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August 31, 2010 - 12:31pm

Remember Abbie Hoffman’s “Steal This Book!”? Transformed, “Watch This Video!":

Bruce Schneier needs no introduction but he deserves, once again, an award for impassioned and succinct articulation of the market, social norms, law and technology conundrums, this time not about technical security, which is the topic that propelled him to fame, but the opposite side of that coin, privacy.

Another phrase association: Remember President Eisenhower’s “military-industrial complex” describing the defining characteristics of post World War II American society? Transformed, “Complex Socio-Technological Systems.” Schneier may or may not have come up with the term, but he uses it effectively to describe the defining characteristics of our contemporary, developed world today.

Privacy is about individual’s ability to control information about him or herself.

This concept is well worn among privacy specialists for good reason. First, if the idea of the individual having relevant political meaning is foreign to you, reader, run, don’t walk, to any sound history course in modern Western society. Second, information, well, that is the name of the game in a global information political culture, and one of the points that Schneier stresses. Virtually everything we do now is tracked electronically; we don’t have privacy by obscurity (to play verbally with an old saw in the security environment) because in an information society the range of obscurity narrows to insignificant degrees. What we do about this problem, he warns, is “what [this generation] will be judged on” in the future. Third, privacy is a historicized social expectation. Although he does not dwell on this perspective, implicit in it is an observation that I, too, have made: social and legal concepts of privacy emerged in the twentieth century precisely because that which used to be assumed could no longer afford to be ignored given urbanization, industrialization and immigration abetted by technology. (I explored these issues in a paper on privacy and individual rights given at Harvard University in 2008.)

Finally, control speaks for itself: it is the underlying dynamic of a notion of political “rights.” Control is also, not coincidentally, the foundation of personal autonomy. Ask any slave, or child or union representative. The ability to control one’s thoughts, body, time, personal preferences, destiny, comings and goings is what all the fighting is about whether it be about governance or toilet training. No matter how much a society such as ours may tout personal freedom, socialization inevitably interferes with it. (See Freud, Civilization and Its Discontents.) Cross-culturally and trans-historically politics is all about details of the balance that any given social structure sets. If I understand Schneier correctly, he shouts out the recognition that technology and the market are shifting this balance in important and significant ways in our democratic societies. We would do well to take the measure of those changes and adjust the power balance.

Schneier said it better: “Government and business are changing social norms.” And the key point here is: “Who gets to make the rules.” Alas, the plot thickens, because according to Schneier, an imbalance between “government [or law]” and “business” exists. “Markets will make the most of what these laws allow.” Okay, here comes a stinger in consumer politics, and Schneier uses Google as the model: “We are not the customer. We are the product that they sell to their customer.” Wow! The clincher? Market failures arise as a result.

What is a market failure? A market failure is a concept born out of the notion of free, or “laissez-faire,” economics that suggests free markets are not perfect. Why they are not perfect is a matter of economic debate, but take it from a historian that the essential answer is that people make markets (not “invisible hands of god”) and, now don’t be surprised, people are not perfect! Unrestricted by the laws of nature, operational technological policies, ethics, rules or brute force, people will, on average, act in their own self-interest (I urged you not to be surprised :-).

Unrestrained markets, therefore, will “fail” to create perfect outcomes for the society as a whole. From a historical perspective, think here of “robber barons,” child labor laws and the New Deal of the last century. “Welfare capitalism” or, in a word, “regulation” was the result. Hence other forces, such as the law, are required to adjust the balance of market failures.

“In this [complex socio-technological system] people have very little control …” notes Schneier. Furthermore, the market takes advantage of this lack of control. “There is very deliberate psychological manipulation,” he opines, and uses privacy settings as an example. “They are designed to make you do a bad job because that satisfies the business’s customers.” Need anyone mention Facebook in this context? “The thing missing in this hierarchy largely is law. Law has traditionally stepped back and let the market solve these problems. But I submit that we are seeing, looking at the individual, significant market failures. And we will continue to see them so long as this way of doing things continues.”

Why go into detail about these issues? Because they form the basis of thoughts regarding the Google, Verizon issue that has emerged in the net neutrality discussions on-going in and outside of the Federal Communications Commission of late. Although ostensibly about price setting for broad-band “customers,” these discussions have a direct connection to Schneier's concerns. More about that connection in the next post!



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