Previous Politech message: "No broad U.S. privacy laws costs 'tens of billions,' study says" http://www.politechbot.com/p-03307.html
Robert said he's declined to debate because an email debate on this broad subject will miss the essentials and will not be enlightening. -Declan --- From: [EMAIL PROTECTED] Date: Wed, 27 Mar 2002 21:54:40 -0500 (EST) To: Declan McCullagh <[EMAIL PROTECTED]> Subject: FC: No broad U.S. privacy laws costs "tens of billions," study says >Do any of the authors of the "business privacy papers" >(probably better characterized as free-market privacy >papers) want to reply? I am not an author of one of the business privacy papers, but I am a free-market economist and entrepreneur. I would like to reply. The paper describes privacy as an "elusive, value-laden concept". Robert Gellman is wrong: privacy is a straightforward concept, but people like Gellman refuse to discuss the situation in anything other than elusive, value-laden terminology. Take the following paragraph as an example: >Supermarket frequent shopper cards and other registration >and monitoring programs coerce consumers to sell their >personal information for lower prices at the cash register. >Customers unaware of or unwilling to sign up for these >programs often pay more. "Coercion" is a strong, value-laden word. Frequent shopper cards are a straightforward business proposition. Due to advanced technology, it costs less to service customers that reveal private information, cost savings that can be passed along to consumers. Gellman asserts, with no proof, that if frequent shopper cards were outlawed, then all customers would get the same low prices. Free-market economists assert the opposite, that all customers would get the same high prices. Gellman concludes: "The higher prices paid by those who reject frequent shopper cards represent a direct financial sacrifice for privacy." A free-market economist might conclude: "The lower prices paid by those who use frequent shopper cards represent a direct financial benefit for disclosing private information." Notice the circular nature of the arguments. Gellman's premise is that it costs money to protect privacy, and he uses that to show that protecting privacy costs money. His entire paper is the same circular logic. There is a much more basic disagreement here: "authoritarianism" vs. "libertarianism". The authoritarian believes that if everyone were presented with the same information, they would make the same choice. In Gellman's case, he believes that all people value their privacy the same. Libertarians hold the opposite view, in this case, that nobody values privacy the same amount: some don't care, but some are privacy paranoids. This is the circular argument going on Gellman's mind. He thinks that everyone values privacy as much as he does. He can't conceive of the idea that some people value it less. The obvious conclusion is that if people use frequent shopper cards, then it must be because they are being coerced against their will. Governments have guns, businesses don't. However, Gellman believes that businesses have voodoo powers to coerce the population that are just as powerful as guns. This is obvious to him, because consumers are clearly making the "wrong" choice when they sign up for frequent shopper cards; consumers are clearly being coerced. The following quote from Gellman is interesting: >Some narrow-minded economists focus only on the goal >of lowering business costs of customer surveillance. >These economists pay no regard to the social consequences. >The expansion of personal information trafficking >possible with new technology could lead to a future that >will make George Orwell seem like an optimist. The way that "narrow-minded" free-market economists measure "social consequences" is to put a dollar value on them. The reason is that every consumer values such consequences differently; you can't apply a single value for everyone. The way to measure the social consequences is not to assume the values you want, but to use the dollar value consumers are putting on them. In other words, the economist might note that the consumer can save $1.50 with a grocery purchase. Therefore, consumers with frequent customers cards value their privacy at less than $1.50, and consumers without cards value their privacy at more than $1.50. Gellman doesn't believe this amount, and thinks card-carrying consumers value their privacy at a much greater amount, but that somehow the business is coercing them. QED: the free-market economist must be wrong, there must be some social consequence to this transaction that is not being measured by that $1.50. If Gellman gets his way, he passes laws to adjust for the imbalance. If Gellman is right, then this isn't bad, but if the free-market economist was right and if the privacy was really worth only $1.50, then we have an Orwellian society where guns coerce people. By the way, we still haven't left the realm of circular logic. Gellman is afraid of me because he thinks my policies will lead to an Orwellian society led by business. I fear Gellman because I think his policies will lead to an Orwellian society led by government. I'm not so much trying to refute Gellman directly so much as point out that there is nothing to refute. His conclusions are drawn from his premises; but since he draws his premises from his conclusions, he has a circular argument. There is no way to evaluate his claims without stepping outside that circle. On the other hand, free-market economics is likewise circular. To step outside of Gellman's circle, you would have to spend a considerable time understanding an entire new perspective on life, a new set of values. You can pick any arbitrary paragraph from his document, and I can "refute" it not by challenging his logic, but proposing a new set of premises, premises made by free-market economists. For example, consider the following statement (I picked this one at random): >It is impossible to say how the Internet might have >developed if it were imbued with strong privacy protections >from the start. What he is trying to say is that maybe there wouldn't have been so many dot-com failures if consumers trusted businesses not to abuse their private information. He has statistics throughout his document to support the argument. On the other hand, the basic assumption of free-market economics is that government regulations have unintended consequences that hinder business development. They believe that the Internet was such an incredible phenomenon precisely because it was unregulated. This puts us right back to circular arguments. Authoritarians claim that the Internet wouldn't have any of its problems if only it were better regulated. Libertarians claim the Internet wouldn't have any of its benefits if it were regulated more. Gellman has a list of things and their cost breakdowns in order to show how much pro-privacy people have to pay in order to protect their privacy. However, I am more pro-privacy than anybody I know but I don't do any of those things. This is because I try to protect my anonymity rather than protect my privacy. Anonymity on the Internet is really easy. First step is to get an "anonymous" credit card. The easiest way to do this is create a sole-proprietorship LLC. This is company that is essentially you; instead of filing a company tax return, you file its information along with your normal tax return. The advantage is that it gives you a separate tax ID number that you can use for credit card applications. You can likewise get a bank account under the company's name. There are many postal companies (e.g. "Mailboxes Etc.") that will give you a valid looking mailing address that is the same as a post office box. They will even forward the mail to you (for a fee, though it isn't much). You can also get anonymous e-mail accounts. The upshot is that you can order books from Amazon.com, make purchases on eBay, or interact with normal businesses in normal ways. All these things are tied to the corporate entity, not you personally. When you get tired of the junkmail and spam, just change your addresses or reconstitute the company. The only downside is that you won't be building up credit since the credit bureaus cannot track you (you'll have to have one normal credit card that you use occasionally). Back to circular logic: Gellman's premise is that all people will protect privacy the same way. My premise is that everybody wants different ways of protecting their privacy. I fear whatever laws Gellman proposes because he will force his vision of privacy on my life. For example, my kind of anonymity is either outlawed or prohibitive in Europe (e.g. France outlaws anonymity, most countries charge thousands of dollars to start a business rather than the $15 that I'm charged). Robert Graham PS: You can send comments to: [EMAIL PROTECTED] ------------------------------------------------------------------------- POLITECH -- Declan McCullagh's politics and technology mailing list You may redistribute this message freely if you include this notice. Declan McCullagh's photographs are at http://www.mccullagh.org/ To subscribe to Politech: http://www.politechbot.com/info/subscribe.html This message is archived at http://www.politechbot.com/ ------------------------------------------------------------------------- Politech dinner in SF on 4/16: http://www.politechbot.com/events/cfp2002/ -------------------------------------------------------------------------
