Facebook and the Ford Pinto

Cold-blooded Calculations for Corporate ProfitPost’s Permalink

The truth is, it is neither a corporation’s mission nor its obligation to serve its customers. A corporation exists as a soulless synthetic legal entity whose singular purpose is to maximize its shareholders’ wealth. This is something the public too often and so easily forgets in the wake of the mind-numbing marketing created specifically to cause us to misunderstand the corporation’s true raison d’être.

McDonald’s doesn’t serve hamburgers to feed us, they feed us to serve themselves.

When tension arises between the needs, rights, and expectations of the corporation’s customers and that corporation’s goal of wealth maximization, simple economics prevails: “What will make the company the most money?”

Anyone who was at least a teenager in the early 1970’s will recall the rather horrific case of the Ford Pinto: When the Pinto was “rear ended” in an auto accident, sharp pieces of the rear bumper system often pierced the gasoline tank, located just inboard of the rear of the car, causing it to catch fire and often incinerating the car’s occupants.

When this seemed to be happening more often than it “should,” it came to light that Ford’s management had long known of this literally fatal design flaw in their car. But many of these defectively designed Pintos had been manufactured and sold. Ford’s infamous “cost-benefit analysis” — subsequently obtained by the press — revealed that the company would be more profitable if it paid the statistically predicted number of wrongful death claims that it knew were likely to arise in the future, rather than recall the Pintos for an $11-per-car modification. That must have been some board meeting.

What does any of this have to do with Facebook?

Just this: Facebook is not working for the interest of its 400 million users. Facebook is a corporation like any other, whose sole mission is to maximize its corporate profits. Unfortunately, the only “asset” Facebook has to monetize is the wealth of personal information that has been poured into the system by every one of those 400 million users. Facebook has understood this from day one, its user community has not.

The public relations disaster Facebook brought upon itself by overreaching and overstepping might not have occurred. They might have gotten away with it. Or it might not have been so bad. Or it might have blown over. Or, or, or. But you can bet your last dollar that what just happened wasn’t a mistake. This was a calculation like any other — a calculated asset leveraging they hoped to get away with.

What was their mistake? They were too impatient. They pushed too far too fast. In retrospect, they would have been wiser to creep these changes out incrementally and more slowly, allowing each one to be digested and giving the world time to grudgingly accept the creeping loss of Facebook privacy and control.

So, that’s what they’ll do now, they’ll fall back to Plan ‘B’.

Facebook still has only one asset — its community’s personal information. Sooner or later that asset will be fully monetized. It now looks like it’s going to be a little bit later.

If you have friends who have been sucked (suckered?) into Facebook, consider helping them out with the valuable and nearly vital privacy settings management tool at: http://www.reclaimprivacy.org. They’ll almost certainly thank you.

Steve's Sig

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97 Responses to Facebook and the Ford Pinto

  1. T.Rob says:

    Good observations, Steve. We often lose sight of the distinction between the artificial fantasy world depicted by the marketing versus the reality of corporation as a self-perpetuating profit machine. Who among your audience can say that the majority of their friends and relatives are capable of running a dedicated, sandboxed browser for Facebook? Not mine. And Facebook relies on that.

  2. Alex Knight says:

    Excellent point and I agree that Facebook was 100% aware of what they were doing with regards to the implications on the changes they made to privacy.

    Zuckerberg has been quoted as saying that he truly believes people should be more open to sharing information with the world in order to connect with more people. He sees the value in “openness.” They probably could have avoided a lot of bad PR simply by rolling out changes over a longer period of time, just as you suggested. The massive sweeping privacy changes they made all at once really put the kibosh on their credibility.

  3. CVi says:

    True, but it is also true that if you do not act in the interest of your users, you would loose them. (in theory)
    So the question is how do we convince 400 Million Facebook users that they have screwed you over big time and you should leave them?

    • CVi says:

      Just a note on myself there, yes theory is great, but practice != theory

      • dusanmal says:

        How fast corporation loses users when not acting in their interest depends hugely on monetary value. When Sony maximized its control/profit by proprietary devices inter-operating only with other Sony devices, users reacted and Sony, though still alive lost a lot of its power.
        Problem with Facebook (and Google) is that they offer free stuff. Hence, users will not flee as fast and offense needs to be outrageous to trigger fleeing.

        • CVi says:

          Google can die, because there is an alternative, Facebook can’t in the same way, because there is no viable alternative.

  4. Tim says:

    Where is the like button?

  5. Jonno says:

    “A corporation exists as a soulless synthetic legal entity whose singular purpose is to maximize its shareholders’ wealth.”
    Is this really a fact? I was just lamenting this apparent “fact” with my wife last weekend but I don’t see why this has to be the case. Surely many corporations start for other reasons. Someone has a passion, someone is out of work and has an idea to create his/own employment. At what point does the only point of the corporation existing become providing shareholder returns? I get the feeling that this is something convenient that executives tell themselves to avoid feeling guilty about decisions such as those you mention in the case of the Pinto. But that is probably a discussion for another place.

    Let’s assume that your statement above is true. It sounds simple but the real problem is what time-scale we are talking about maximizing the profit over. A greater short-term profit can probably be made for FB if they just barge ahead right now, user-concerns be-damned (since there is no currently no viable alternative to FB). Your suggestion of chipping away more gradually would probably produce a better long-term gain for shareholders. But how many shareholders look at the long-term returns of a company now anyway? The vast majority of trading of a company’s stock is no longer done by people who want to invest in the future of a company as we are finding out to our great cost recently. Mark Cuban had a great post about this here: http://blogmaverick.com/2010/05/09/what-business-is-wall-street-in/

    Anyway, nice post Steve. It’s great to see you with a more active presence on the web. Keep up the great work on SN.


    • Matt Miller says:

      I had the exact same thoughts. There are many companies that do not exist for the soul purpose of maximizing profit, they exist to provide good services to their customers. Companies are legally allowed to maximize profits.

    • Jeff says:

      Your Post is off Target. A Corporation and its executives should be held to high standard and prosocuted for horribly wrong decisions. However, If there were no corporations …. YOU WOULD NOT HAVE THIS BLOG to write these damning words. Who ever works for a private entity, corporation, sole prop, partnerships…they are all for the same; making profit to pay HUMANS!

      Dont be a douce!

  6. Jb says:

    Great points Steve. I agree that Facebook wishes they had not acted so quickly. Now they will have to tread lightly. But as you said, they will continue to tread… on our privacy.

  7. JD Long says:

    Steve, I’m a professional economist who also happens to be a tech geek. You seem to “get” economics really well and that’s obvious in this post.

    I’d like to add one tangential observation to what you’ve posted. With Facebook there’s an unusual disconnect between Facebook’s users vs. Facebook’s. The users are folks like me who have an account and use it to share baby pictures with the grandparents. The customers are the people who PAY Facebook. I pay them nothing, but advertisers and others who buy info from Facebook do pay. THEY, not me, are the customers. This disconnect between users and customers is generally not as complete as it is with Facebook. I still subscribe to paper magazines and newspapers which are highly ad supported, or at least subsidized. I still pay a subscription fee, however.

    From a Facebook-centric view of the world, the only reason they have for pleasing users is in order to grow the user base or increase the activities of users within the application. These two activities give Facebook more commodities (user generated behavior data) to sell to the customers. Every action Facebook takes is likely weighed against the impact in increasing activity vs. losing users. I suspect the leadership uses dashboards showing week over week change in number of users as well as some series of metrics to measure user “engagement.”

    I’d pontificate further but my mom just posted pictures of her flower garden on Facebook and I need to go hit the like button.

    JD Long
    Chicago IL

    • Suzanne says:

      Yeah, Facebook is more like network TV. The users (or at least their information) are the product. The advertisers are the customer.

  8. JD Long says:

    Hmm.. that was supposed to read “unusual disconnect between Facebook’s users vs. Facebook’s customers”

    Seems my brain got ahead of my fingers… yet again

  9. @jazzbyte says:

    Thank you very much for that link/tool. It’s really great!

  10. You’ll appreciate this great post on the subject from Andrew Brown. The nut graf:

    This may seem like a bad way to treat customers, but the whole point about Facebook is that users aren’t customers. Anyone who supposes that Facebook’s users are its customer has got the business model precisely backwards. Users pay nothing, because we aren’t customers, but product. The customers are the advertisers to whom Facebook sells the information users hand over, knowingly or not.

    • Steve Gibson says:

      Yes, that’s perfectly expressed.

    • JD Long says:

      Exactly correct! Very succinct quote. Thanks!

    • @jonnojohnson says:

      True, but to abbreviate JD_Long, without users Facebook has no customers.

      • Jeff says:

        And without a product … YOU HAVE NO FACEBOOK! Its either thousands of ads or your behaviors. Whats wrong with being targeted with products and services that more fit your needs, than PORN?

    • autodidakto says:

      distinction without a difference. we can define a customer as anyone who gives you value in exchange for value (goods/services), and therefore both users and advertisers are customers. but again, the dynamic between facebook/users (or any other company supported by advertisement and their users) is the same Company/client dynamic.

    • zorchmont says:

      This is the key thing. With facebook (and other free services), the customer being served is not the end-user, but the people who are generating revenue (usually advertisers). The hook is that by providing a service “without charge”, users are providing something of value to the provider, that the provider can sell to others.

      In this, the service isn’t truly “free”, merely that the currency being used for payment is not money. In the long run, the cost of “free” may be much higher than the end user appreciates.

  11. Bill says:

    Am I one of the few that realizes that if you don’t want information on the internet to become public DON’T TYPE IT INTO A WEBSITE? Waaaaay too many sites have effectively no security against snooping/phishing/etc… so if it’s that personal don’t type it in. I only put misleading/false information into sites that “require” information because they aren’t entitled to it and have no reasonable use for the information (other than things I don’t want them to figure out).

    Do I sound paranoid? No, I’m just ensuring that I have the control over my information and not some wanker that’s trying to make a quick million selling/using my information.

    Remember “tanstaafl” — (“There Aint No Such Thing As A Free Lunch”) — nothing’s free, somebody has to pay for it… somehow. Also remember “Stupidity is billable… If you insist on being an idiot, it’s going to cost you”.

    • Jeff says:

      Nice post Bill…. I am on facebook ..rarely use it, and understand exactly what you are talking about. Take me to jail but none of my information put into web forms, including the one for this blog is real! WHY WOULD IT BE….
      Dummy Names, Dummy Email Accounts, Dummy Addresses, Dummy Phone Numbers === No Dummies getting my real information!

  12. Mike Z says:

    Excellent as always Steve! For those who haven’t seen the movie version this is a great one: http://www.thecorporation.com/

  13. True, but to paraphrase jonnojohnson, without chickens KFC has no customers. That’s no great solace to the chickens.

  14. Erik says:

    Is this really true? Maybe from a strict methodological standpoint where you use a simplified model to understand reality. But is it also an empirical truth?

    Why can’t you produce something to make people happier a n d, at the same time, make a buck of it? You created Spinrite to make money, and a happy costumer leaves you indifferent?
    Let’s say I created NoSpin, a program that unknowingly destroys peoples hard discs, that I know that and that people for some strange reason buys it and use it. No difference between Spinrite and NoSpin?

    I believe that a business can start from an moral or ethical standpoint. The fact that it also must survive in the market does not invalidate that observation.

    There’s a grain of truth in your observation, but only a few grains. The idea of capitalism as a 100 percent greedy system is a little bit to Marxist to me.

    • @jonnojohnson says:

      Like 😉

    • Totally agree with you, Eric!

    • Suzanne says:

      A corporation had a legal responsibility to its shareholders.

      You’re right, that doesn’t mean they’re all evil and greedy and do no good. It doesn’t mean the people involved aren’t decent and well meaning and well doing.

      Outside of the fact that users aren’t really Facebook’s customers… it does mean that there’s nothing that requires a corporation to keep it’s customers happy or do right by them ethically. As long as a business finds a way to keep its customers happy enough to continue to make money, it’s good. In fact, sometimes a business can make *more* money by downgrading its product and doing other things that cause it to treat its customers shabbily.

      Someone on TWiT a while back put it really well and I wish I could remember the exact quote. Most people are good and do right by each other. But whenever there’s the possibility of taking advantage of others for your own gain, sooner or later there’s going to be some jerk who’s going to do it. Because of that, we need to understand the underlying incentives in our world and either figure out ways to change them to incentivise better behavior or watch out for them so we don’t get taken advantage off any more than we’re willing.

      • Jeff says:

        Grow Some and stop purchasing faulty products, do your research before impulse and do not buy faulty products! And could it be, because you want a pay raise your company has to find another way to generate profit to pay you more? Facebook does have dual responsibilities to both its customers and its users. If its data is faulty or incomplete customers will cease to purchase the information and if the user is not happy then facebook will not have proper and complete data to sell! Quit being a hater and start being a real!

  15. T.Rob says:

    @Bill, this goes way beyond the false info you put in your profile. Sites like Facebook are not very useful without the connections and networks that you build. While the info you put into the site is somewhat useful on its face, it’s the relationships between you and the pages you visit, the things you “like”, the comments you make and the people you connect to that is where the value is for Facebook. Even if all your info is false, your metadata is still plenty revealing and valuable.

    And even if you used a dedicated browser for all your Facebooking, inside a dedicated VM, and disabled all cookie cacheing and deleted all LSO Flash cookies… the people you connect to probably reveal plenty of valid information that their connection to you makes available to the pages you visit and applications you use. The ability for an advertiser to send your network an ad that says “Bill likes this product” has value.

    You can’t game the system except to not play the game at all.

    • Jeff says:

      Who cares about your actions … the issue is your information! They can watch what an anyomous user does all day and supply ads to this anyomous user or whatever else will make them money… its your personal information that matters. They can say John Doe likes this .. .but not James Martin at 4543 some street in some city at this telephone number likes this!

      This is Bills argument!

  16. btcomp says:

    I think Facebook is going through a growing phase. I don’t believe the makers have an ulterior motive to take our privacy and turn us into 1 “1984” movie. Remember, if you as old as I, that it was “1964” and when that didn’t happen it was “1984”. That isn’t to say that it can’t and isn’t happening. But any utopia answer to our world problems, back in 1840s it was the telegraph, in 1876 it was the telephone, then later would come radio and then of course television. Now the computer and lately the Internet and Social Media.

    One book I do want to try to re-read was recommended by a wise mother of a boyhood friend of mine, God rest her soul. She told me to read “Walden Two”. It was quite revealing and I had searched the used bookstores and libraries and gave up, finally buying a copy on Amazon. I haven’t had a chance to re-read this book I read some 40+ plus years ago. But it is revealing. B.F. Skinner writes the book and in it you can see the utopia world designed for people, and then learn the psychology about how it works.

    Facebook isn’t going to disappear, there is too much invested in it and used by too many people and it’s an evolutionary structure just like the telegraph to telephone to radio and so on and so on.

  17. Umair says:

    Stakeholder-corporation goal congruence is in the interest of the corporation. A corporation must minimize goal conflicts for long-term maximization of its wealth.

    We share the most with people who we trust the most. We might not even tell our name to a stranger with suspect behaviour, but a stranger who gains our trust could even become our best buddy or family. Therefore, if information is asset for sites like Facebook, the asset could only be increased through trust. For Facebook to make money it needs not only our information but also both our continuous activities on the site and our updating the information. We will continue doing so as long as it has our trust (or as long as it can keep competition out).

    There are laws for a corporation if it launches an IPO or for a financial institution to get deposits from public, and then there are audits to ensure compliance with the laws. Why can’t these multi-billion dollar businesses soliciting information from public in exchange for services be subjected to some rules about how they treat our information? Even if they claim they don’t sell our information to third parties, has any audit been done to validate the claim?

  18. 8 Bit Scientist says:

    I recall that a manager at Ford left a note on his desk that read “let them burn”. It’s worth noting the amount of deaths, divorses & devestation that FaceBook brings every week – the news it littered with examples. I wonder what note would be left on the desk of FaceBook’s managers?

    • btcomp says:

      8 bit scientist, I have lived most of my life in Michigan and most of it surrounded by Detroit people and Detroit people that worked at Ford, GM, Chrysler, Hudson Motors, Continental Motors, and eventually would be considered American Motors workers before being bought out by Chrysler. I find it unbelievable that you would know someone that actually put the words,

      “let them burn”

      Is this the truth, or maybe something you heard and can’t really verify. This would put that person on the level of the Third Reich in Germany during the hellish days of WWII.

      I realize that many executives, which include automotive people could be ruthless, but saying that you have quoted is beyond ruthless and it totally, criminal!

      • Roentgenator says:

        btcomp, my father was a part of the prosecution team in State of Indiana v. Ford Motor Company. He states that an engineer who was responsible for the Capri and other models, testified to this fact. The “let them burn” was written on a notebook and witnessed on the desk of a vice-president.

        This is of course, based on eyewitness testimony, but lends credibility to what 8 bit scientist recalls.

      • Roentgenator says:

        BTW, The State of Indiana charged Ford with reckless homicide. What they did was criminal, despite being found not guilty.

        • btcomp says:


          Was your dad a lawyer for the prosecution? Was the “Let them burn” entered into the record? I do recall, the Pinto, having safety problems with the tank in the back, even lived in Indiana during 1981-1983 and recall hearing about this probably while living there.

          No, there is no excuse and it is criminal if the team knew this was a hazard and decided to cover-up. I am not sure why a jury of peers would not side with the defendant, when at the time juries were willing to go after the big company’s against the poor individual.

          Again, it would be helpful to have the transcript of the trial.

          I always thought it was a great idea to be able to full up from the back of the car, it sure becomes difficult when some cars fill on the right side and others the left side, and doing so from behind was an easy solution. However having the tank so close to an obvious hazard made this a bad choice. Not sure why they didn’t just stick to having the left side be the side to put gas in. Yeah, I know some countries drive on the left. But then they can have their fill side on the right, we don’t drive our cars to Australia or Great Britain.

          It sure would have been a point in the trial if the prosecution could have had this ‘notebook’ as evidence as that would put some credibility to what 8 bit scientist said.

          • Roentgenator says:


            My dad was an Indiana State Police trooper who was first on the scene of the Pinto accident that led to charges being filed. He was a law student, and reader of Mother Jones magazine at the time, and was aware of the leaked Ford memo that the magazine had an article about in the September-October issue in 1977. He presented this information to the county prosecutor, who was already aware of the multiple civil complaints against Ford concerning the Pinto, but was not aware of the Mother Jones exposé.

            My earlier response is based upon me calling my dad this evening to discuss the “let them burn” point with him. Give me a little time and I can elucidate more on the details of the specific notation of “let them burn”.

            What I do know is that Ford did indeed know that the gas tank would rupture, and the filler tube would separate, in crashes as low as 2

  19. Sam Schinke says:

    Hi Steve,

    I thought I would point out some issues with that reclaim privacy bookmarklet. To be clear: I do NOT like it.

    It is not really a bookmarklet, in my opinion. It is a shim that loads remote javascript and then sets it free on your facebook preferences page. It does not use HTTPS to do this (and wouldn’t be cool even if it did).

    It loads the following mass of DHTML, JQuery and AJAX (and insert web 2.0 catchphrase here), and appends it to whatever page you activate it on:


    While it does look like a neat piece of programming, and I am expressly *not* saying it does anything untowards, it is much too much for me to verify everything it does, nevermind that ‘privacyscanner.js’ could be something completely different tomorrow.

    Yet worse, if used anywhere but a secure LAN, it could be maliciously substituted at a time users are expecting to have to be logged in and expecting whatever happens to manipulate their facebook UI (And yes, if you are having your traffic injected/MITM’d, you probably have bigger worries, but still, low hanging fruit and all) .

    Now, this last could be mitigated by the use of HTTPS, but I don’t like the idea of a tool intended to improve the privacy of users at one website being hosted at another website.


  20. Aaron says:

    GRC == Gibson Research CORPORATION

    Just sayin’

    • Sam Schinke says:

      The key term in the posting being “shareholders”. Publicly traded companies are legally obligated to maximize shareholder returns, and can be taken to court if they do things such as benefiting customers in a way that shareholders view to be overly costly.

      GRC isn’t publicly traded, so Steve isn’t legally obligated to maximize anyone’s enrichment. He could, of course, choose to do so anyways, but you or I could make precisely the same sorts of choices.


      • Aaron says:

        I’m not defending Facebook, Ford or whomever — I simply wished to keep things in perspective (since this seemed to be as much an anti-corporation rant as a rant against Facebook’s privacy policies). And while I’m thinking about it, Facebook is not a publicly-traded company, either.

        • Sam Schinke says:

          Facebook isn’t traded on any exchange, but does have multiple shareholders (VC). The obligation is the same.


          Smaller firms, while they may be called ‘corporations’, are often owned by one or two people. It isn’t always possible to tell without checking records, though.


          • Jeff says:

            A Corporation is a Corporation … Change the term or make clear in your statements that you are singling out Publicly traded entities and what this means. I am tired of the demonization of Corporations and then people using Corporations to spread their HATE!

  21. Ericdsa says:

    I like most of what you say, but take issue with the thought that a corporations only duty is to maximize profits for its shareholders. My understanding of the law (not a lawyer) is that a corporation is an artificial being that enjoys many of the rights and responsibilities of real citizens. The purpose of creating corporations, is to limit the liability of its owners from the full legal and financial responsibility for what happens to the business. But I believe these entities also have responsibilities to society, customers and employees, just as any natural human citizen does.

    Besides, some corporations are non-profit, and so maximizing profit makes no sense in those cases. As some one else pointed out, the “C” in GRC stands for corporation – but I bet Steve likes to maximize other things besides profit. Profits are great, but any corporation that thinks its only job is to maximize profits for shareholder should be a legal corpse.

  22. Spanky says:

    You are right that corporations exist solely to make a profit, and have no concern for anything else. And its true that many do not realize it.

    Of course, what almost no one realizes is that this is inherently unsustainable. Civilization requires a structure, and people must be willing to support that structure for it to continue. But when your only motive is profit above all else, you will subvert the structure in order to make more profits, and by extension, you will end up subverting civilization. If the last 30 years has proven anything, it has proven this.

    It amazes me how so many people can find corporate mentality worthy of respect, when in fact it destroys everything it touches.

    • Cmate says:

      No, actually it’s those who “fix” the economy that are destroying everything they touch. Corporations should have no power other than to rise or FALL as a result of their value to their customers. Unfortunately, those able to spend millions on political muscle get to join the crony-socialists club and are deemed ‘to big to fail’. Instead of failing as they should get bailed out to the tune of
      $1.5T. After a couple of speeches about “evil corporations” and a show trial or 2 they laugh all the way to the bank. And little people who all this was supposed to help (and their children) get to pay for it all.

      • Javik says:

        Along with corporations, there is a second group of leeches that exist solely to profit and care nothing for the destruction left in their wake. These are called investors. If the corps crashed it would crash the investors too, and it’s the investors being saved by the bailouts.

        We shouldn’t have to care if Goldman and the big boys are hurt by the destruction of their investments, but average non-wealthy people have been suckered into joining the game alongside the fat cats.

        Where Goldman can afford to lose billions and they can still drive to their estate at the end of the day, the little guy is literally wiped out and living in a cardboard box. It’s is the little guy getting the bailout, not Goldman.

        The whole financial system, from corporations to stock trading to investing, all focus on profit without regard to sustainability.

        We have all been conned into saving the system by being suckered into joining the game with the fat cats.

        • Jeff says:

          Do none of YOU HUMANS understand where you get you MONEY FROM? Their is not enough Natural Resources to FEED all of you FOR FREE… nobody wants to FEED YOU just to read your blog, or to watch you paint someone elses TOES …. WHERE DO YOUR MONEY COME FROM … and if its from the Government .. .WHERE DOES THEIR MONEY come from … and if they arent printing money… THEN HOW DO THEY GENERATE PROFIT?????

  23. Spazz53 says:

    Welcome to the world of bloging and good luck.
    I have not seen your policies on copyright and re-printing( e.g. cut and copy with full attribution with link(s)on a different blog)Creative Commons or do you hold all copyright without giving the reader any rights?. Can you please make your wishes known?

    Thank you and keep up the good work.
    (Mr.)K. Talat Muskara
    Alanya, Rep. of Turkey
    p.s. Creative Commons web site:


  24. Kevin "wikedproxy" says:

    Hello. Glad to see you have decided to blog. I am wanting to start a blog, but I am using a PS3. I have no computer. I am trying to find a free blog site that will work with the PS3 browser. My focus is on the internet experience using my PS3. Any suggestions would be most helpful.

  25. wickedproxy says:

    Attempted to use wordpress, but alas I can not get the onscreen keyboard to come up on the most important part. Writing the page. 😦

  26. autodidakto says:

    You should continue the free market lesson, Steve:

    In a free market, you get rich by giving other people what they want. That is, by serving them. That’s the *beauty* of capitalism. Instead of ignoring greed, or blaming greed, or teaching ourselves to be love each other, capitalism uses the human constant of greed and personal interest in order to further public welfare (and has done it better than any other system). This is the “invisible hand” of Adam Smith. You stop serving people: You disappear. You want something? You give something.

    Facebook is having problems NOT because they are “too greedy”, but because they stop serving their customers. Ford thought they could make profits and not serve the customer. They were wrong and paid for it.

  27. Alexander says:

    I’d just like to thank you for making free software Steve. I’ve got a separate “GRC” folder in my utilities folder that contains your Wizmo, unpnp, and DNSBench. Mostly I just use Wizmo though, namely the “monoff” feature. It means I can turn off my laptop screen so I can get some sleep at night while running a program. I guess you could say that you’ve given me the gift of sleep and I thank you for it.

    I know that was off topic so…

    Facebook, Twit has talked about the issue too much. A private facing service tries to turn public in order to make money. They change the contract they have with their users which their users agree with by using the service. The contract is complicated and shifts away from prior private ideas which opens up issues of privacy. Users complain, even though they still use the service. Company responds and douses the outcry by providing a simple way to secure privacy. They’ll try to monetize both somehow for sure. If nothing else this is a great reminder that the internet is as public as walking down the street. We can put up much the same barriers but still…

  28. Doc Smith says:

    Nice, idiotic anti-corporate rant Steve-o. Don’t bother looking at facts. Just let the fingers fly and type whatever moronic drivel passes through what accounts for your gray matter these days. I pretty much quit reading when you used the Pinto comparison. A grand total of 27 people were burned in Pintos. I know that doesn’t fit what your media saturated mind thinks of a “killing machine” but facts is facts. And you’re just another left wing lib tard.

  29. Ericdsa says:

    Doc smith – You stopped reading, yet you can comment? Why did you not just move on to some other URL ?

    The number of things a gun has killed or not killed does not change the fact that it is a killing machine. Yes, the Pinto was not originally designed to kill, but knowing the flaw, and not correcting it is like designing it to do just that, kill. Only 27 people? Do you care so little for human life?

    I think Steve’s intent was to point out how corporations put money before everything else, and this is by far the most famous case. If you want to be an apologist for corporations, that’s fine, just don’t be a TROLL!

  30. runbei says:

    More than a bit cynical. In effect, it says “Corporation X is always right, so long as it doesn’t arouse a public outrage by its actions.” There is no good, no bad, only cash flow, income, and dividends for investors. Truly, anyone who believes this is overdue to read J. Donald Walters’s “Education for Life.”

  31. John Blake says:

    If you think soulless corporations willing to incinerate you for $11 per recall are bad news, think mindless bureaucratic Statists determined to rule or ruin regardless of law or principle: Sorry about that healthcare claim, too bad about that pension promise. Fork over or rot to jail; meantime, shut up and die.

  32. Forked says:

    yeah facebook fuxing sukz! what kind of d1k head would put all of their stuff on that shlt site anyway?

    the public are a bunch of fuxking mor0ns

  33. Fuxy says:

    This is exactly why we need communism. Corporations are not our friends! They would kill us if it made financial sense!! America will never see this.
    The land of the “free”. lol – They forget that their 2 parties offer them a real free choice. /sarcasm

    Down with Capitalism. I’m thankful that Steve agrees with me on this.

    • Jeff says:

      LoL Communism has done well Where? Dont be affraid to lose, to choose, and to live life! I could tell you what to do … but that just wouldnt fit into your argument!

  34. Jenny says:

    Is Steve cute, or what? I think I have a serious crush.

    The rest? Confusing. What is pinto? Who is facebook?

    Someone needs to fill me in.

    • Steve Gibson says:

      I’m not sure it’s appropriate for my ex-girlfriends to talk about my “cuteness” in a public forum — if nothing else, it’s way off topic! And besides, the world is going to think you’re serious, and brainless, neither of which are true. But… thanks for coming by, and do try to stay out of trouble! 🙂

  35. Tim says:

    Well, in book I have read the company has shown how they own property on Main St America (and beyond obviously) in every single town. A CEO was quoted as saying Were a real estate company who just happens to sell hamburgers. Pretty funny quote. Also worth noting is that McDonalds charges a million plus for a franchise and they tell you who to buy their product from and you have no choice. Then the obvious way they get their meat and jow it meat makes it’s way into the fries, etc. You could have more fun writing a McDonalds article then Facebook and we can easily not go to either establishment.

    That said, Facebook bashing is so popular right now, just writing this article defeats it’s own purpose because apparently you care, or at least appear bitter and jealous over it and this from a Steve Gibson fan going back to your DOS tools. Most people I know use it and it serves it purpose. I guess if you sit on it 10 hours a day, then it’s not perfect. To make contact and keep up with friends, it works just fine.

    Lets also consider the alternatives, they all suck too. Facebook just won the rat race and it will take a lot to get people to start all over.

    “McDonald’s doesn’t serve hamburgers to feed us, they feed us to serve themselves.”

    • Jeff says:

      Then dont buy from Mc’d’s its that simple! You should eat their anyways its not great for your health! Eat at the health food store thats a corporation, and give them profits so they can purchase those great organic foods for you… and eat the losses they incure when not all they purchase gets sold!

  36. jorjitop says:

    I quite agree that corporations are there to make money and service their shareholders over their customers. But, as John Kenneth Galbraith postulated in The New Industrial State more than forty years ago, corporations should tend to look at long term profitability despite it costing in the short term. This means keeping their customers happy over the long run, even if that runs counter to trying to maximise profits in the short term.

    At the same time, your argument against Facebook should also be used against Google. When Sergey Brin and Larry Page founded Google, they may well have intended to “do no evil”. But, since they brought in Eric Schmidt, and became a public company, they became a commercial organisation whose interest is power and profit maximisation. You should be just as critical and worried about them as you are about Facebook.

    • btcomp says:

      Yes, and Gmail’s new Buzz is an example. When it first showed up, I thought what is this? Then later one of my employers was on there, and I thought hey this might be cool. I asked him about it, and he said he was abandoning it because of privacy concerns. I never have accepted ‘Buzz’ because I like my email, to be email not advertisements but rather to and from, just like the U.S. mail.

      BTW, I am glad more people are using ‘undisclosed email recipients’ when sending mass mailings. I have always thought that should have been the default, instead of sending that ‘cutsie’ email to everyone in your mailing list, so that we can all see everyone else’s email address. No wonder spam has ruled.

  37. “the whole point about Facebook is that users aren’t customers… Users pay nothing because we aren’t customers, but product The customers are the advertisers to whom Facebook sells the information”

    Well, this seems to be applicable to Google model as well, exept that Google doesn’t sell [private] user information to advertisers, but rather sells appropriate place for advertising. Still, Google seems to be significantly less “evil” than Facebook, even altruistic in some cases (China), provides real innovations in the way we use Web and support WWW open principles.
    Nut point is: economics is most important but not *sole* factor, people attitude plays significant role as well.

  38. Pingback: Steve Gibson: Facebook and the Ford Pinto — omglog

  39. Brian says:

    I think this has certainly been true in the past, but there is an on-going debate within the MBA community over whether the goal of a corporation should be to maximize shareholder value or stakeholder value. The drive is that maximizing shareholder value often forces short term (quarter to quarter) decision making that actually hurts longer term value. See Enron, WorldCom, Lehman Brothers, and BP for recent examples.

    The Economist recently did a very nice article on this:

  40. Aaron says:

    All very good points in this post. I know your very busy, but I would like to know your thoughts on Pastebin.ca being used to save logs of Facebook accounts on the Internet. It seems there are hundreds and hundreds of Facebook accounts listed there. I’m not sure if this is old news. I couldn’t find any discussions on the topic anywhere.

    I’m not here to plug my blog, but you can find the details posted there. I thought this may be of some interest to you due to this post topic.

    Huge fan, love Security Now!

  41. Pingback: Facebook and the Ford Pinto | Steve GRC Gibsons Blog « Jeff Tangen

  42. Todd Eddy says:

    I don’t remember when I got this mindset, but several years I had an epiphany of sorts. Whenever I see anything being offered for free I ask myself “What will this person/company/whatever receive in return for me using this service/product/program?” For some–see the free open-source community–it’s simply doing something for the greater good. I’ve done some simple programs and if even 10 people used them and it provided something useful to them, I’d be thrilled. On the other side of things facebook’s value is getting your personal data to monetize it with targeted ads. I saw this when I first signed up several years ago so I never assumed privacy on facebook. That said I’ve still restricted my use of facebook. Their whole process of making everything opt out, especially on some pretty big items like your friends being able to share your information behind your back really irked me.

    For the people that caught them off guard just ask yourself when the next big thing comes along. How do they benefit from you using the service for free?

  43. Raymond C. Schmitt Jr. says:

    Hey Steve, I enjoy your POD cast tremendously and I can’t believe how intelligent I have become. Putting that nonsense aside the reason for this message is that I’ve found an interesting add in a flier from “whatever works” catalog.
    I would like to send a copy of the Add, but I’m not sure how to send you the PDF file…you won’t believe what it is…

    Your “Dog Killer” POD cast impressed me so much that I wanted to share one of my electronic adventures with you.

    When I was in high school, around 1974, Wayne and I (Ray) decided to link our stereos together with speaker wire running from his house to my house. We acquired two microphones and about two miles of 1 pair 24ga speaker wire. Our houses where about 7/10 of a mile apart from each other. We wanted to be able to communicate privately with each other and share our music between the two locations.
    We needed to run 4 wires (2pair) to be able to send a stereo signal from one location to the other. With a simple switching mechanism we could talk and listen to each other at the same time. This came in handy to link the two locations to join a party if one of us was grounded, which happened a few times depending on our current exploit.
    We set up a plan that would route the 2 pair of wires through the neighborhood using telephone polls, neighbor’s houses, trees and what ever else was available. We performed a survey for where the wires should run to achieve the shortest distance allowable. We found that we needed to cross over 3 city streets and one ally way to complete the install. We had to make sure that the wires would not impede cars and or trucks that may have to travel under them. Since Wayne or I were squeamish of heights we employed the help of our friend Johnny who could install the wires high enough to accomplish our task.
    Johnny also had a source to acquire the wire that we needed at a very reasonable price. The longest single wire we could find was on 1,000 foot spools. We needed a safe strong way to splice the wires together. We came up with a plan to splice the wire using solder and heat shrink tubing for insulation and corrosion protection.
    We then got permission from the all the neighbor’s involved to use their houses to mount the wires on. Our next concern was that the output power from the stereos wouldn’t be strong enough to reach their destination. We did test run using one 1,000 foot spool and it worked great, at that we decide to go though with the install.
    After taking several days to install the system we tested it and it worked perfectly. We had a lot of fun with it and even fooled some friends with some fake radio broadcast.
    Note my parents found out about our little adventure when one day a neighbor phoned my house to tell me that one of the wires was down and laying in his yard keeping him from mowing the lawn. My poor mother, who answered the phone, was very perplexed and had no idea what he was talking about. She did tell me about it and I immediately phoned Johnny, our repair lineman, to go out and fix the problem.
    After awhile the maintenance of the line got to be to much and we had to abandon the hookup, but we sure had fun while it lasted.

    Thanks for listening…keep up the good work…
    Ray…Barberton, Ohio

  44. bob says:

    u dont know nothing

  45. wikedproxy says:

    @Bob On the contrary. Mr. Gibson knows a great many things. Including what he talked about in this post. Anxiously awaiting a new post in the wake of what google and verison have done as of late. Keep up the great work you do Mr. Gibson. Twitter me @wikedproxy

  46. rrobaire says:


    did you know chase bank has hijacked your corp logo?

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  52. And they should because….. ?
    The things they say in that article are accurate. That doesn’t mean corporations are evil. That means corporations are. You can shout at the wind or you can design a windmill or a sailboat.
    Yes, corporations exist to maximize profits for shareholders. They do this by offering something that consumers want or are willing to pay for. When consumers don’t even remotely give a f— how a corporation behaves before buying their product, why should the corporation give a f— on their behalf?
    Regulation starts with a conscious consumer. Responsible capitalism starts with responsible capital expenditure. If you want someone to blame for anything a corporation does or does not do, blame those that make the existence of the corporation possible. The source of the profits. The market.

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