In a public hearing in front of the House Judiciary Committee Google CEO Sundar Pichai kept stating that the company has no plans “right now” to launch a search product in China while also testifying on a number of other important issues, such as bias in the company’s search results, artificial intelligence and its possible dangers, as well as alleged manipulation of search results — especially during the presidential election of 2016.
One focused (and alarming) issue that was brought up in the hearing quite a bit was that of the highly controversial subject of the search product for China known as “Dragonfly” — of which Google has been working on essentially, behind “closed doors” since 2017, according to The Intercept.
The Intercept also stated that Dragonfly not only censors search results that are primarily focused around human rights, but it also provides a platform for Chinese authorities to track and have access to consumers using the service.
During the hearing, US Representative of Pennsylvania’s 10th congressional district, Tom Marino asked Google’s CEO how helping the Chinese government censor certain search topics could correlate with Google’s core values.
CEO Sundar Pichai had this response:
“We always have evidence, based on every country we have operated in, us reaching out and giving users more information has a very positive impact, and we feel that calling, but right now there are no plans to launch in China.”
Mr. Pichai also stated that he would be fully transparent with policy makers if/when Google ever does decide to launch a search engine product in China.
“Google Employees Outraged…”
Company Is/Was Making a Censored Search Engine Behind Their Backs — The Lack of Internal Ethical Transparency
As if the Google sexual harassment case wasn’t enough, Vox reports — Google is now facing a “moral and ethical” crisis. At least that’s the view of several hundred employees who are protesting against the development of the censored search engine, Dragonfly.
According to The Intercept, leaked transcript documents of a private meeting back in July of 2017 showed that Ben Gomes, Google’s search engine chief, told his close-knit staff that the plan was to launch the search product (Dragonfly) as soon as possible, and that its development involved around 300 employees — CEO Sundar Pichai once stated that the project had only a hundred people working on it.
According to Vox, only a small group of Google engineers were developing the platform for Beijing, and information about the Dragonfly project was so secretive that only a few hundred Google employees even knew about it.
The New York Times reported that about 1,400 Google employees (only a fraction of its full workforce) signed a letter to company executives seeking more details and transparency about the project and demanding that the company allow more employee input when it comes to the decisions about what kind of work they take on. They also expressed their concern as to how the company is also violating its own ethical principles.
“Currently we do not have the information required to make ethically-informed decisions about our work, our projects, and our employment” Google employees wrote in the letter to their corporate executives, which was obtained by The Intercept and The New York Times.
Vox also stated that employees mounting concerns about whether Google has “lost its moral compass” in the corporate pursuit to enrich shareholders is, yes, a concern, but went on to show that its employees also have a certain power in shaping corporate decisions that shareholders don’t have.
In fact, they went on to emphasize how a dozen or so engineers ended up resigning over what they viewed as an unethical use of artificial intelligence (AI), which prompted Google to let the project Maven contract with the Pentagon expire in June, and led executives to publicly promise that they would never use AI technology to harm others.
Google employees, however, say these kinds of promises are no longer enough, and with the light now shed on Dragonfly, they are demanding a more formal role in decisions about the ethical implications of their work.
Alexia Fernández Campbell over at Vox had this to say:
“The fact that Google employees succeeded in forcing one of the most powerful companies in the world to put ethics before shareholder value is a remarkable feat in corporate America, and signals why workers need an official voice in strategic decisions. Whether or not Google ultimately drops its plan to help China censor information will be a test of how far that power extends.”
Stakeholder Capitalism vs. Shareholder Capitalism; and The Accountable Capitalism Act launched by Sen. Elizabeth Warren (D-MA)
The truth is, there are two very conflicting views about how companies should be run. For one, there is the view of what is referred to as ‘Stakeholder Capitalism’, which is best described by Henry Ford. It is the idea where a company’s sole purpose is to produce quality products or services at the lowest cost possible, while paying employees a wage high enough where they can become a customer.
“There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”
The other view is this concept referred to as ‘Shareholder Capitalism’, which is, in most cases, the current philosophy that runs corporate America today. It’s based off the idea that companies only exist to make their shareholders/owners more money.
These major differences is the core focus in Hedrick Smith’s new book, “Who Stole The American Dream” (AFF).
According to Mr. Smith, Shareholder Capitalism is what has led to the decline of the middle class.
In a discussion with NH Labor News, Mr. Smith explained that it was ‘Stakeholder Capitalism’ that drove the American economy after World War II. He went on to say, “From 1945–1970, the productivity of American workers went up by 96%. At the same time, the average median income grew by 94%. Growth in productivity lead to shared prosperity.”
According to Mr. Smith, it was Stakeholder Capitalism that, essentially, created the middle class. You see, during the 40s through the 70s everyone, from the poor to the wealthy, were beginning to experience success and prosperity.
It wasn’t until the 70s that companies began to shift more to a Shareholder Capitalism approach and which has continued to contract the middle class more and more, year after year— almost to the point of not existing.
The truth is, for the past few decades, front-line workers (stakeholders) have had little to no real influence in how their public company/employer invests its profits, or make decisions about new revenue systems and/or models.
According to Alexia Fernández Campbell over at Vox, “Modern American capitalism has been driven by a singular mission: to bring value to the people who own company stock.”
Vox’s Matt Yglesias lays-out how this the type of logic leads executives to pursue profits above ethical and moral objectives.
Therefore, for executives to set aside shareholder profits in pursuit of some other goal like environmental protection, racial justice, community stability, or simple common decency would be a form of theft. If reformulating your product to be more addictive or less healthy increases sales, then it’s not only permissible but actually required to do so. If closing a profitable plant and outsourcing the work to a low-wage country could make your company even more profitable, then it’s the right thing to do.
While its true that CEOs and company executives are required by law to make profit for shareholders a priority, that doesn’t mean they are required to give up their souls and humanity in the process.
The Supreme Court actually made this clear in their 2014 opinion about Burwell v. Hobby Lobby.
“Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
Truth be told, because of the heat that many big public corporations like Google, Facebook, and others are experiencing, momentum in these areas are actually beginning to change for the better — employees now have more power when it comes to executive discussions and decisions.
In fact, not too long ago, Sen. Elizabeth Warren (D- Massachusetts) introduced a bill entitled the Accountable Capitalism Act, that would require large public corporations (those that possess a billion dollar net-worth) to make decisions not only based on how it would affect shareholders, but also on how it would affect consumers, employees, and the communities they operate in — stakeholders.
This bill would also require big corporations to allow their employees to elect 40 percent of a company’s board of directors.
It’s similar to how church governance works, in the sense that it’s the congregation that votes in its Lead or Senior Pastor.
The idea behind the bill is to make sure that big corporations act/behave and operate as a decent citizen would. It’s actually an interesting flip to how the IRS views individuals.
In other words, the IRS views all individuals as a corporation or entity, and not necessarily as a human being. Sen. Warren, on the other hand, is trying to change that view, and in the process, make big corporations more humane in their business dealings.
The bills is, in essence, inspired by the positive economic improvements that have transpired in Germany as of late — and actually could be one of the driving forces of her 2020 presidential campaign (but that’s a topic for another day).
The idea behind this bill seems to be the same views that are currently motivating Google employees to make more demands from their employer — which happens to be one of the largest and most powerful companies in the world.
Raging Fire Breaks Out on The Roof of Google’s Office in China’s Silicon Valley Tech District
Could Dragonfly Have Been Passed on to China?
Now, circling back to where we started from in this article, in the hearing with Google’s CEO, Sundar Pichai, where he continually stated that Google does not have any plans to “launch” a search engine product in China at this time (and because of the current moral and ethical dilemmas going on within the company here in the States) — could it be that Google, in a political corporate maneuver, found a loophole where they could pass the Dragonfly project over to China so that China could “launch” the product and Google could officially say that “they didn’t launch it, China did”?
It’s no secret that the communist Chinese possess strict laws against technology companies operating in their country. In fact, in order to do business within Chinese markets it’s a requirement for tech firms to hand over the data their systems and technologies collect from their users.
For example, in an article written by Shannon Liao at The Verge, Apple has resorted to outsourcing its Chinese iCloud services to a local Chinese firm. Moreover, an investigation by the Associated Press recently discovered that even shared data collected by cars, such as Teslas, can be collected by the Chinese government.
To that end, it has recently be reported that the newly elected Senate will be investing Google’s financial records in 2019 — which has been causing some discomfort within the walls of Google’s corporate executive offices as of late.
As the old saying goes, “just follow the money, honey.” I guess we will just have to wait and see how things turn out.
William Ballard, MBA is a highly sought after business strategist, marketing consultant, and founder of William Ballard Enterprise. He has been involved in digital marketing since 2009 and business management since 2013. William served a short stint in the military before becoming a serial entrepreneur. Since then, he has written 6 books and e-books and has no plan of slowing down.