Monday, November 06, 2006

Why Privacy Doesn't Matter

Or How I Learned To Quit Worrying and Love Total Information Access

The truth is that privacy does matter, but we don't really understand to what extent. Microsoft doesn't really care what I do online. They don't care what I buy, they don't care about what I listen to or what my favorite porn site is.

What they care about is how much my actions fit into a pattern of behavior. The more information that they gather, the more accurate their pattern matching will be. The reason that I trust Microsoft to gather that data is they can't really do anything with it.

Think about it, who is going to pay money to find out what book I bought at Amazon or who I chat with while I'm supposed to be working on my budget? The answer is no one, even if private enterprise wanted to abuse this information gathering, I'm not sure that it could if it wanted to. We just aren't that interesting, you and I.

That isn't to say that all information gathering is harmless. When the gatherer collects information against our will and can use it to arrest us, prevent us from traveling, steal our money or other such nonsense I am deeply distrustful.

"But I don't want them tracking my internet browsing!" I hear you say. But, since you know that its happening and you choose to buy stuff online anyway that is an implicit agreement to be tracked. Its not perfect, but no one is forcing you to perform business online.

We don't know what that loss of "privacy" really costs us, but I can tell you that it isn't zero. Retailers become more efficient by being able to offer us things that it thinks we want which reduce its total costs. Financial institutions gain a much higher level of confidence in our credit worthiness which allows us to gain instant credit with lower interest rates.

If government steps in and prevents all of this information sharing I can't tell you precisely what the consequences will be, but people will complain about it. Especially the credit. Creditors will be accused of gouging customers. Those libertarians amongst us will proclaim "You ask for it you morons! We told that restricting the exchange of 'private' information will have costs."

"Feh" they will say, "You free-marketers and all of your bizarre notions of incentives and costs. You think that everything resolves around money, can you see that we are talking about something more important than economics!"

Fortunately, I have my explanation detailed well in advance so that I can say "I told you so."

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