00:01:11.420 The movie comes just in time. 13 00:01:11.420 --> 00:01:17.820 Facebook has been the victim of an increasingly vituperative campaign by the intelligentsia. 14 00:01:17.820 --> 00:01:24.740 It supposedly violates privacy, feeds crazed egoism, destroys lives by tempting people 15 00:01:24.740 --> 00:01:30.020 People who cough up too much information about themselves, wrecks marriages, leads teens 16 00:01:30.020 --> 00:01:35.260 to commit suicide, wastes vast time that people should otherwise be using to enjoy the great 17 00:01:35.260 --> 00:01:41.100 outdoors, ruins the culture by digitizing communication at the expense of real face-to-face 18 00:01:41.100 --> 00:01:48.020 interaction, and wrecks the language by dumbing down the term friend. 19 00:01:48.020 --> 00:01:52.780 Such are the alleged crimes of Facebook, and if you think that the website is guilty, there 20 00:01:52.780 --> 00:01:58.300 There is an easy answer, don't use it. 21 00:01:58.300 --> 00:02:03.420 Facebook is all voluntary, it is also free for everyone. 22 00:02:03.420 --> 00:02:09.660 People, the latest report has 500 million people signed up, but this will grow to 1 23 00:02:09.660 --> 00:02:14.500 billion and beyond, also happen to love it and depend on it. 24 00:02:14.500 --> 00:02:18.820 In fact, it is the most popular website ever. 25 00:02:18.820 --> 00:02:22.740 It has connected people as never before, allowing one person to keep up with the goings on, 26 00:02:22.740 --> 00:02:44.600 There is philosophical significance to the phrase social network. 27 00:02:44.600 --> 00:02:49.940 It echoes a distinction between the economic and political means, as made by Franz Oppenheimer, 28 00:02:49.940 --> 00:03:11.940 The Social Network is shorthand for the vast matrix of communication and exchange that 29 00:03:11.940 --> 00:03:15.320 springs from human volition alone. 30 00:03:15.320 --> 00:03:24.120 It is to society, in that Chudorovian sense, that Facebook owes its energy and orderliness. 31 00:03:24.120 --> 00:03:28.800 As always with free enterprise, it all started with a small idea. 32 00:03:28.800 --> 00:03:34.040 People like to know about others and like others to know about themselves. 33 00:03:34.040 --> 00:03:37.560 The Internet can make this happen. 34 00:03:37.560 --> 00:03:42.840 The film shows how the idea germinated within the microculture of Harvard University as 35 00:03:42.840 --> 00:03:49.020 Zuckerberg experimented with software solutions and gathered ideas from every possible source. 36 00:03:49.020 --> 00:03:54.760 He rendered dreams into code that became a phenom. 37 00:03:54.760 --> 00:03:59.940 The movie nicely illustrates how his entrepreneurship was driven by ideas, tested on a daily and 38 00:03:59.940 --> 00:04:05.060 hourly basis in response to consumer interest and demand, with constant refinements along 39 00:04:05.060 --> 00:04:07.020 the way. 40 00:04:07.020 --> 00:04:09.080 The ideas alone, however, were not enough. 41 00:04:09.080 --> 00:04:13.260 They were given life by technological genius. 42 00:04:13.260 --> 00:04:19.540 They were implemented through deep devotion and even a praiseworthy fanaticism. 43 00:04:19.540 --> 00:04:24.680 The film further shows that while making money and the profit and loss test are the crucial 44 00:04:24.680 --> 00:04:30.960 signs and seals of commercial success, in the long run, the drive for money was not 45 00:04:30.960 --> 00:04:34.120 the fundamental motivation for the creation of Facebook. 46 00:04:34.120 --> 00:04:37.980 Zuckerberg is shown as not caring about money. 47 00:04:37.980 --> 00:04:43.160 He cares about doing something creative, great and path-breaking. 48 00:04:43.160 --> 00:04:48.740 He cares about making a dent in the universe. 49 00:04:48.740 --> 00:04:54.060 When Facebook begins to take flight and really catch on, Zuckerberg is quoted as keenly realizing 50 00:04:54.060 --> 00:04:58.900 that its popularity, its coolness, is its main asset. 51 00:04:58.900 --> 00:05:04.300 He wisely sees that nothing should be done to risk that fundamental asset. 52 00:05:04.300 --> 00:05:08.820 The goal is not making as much money as soon as possible, but entrenching the love that 53 00:05:08.820 --> 00:05:13.260 people have for the thing that Facebook was making available. 54 00:05:13.260 --> 00:05:19.260 This attitude among entrepreneurs is far more common than conventional lore would suggest. 55 00:05:19.260 --> 00:05:26.780 The archetype is of an achievement-obsessed dreamer, not a greed-obsessed calculator. 56 00:05:26.780 --> 00:05:30.700 Another point that is bang on in this movie concerns the most difficult life lesson that 57 00:05:30.700 --> 00:05:36.100 that anyone of singular talent, any dreamer who achieves something wonderful must learn 58 00:05:36.100 --> 00:05:38.220 in life. 59 00:05:38.220 --> 00:05:42.740 We are born into this world believing that success in anything will be met with praise 60 00:05:42.740 --> 00:05:44.400 and acclaim. 61 00:05:44.400 --> 00:05:48.540 We are not often told the truth that we see in this film. 62 00:05:48.540 --> 00:05:54.820 Success is more likely to be met by envy, hate, disparagement, put-downs and loathing, 63 00:05:54.820 --> 00:05:59.020 sometimes from the most unexpected sources. 64 00:05:59.020 --> 00:06:04.540 The successful person in any field, and this is probably true in all times and all places, 65 00:06:04.540 --> 00:06:10.340 will find himself or herself quickly surrounded by wolves, many of them former sheep, seeking 66 00:06:10.340 --> 00:06:14.220 to ruin, wreck and destroy. 67 00:06:14.220 --> 00:06:20.320 Even the grandest achievements are put down as pure luck or credited to others or disparaged 68 00:06:20.320 --> 00:06:22.980 as being not so great. 69 00:06:22.980 --> 00:06:27.420 If there are laws that give the wolves the opportunity to work out their envy, they will 70 00:06:27.420 --> 00:06:29.260 will be employed. 71 00:06:29.260 --> 00:06:35.380 Every entrepreneur must prepare for this, expect it and deal with it. 72 00:06:35.380 --> 00:06:40.100 So it was that Facebook was met with early challenges and hate campaigns and it is no 73 00:06:40.100 --> 00:06:45.860 surprise in the digital age that the initial attack occurred on the issue of intellectual 74 00:06:45.860 --> 00:06:47.860 property. 75 00:06:47.860 --> 00:06:52.300 And here the film makes yet another great contribution. 76 00:06:52.300 --> 00:06:57.980 It shows how irrelevant IP is for business success and how it has become the preferred 77 00:06:57.980 --> 00:07:04.020 slogan of losers and the great excuse for whole classes of people with a bad business 78 00:07:04.020 --> 00:07:05.020 sense. 79 00:07:05.020 --> 00:07:12.300 He stole my idea is the great lie of our time because ideas cannot actually be stolen and 80 00:07:12.300 --> 00:07:17.960 there is no existing idea that is not in debt to some other idea. 81 00:07:17.960 --> 00:07:24.860 The film shows how fellow Harvard students Cameron and Tyler Winklevoss had asked Zuckerberg 82 00:07:24.860 --> 00:07:29.600 to write the code for their proposed site, Harvard Connection, which eventually became 83 00:07:29.600 --> 00:07:35.400 Connect U. Zuckerberg had other and more elaborate ideas brewing in his brain. 84 00:07:35.400 --> 00:07:41.380 Once Facebook took off, the Winklevoss twins cried foul and after having failed to crush 85 00:07:41.380 --> 00:07:46.140 Facebook through every other means, eventually sued Zuckerberg for violating their intellectual 86 00:07:46.140 --> 00:07:51.980 for Property, even though the projects shared none of the same code. 87 00:07:51.980 --> 00:07:54.900 There are a few choice lines in the movie. 88 00:07:54.900 --> 00:07:58.740 Zuckerberg is outraged at the idea that he had stolen anything. 89 00:07:58.740 --> 00:08:03.380 The Winklevoss twins still had their idea, it's just that they didn't do anything with 90 00:08:03.380 --> 00:08:04.600 it. 91 00:08:04.600 --> 00:08:09.160 And what if Zuckerberg had indeed relied in part on someone else's notion? 92 00:08:09.160 --> 00:08:14.140 As Zuckerberg is quoted as saying, does a guy who makes a really good chair owe money 93 00:08:14.140 --> 00:08:17.460 to anyone who ever made a chair? 94 00:08:17.460 --> 00:08:25.180 Silly Zuckerberg, using common sense in the face of the arcane and mixed-up world of IP. 95 00:08:25.180 --> 00:08:30.180 Another way to put it is a line Zuckerberg uses in the depositions after the lawsuit. 96 00:08:30.180 --> 00:08:37.340 He tells one of the twins, if you had invented Facebook, you would have invented Facebook. 97 00:08:37.340 --> 00:08:44.100 This sounds simple, but it is really all you need to know about the absurdity of such claims. 98 00:08:44.100 --> 00:08:48.580 Who wins and who loses in the marketplace is not arbitrary. 99 00:08:48.580 --> 00:08:54.500 The marketplace tends to separate the talkers from the doers, the dreamers from the risk-takers, 100 00:08:54.500 --> 00:08:57.860 the actors from the mere thinkers. 101 00:08:57.860 --> 00:09:02.540 If you can't create and can't compete, you can always claim a violation of intellectual 102 00:09:02.540 --> 00:09:03.540 property. 103 00:09:03.540 --> 00:09:08.620 Hey, under American law, there is nothing you can't use as the basis of a legal extortion 104 00:09:08.620 --> 00:09:09.620 scheme. 105 00:09:09.620 --> 00:09:15.940 An essential part of entrepreneurship is choosing which idea, among the millions that hit a 106 00:09:15.940 --> 00:09:23.300 person from every direction every day, one is going to use to influence a business venture. 107 00:09:23.300 --> 00:09:27.380 At one point in the film, a student comes up to Zuckerberg and asks him whether he knows 108 00:09:27.380 --> 00:09:32.800 if some particular girl has a boyfriend, and if so, how serious they are. 109 00:09:32.800 --> 00:09:36.780 This gives Mark the idea of permitting users of Facebook to announce their relationship 110 00:09:36.780 --> 00:09:40.260 Status on their individual pages. 111 00:09:40.260 --> 00:09:44.840 The addition of that one feature convinced him that it was time to go live. 112 00:09:44.840 --> 00:09:48.560 The new website was launched soon after. 113 00:09:48.560 --> 00:09:53.160 By the standards of IP, the fellow student who asked him this question has some stake 114 00:09:53.160 --> 00:09:58.340 in the profits of Facebook because that exchange gave rise to a crucial feature of the website. 115 00:09:58.340 --> 00:10:03.880 For that matter, every single user of Facebook has a stake. 116 00:10:03.880 --> 00:10:08.820 By carefully presenting many of the outside influences on Zuckerberg in a series of brilliant 117 00:10:08.820 --> 00:10:13.940 scenes that hit a huge variety of sectors and opinions, the film presents the reality 118 00:10:13.940 --> 00:10:20.800 of how ideas come to be, and shows how IP litigation has become a path for losers – a 119 00:10:20.800 --> 00:10:26.300 racketeering legal route for the resentful to loot the successful. 120 00:10:26.300 --> 00:10:30.580 After all, had Facebook not taken off and been a success, the Winklevoss twins would 121 00:10:30.580 --> 00:10:34.460 would have never imagined themselves to have been victimized at all. 122 00:10:34.460 --> 00:10:39.660 That fact alone shows that there is no real theft involved here. 123 00:10:39.660 --> 00:10:44.780 If someone steals your car, you are a victim whether the robber abandons the car or uses 124 00:10:44.780 --> 00:10:47.180 it to win a NASCAR race. 125 00:10:47.180 --> 00:10:52.180 IP only ends up being an issue when the defendant makes a go of it. 126 00:10:52.180 --> 00:10:57.140 Once any idea becomes a success, you can count on hordes of people to line up and claim that 127 00:10:57.140 --> 00:10:59.180 they had it first. 128 00:10:59.180 --> 00:11:04.620 Sure enough, the twins use the law to extort millions, and who is right and who is wrong 129 00:11:04.620 --> 00:11:09.900 – essential matters of justice – don't even figure into the decision to settle. 130 00:11:09.900 --> 00:11:15.140 Yet again, this is all too realistic. 131 00:11:15.140 --> 00:11:20.140 Especially telling is how the twins imagine how they will destroy Facebook out of resentment 132 00:11:20.140 --> 00:11:22.540 for Zuckerberg's success. 133 00:11:22.540 --> 00:11:26.020 They make no bones about it – they want to wreck it. 134 00:11:26.020 --> 00:11:30.120 So we see how IP ends up creating a moral hazard for the envious to set up barriers 135 00:11:30.120 --> 00:11:33.500 to social and economic progress. 136 00:11:33.500 --> 00:11:38.660 I have no idea about the real-life details of the case, but it is possible that the film 137 00:11:38.660 --> 00:11:43.420 underplays the extent to which Zuckerberg actually did gain valuable influence from 138 00:11:43.420 --> 00:11:46.980 the competitive effort to create the Harvard connection. 139 00:11:46.980 --> 00:11:52.500 And yet, as the film also shows, this is how great ideas come about. 140 00:11:52.500 --> 00:11:57.520 No great idea in this world is created out of nothing, contrary to the myth. 141 00:11:57.520 --> 00:12:03.660 Great ideas result from the interplay of a huge range of influences in all directions. 142 00:12:03.660 --> 00:12:08.900 The winner is the one who makes the commercial reality happen. 143 00:12:08.900 --> 00:12:12.540 Until then, it is all talk. 144 00:12:12.540 --> 00:12:16.660 A second legal issue portrayed in the film concerns Zuckerberg's squabbles with his 145 00:12:16.660 --> 00:12:21.580 best friend, who was named the CFO of Facebook before being squeezed out of the company when 146 00:12:21.580 --> 00:12:26.780 And the top players, among who is another legend, Sean Parker of Napster, concluded 147 00:12:26.780 --> 00:12:30.260 that he wasn't really up to the job. 148 00:12:30.260 --> 00:12:36.600 This case strikes me as a matter of manners and contract, but not intellectual property. 149 00:12:36.600 --> 00:12:40.200 The case was settled out of court. 150 00:12:40.200 --> 00:12:44.820 As Economic Policy Journal pointed out, this film could end up driving millions of young 151 00:12:44.820 --> 00:12:49.540 code-savvy students to become entrepreneurs, and further entice students into the world 152 00:12:49.540 --> 00:12:52.160 of Digital Enterprise. 153 00:12:52.160 --> 00:12:56.140 More than likely, this is not something people will learn in class. 154 00:12:56.140 --> 00:13:00.800 They will learn it from their extracurricular exposure to the fast-moving world of commerce 155 00:13:00.800 --> 00:13:06.040 and from developing an intuition about what really makes people tick and how to tap into 156 00:13:06.040 --> 00:13:09.360 that in the marketplace. 157 00:13:09.360 --> 00:13:16.520 You may not like Facebook, but it has, evidently, improved life for millions of people. 158 00:13:16.520 --> 00:13:22.600 In any case, for decades I've heard the intelligentsia disparage the latest thing, only to find those 159 00:13:22.600 --> 00:13:26.600 same people using that very technology a few years later. 160 00:13:26.600 --> 00:13:32.340 Today's technology bashers are tomorrow's late adopters. 161 00:13:32.340 --> 00:13:36.860 Just the other day, I visited an elderly gentleman, a prominent fiction writer in a retirement 162 00:13:36.860 --> 00:13:37.860 home. 163 00:13:37.860 --> 00:13:42.820 He treats his desktop computer as his lifeline to the world outside, permitting him to keep 164 00:13:42.820 --> 00:13:48.420 Keep up with all his extended family and communicate with friends all over the country. 165 00:13:48.420 --> 00:13:54.420 My mind raced back to a conversation I had with him 17 years ago. 166 00:13:54.420 --> 00:13:57.160 I had asked him what he thought of the internet and email. 167 00:13:57.160 --> 00:13:59.660 There was no web back then. 168 00:13:59.660 --> 00:14:05.580 He said that he regarded these innovations as the end of the world. 169 00:14:05.580 --> 00:14:08.820 He said it with an ominous tone in his voice. 170 00:14:08.820 --> 00:14:13.660 Well, perhaps he was right about that, but it was also the beginning of a new world that 171 00:14:13.660 --> 00:14:18.580 this very person has since learned to love. 172 00:14:18.580 --> 00:14:20.740 So it is with Facebook. 173 00:14:20.740 --> 00:14:26.920 Zuckerberg ended one world and began a new and better one for many millions of people. 174 00:14:26.920 --> 00:14:32.180 The social network shows how the commercial marketplace gave a code geek a chance to 175 00:14:32.180 --> 00:14:35.220 do that and how he did it. 176 00:14:35.220 --> 00:14:39.880 It is a film that celebrates the good guys, ridicules the bad guys, shows the reality 177 00:14:39.880 --> 00:14:45.480 of what any successful person will face, makes the legal system look like the pathetic enemy 178 00:14:45.480 --> 00:14:50.700 of enterprise that it truly is, and provides a tribute to entrepreneurship that is long 179 00:14:50.700 --> 00:14:52.940 overdue. 180 00:14:52.940 --> 00:14:57.420 This film is a glorious success. 181 00:14:57.420 --> 00:15:00.560 Which means, of course, that it is under attack. 182 00:15:00.560 --> 00:15:04.960 A Washington Post reviewer thinks that it doesn't show how private innovation is really 183 00:15:04.960 --> 00:15:09.360 is really just luck of the draw, and it fails to highlight the wonderful essentials of public 184 00:15:09.360 --> 00:15:12.360 infrastructure as provided by government. 185 00:15:12.360 --> 00:15:19.360 Yeah, sure, and this reviewer might back a similar movie called The Government Network, 186 00:15:19.360 --> 00:15:25.080 starring bureaucrats and their defenders at the post, and see how it does at the box office.