Americans' Fickle Stance on Data Mining and Surveillance

Why is it okay that corporations are collecting this much data to begin with?
Lee Celano/Reuters

As the week continues, so does the furor over the government's electronic and big data surveillance. It's largely framed in the terms that President Obama described on June 7th: "You can't have 100 percent security and also then have 100 percent privacy and zero inconvenience." That observation may be true, but we are approaching this issue 100 percent wrong.

We should all "welcome" a healthy debate -- as the president says he does -- on vital questions of freedom versus security, safety versus privacy, and which is our priority. Such debate is a hallmark of a functional democracy. We should not accept, however, that what's at issue here is American freedom versus potential Big Brother government tyranny. That's too narrow a parameter. What's really evident: we're willing to give private corporations data, but we refuse to offer government agencies the same courtesy. That contradiction highlights a muddled, overwrought and inconsistent attitude towards privacy and freedom.

Privacy has rarely existed; it doesn't now, and it didn't way back when. It is more of a Platonic ideal than a lived reality. Most of human history lived in small communities. There was no Internet, no electronic surveillance of communications, no Big Brother fears of an all-seeing digital eye scanning our private lives. But there were still neighbors, who were right there, and family, and shared, cramped living. Not much privacy there or room for behavior that deviated much from whatever the norm was. Remember The Scarlet Letter? The Crucible? Think there was much privacy in Massachusetts Bay in 1650?

Times and mores change. We have come to expect a level of control over the details of our lives, and we are suspicious of attempts to breach the walls of privacy that some of us construct.

Yet for all of the legitimate concerns about government intrusions on personal privacy, Americans today -- along with many people worldwide -- surrender vast amounts of personal information to companies and seem quite prepared to surrender even more if it adds to the enjoyment and reduces the friction of myriad transactions that are part of everyday life.

The most voracious collectors of information are not the U.S. government nor China. They are the companies doing business online. The metadata that the NSA wants is also metadata every marketer at every company wants. That makes the data collected online about each of us by companies every bit as intrusive as what the NSA collected. After all, some of the data the NSA collected came from companies such as Google and Facebook.

Those companies make their own use of the information, and retail companies make even more use of the "cookies" placed passively on our computers that allow for myriad ways to track purchases, which websites we visit and for how long. Many companies then sell that data to marketing firms that then sell their analysis of that data to other companies that want to sell to us. One of those firms, Acxiom, did more than $1 billion in revenue last year . Another company, Palantir, has been a rising star in selling its services to the U.S. government to assist the government in data mining.

Even companies that do not sell their data to third parties, Amazon especially, make intensive use of personal information in order to sell more effectively. Hence Amazon or Netflix and any number of social media sites being able to suggest to us "what we might like" based on their extensive database of what we have already liked and purchased and browsed.

Government's passive use of our data leads to apoplectic warnings of a surveillance state, Big Brother and the death of freedom and privacy. Corporate's active use of our data, however, seems to lead to a collective desire to share even more in order to help companies tailor their products and services evermore to our needs.

What explains this dichotomy? The fact that Amazon can't send SWAT teams to your home, seize your computer and possessions and throw you in jail is one reason. We fear the abuses of government because government has the monopoly on the legitimate use of force, and we are rightly cautious about that being abused.

But the level of corporate online intrusions into our private lives far surpasses anything government is doing in the United States. We allow that to be the case every time we shop online. Yet it is equally true that we "allow" the NSA to access our data because we voted for representatives who then authorized it. The difference is we seem to have buyer's remorse about government, and very little when it comes to companies.

In fact, judging from the behavior of tens of millions of us online, privacy not only has little value, but it is actively rejected, nothwithstanding occasional outcries over Facebook's privacy settings and polices. This is especially true for a younger generation that is growing up with these technologies, using them avidly and valuing privacy far less. For the most part, we want the connection and the ease that sharing our information provides in the commercial sphere, or at least that's what our behavior suggests.

Privacy, therefore, isn't nearly as valuable to us as the current outcry over the NSA would suggest. Until we address our rather schizophrenic attitudes - take my data if you're Facebook; leave it alone if you're the government - we're unlikely to come up with coherent policies that draw those vital lines between security, privacy and freedom that we claim to hold so dear.

Presented by

Zachary Karabell is Head of Global Strategy at Envestnet, a financial services firm, and author of The Leading Indicators: A Short History of the Numbers that Rule Our World. More

At River Twice Research, Karabell analyzes economic and political trends. He is also a senior advisor for Business for Social Responsibility. Previously, he was executive vice president, head of marketing and chief economist at Fred Alger Management, a New York-based investment firm, and president of Fred Alger and Company, as well as portfolio manager of the China-U.S. Growth Fund, which won a five-star designation from Morningstar. He was also executive vice president of Alger's Spectra Funds, which launched the $30 million Spectra Green Fund based on the idea that profit and sustainability are linked. Educated at Columbia, Oxford, and Harvard, where he received his Ph.D., he is the author of several books, including Superfusion: How China and America Became One Economy and Why the World's Prosperity Depends on It (2009), The Last Campaign: How Harry Truman Won the 1948 Election, which won the Chicago Tribune Heartland Award, and Peace Be Upon You: The Story of Muslim, Christian, and Jewish Coexistence (2007), which examined the forgotten legacy of peace among the three faiths. In 2003, the World Economic Forum designated Karabell a "Global Leader for Tomorrow." He sits on the board of the World Policy Institute and the New America Foundation and is a member of the Council on Foreign Relations. He is a regular commentator on national news programs, such as CNBC and CNN, and has written for The Wall Street Journal, Newsweek, Time, The Washington Post, The New Republic, The Los Angeles Times, The New York Times, and Foreign Affairs.

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