September 11, 2012

"It is an old question, which keeps coming up because business struggles to answer it" (*). Yet shouldn't we know "what business is for", when it is responsible for so much of the economic activity? Michael Skapinker puts the finger where it hurts. He also leads us straight into a trap.

A corporation may be a person in the eyes of the law, it remains a machine, as deprived of purpose and reason as Descartes held animals to be. Or to put it another way, within the constraints stemming from its initial design and the laws, whether of man or nature, a corporation like any other machine follows the apparent wishes of whoever controls it. No wonder then nobody has come up with an appropriate answer.

For the very question is bound to disappear behind the thorny issue of finding who is in charge, if any. From the majority of voting shareholders to management to other stakeholders, so many voices claim a say. Even in the simple case when authority flows from a single person, the search for purpose now applies to a human being, this most secretive and subjective type of actor, so cunnily dissembling, yet so lacking in self-awareness.

Michael Skapinker is too clever to let himself be caught in his trap. When complexity threatens to crush your column, nothing beats story telling. And what a Shakespearean cast of characters he picks. An aging king, two heirs in waiting and an uninhibited princeling from a rival ruling clan.

We have met Rupert Murdoch before. When early this year an anti-piracy bill was derailed in Congress, he railed on Twitter: "piracy rules". See him now publicly embrace piracy. "People can see the photographs on the internet", this gives him the right, nay the duty, to publicly bare in the Sun what Prince Harry did in the privacy of an hotel room, so he argues.

If you meet someone left wounded by some wanton pirate, kick him some more in the ribs for society's sake. With such a bad Samaritan, I would not put it past Rupert Murdoch to have planted the peeper in Harry's party in the first place. At least he provided part of the inspiration. Could one ignore the good News of the World, a former part of his public minded press empire, paid the spy who preyed upon Max Mosley's private revel?

And so when, according to Robert Budden and Andrew Edgecliffe-Johnson, Elisabeth Murdoch speaks about News Corp as "asking itself some very significant and difficult questions about how some behaviors fell so far short of its values" (**), she puts an anthropomorphic mask on a soulless company to better hide her father's ultimate responsibility.

"Profit without purpose is a recipe for disaster", she says. True, but she should add, so can be purpose beyond profit in the absence of morality.

For Rupert Murdoch does love print beyond pure profit, partly from youthful attachments, partly for the power it can bring under the deft hand of a media baron. Recently he may have sustained a major setback, but isn't he signaling to the British ruling class that losing a battle is not the same as losing the war? Before sinking his Fleet street ship, think twice of the flotsam which may drift ashore when you launch your reelection campaign.

Her hands spotless, Elisabeth Murdoch has more credibility than her brother James, who was on the bridge when the News of the World went down, under order from above. Yet it is he who understands the essence of capitalism the more clearly. A corporation is first designed to shield its shareholders from any risk beyond the capital they have invested, second to generate a profit for them as much as legally possible.

That's what business is for. If this simple answer satisfies no one, it is in view of its qualifier. "As much as legally possible". What does this mean?

On the one hand, who can precisely account for the future? Hence no one knows how to measure profit, let alone its maximum possible. Instead the people in charge substitute their own purpose, whether diligent or self-interested, prudent or reckless, far-seeing or myopic. On the other hand the law is a variable in itself. The people in charge may find easier and more rewarding to buy more lenient laws than to better their business.

"Is [business] there to make a profit or to serve society?" is a trick question for people of good will in charge of a business. Over the long term, they hold reaching a service agreement with society to be more profitable than endless wars. The same question is purely rhetorical for uncorrupted law and rule makers. It is up to society to tame business into its service using the proper legal harness instead of letting it roam rein free.

But Prince Harry's lack of dress sense reveals more than Rupert Murdoch's lack of innocence. Every one can see through the latter's pretense of defending "the interests of a free press" and of "allow[ing] the people to choose what to read". It remains that the Sun does choose what people should read in its pages. It acts like a recommender and its readers pay to receive its recommendations.

Hence "once more unto the breach" (1). Above any other business, recommendation systems are central to our Information Age. Yet no progress has been done on reaching a sustainable agreement between this industry and society. From Google to the Sun, most recommendation systems especially lack an efficient redress process. No more but no less as hoi polloi, Prince Harry needs such a tool to defend his privacy in his private capacity. But his official status highlights two more issues, the relation between states and non-states, the link between redress and censorship.

Although censorship has bad press in Western democracies, it is inherent to the role of recommender. Apple is one of the largest self-appointed censor in the world. And unlike Google, whose open system is governed by secret rules, it manages its closed list in an arbitrary manner. Read Nick Wingfield. "Apple rejected [Drones Plus] from its App Store" because of its "excessively objectionable or crude content" (***). But this application merely showed the location of "drone strikes [...] on a map", the same information found acceptable inside the Guardian newspaper Apple app.

Following a censorship dispute "when Indian officials said certain Twitter accounts were fomenting religious hatred", Somini Sengupta masterfully sums up the issue for us. "This is the reality of the digital age. Sovereign nations have their laws. Internet companies have their rules" (****).

So what if an anonymous source starts twitting about Prince Harry's current location in Afghanistan (2)? The British government can neither force Twitter to curb "free speech, even unpopular speech" without the latter's consent nor expect any efficient redress short of preventive censorship.

Past a certain scale, no recommendation system should operate outside a worldwide framework. Either recommendations must be confidentially exchanged between mutually identifiable parties, as are postal letters, or they must submit to preventive censorship according to legal, transparent, objective rules and a redress process common to where ever their audience resides. My recommendation will not be adopted any time soon.

Yet Twitter claims postal privileges for broadcasting facilities, Apple is not objective, Google not transparent, all are too large. What is society for?

Philippe Coueignoux

• (*) ....... Murdoch's schism has lessons for companies, by Michael Skapinker (Financial Times) - August 30, 2012
• (**) ..... Elisabeth Murdoch hails key role of UK public service broadcaster,
  ............. by Robert Budden and Andrew Edgecliffe-Johnson (Financial Times) - August 24, 2012
• (***) ... Apple Deems Drone Strike App Inappropriate, by Nick Wingfield (New York Times) - September 3, 2012
• (****) . Twitter's Free Speech Defender, by Somini Sengupta (New York Times) - September 3, 2012
• (1) to survey my frequent references to recommendation systems, see the major theme index attached to the Table of Content of these fillips
• (2) A similar problem interrupted his first deployment there, see Prince Harry in the wikipedia