Philosophy, legality, and economics of privacy: How privacy spans through most areas of our lives
Have you ever thought deeply about privacy, where it comes from, and its implications? Whether you realize it or not, privacy is involved in almost every aspect of our lives.
Privacy is best conceptualized as the right to control information about yourself, selectively disclosing only what you intend to.
If you think about it, the way our society uses the words “public” and “private” gives up quite a lot of information about our nature. It speaks about how we perceive what we allow (or don’t allow) others to see.
We say of someone that they’re very private if they don’t post a lot about their lives on social media. A public building is a government facility or one the government pays for and maintains. And the private sector is constituted by companies that are overseen by a government but held privately by individuals who can operate as they think is best.
This is just one example of the many ways in which the desire for privacy influences our daily lives. As we’ll elaborate on throughout this article, privacy is more than a social construct — it is a key component of the human experience. We all have thoughts, memories, and aspects of our lives that we choose not to let everyone see.
If you’re reading this, chances are you highly value the human right to privacy. However, you might not have thought deeply about the roots of this belief and why some might oppose it. You may also have never considered that privacy can be seen through the lens of philosophy, ethics, and legality.
Let’s see what happens once we put on these different lenses.
The New Secret: A framework to think about privacy
Panther’s co-Founder Anish Mohammed and philosopher Shaj Mohan deeply explored privacy in their 2011 article The New Secret. In light of the previous year’s WikiLeaks scandals, the authors delved into how secrets are traditionally viewed, kept, and treated.
Privacy could be considered an intrinsic part of human nature and so could the desire to uncover secrets.
The New Secret characterizes a secret as all information that one would like to keep from the knowledge of others, for whatever reason. A secret could range from your true feelings about your spouse’s decoration taste to your credit history. In fact, secrets have a few fascinating properties of their own.
Characteristics and different flavors of secrets
Secrets have different structures and properties that cause quite unique social dynamics around them. These properties are that they have consequence, extractability, are weaponizable and obey hierarchy.
Let’s start with the consequences. A secret’s importance (and therefore the care with which it is kept) is tied to its potential revealing consequences. A secret’s uncovering could result in a national security crisis, as WikiLeaks did for the United States, or in a $1 library fine.
Another, more abstract property of secrets is that they are extractable.
A spy on an enemy state can utilize her position to extract secrets for the benefit of her nation. This shows that secrets’ importance often lies in their ability to be weaponized. Another way to extract secrets is by knowing a specific procedure, as a hacker can utilize his encryption knowledge to decrypt a password.
Secrets are also hierarchical. For example, in a private (again, pun intended) company, a CEO theoretically has the right to request all kinds of information from and of their employees, while this is often not true the other way around. In nation-states, the State sits alone at the top of the hierarchy of secrets.
Secrets in a digital society
In an era of non-stop data exchange, Instagram stories, leaked videos/photos, and a 24/7 need for social media scandals, the properties of secrets remain unchanged. Some would even say that they’re magnified.
Our authors argue that the WikiLeaks case also exemplifies that the more critical a secret is, the greater the credibility of its revealer becomes. That is that, by revealing a secret of a high member of a hierarchy, its revealer gains hierarchical importance as well.
WikiLeaks famously revealed secrets from the United States government, arguably the top member of most global hierarchies. These secrets carried great consequence to the reputation of the State, incentivizing it to prosecute its revealers with all its force. Having obtained secrets by extracting them from within the system (as opposed to the State voluntarily disclosing them), WikiLeaks gained great prominence as a source of truth.
Whereas previously, a secret would have only helped the revealer gain a weapon, nowadays, it also can boost the revealer’s reputation.
Another law that influences secrets is that information obtained by revealing a secret has a higher chance of being true, as demonstrated by video espionage. Leaks such as leaked celebrity videos, secret audio recordings, and photographs covertly taken with a telescopic zoom are perceived as carrying more truth and importance than statements to the press. Information extracted secretly or by force, even in the press, is more likely to be considered true. This makes entertainment portals and magazines that leak or divulge secrets for the first time have a great incentive to do so.
Another example that shows the laws that govern secrets at play is how, in the information age, victims of abuse by powerful people have a higher perceived credibility than ever. Abuse sufferers now have better vehicles to reveal secrets without being censored, and the secrets that they revealed about members of high hierarchy can turn into powerful weapons, especially if presenting information obtained covertly or by force.
A brief history of privacy
Origins of privacy
It could seem backward to look at privacy through history after analyzing its implications and how it unfolds in our world. However, understanding privacy and secrets in a modern context will help you realize that very little has changed over time.
Throughout history, privacy has been proven to be innate to human beings. It is valued universally by all societies in one form or another. The most powerful individuals in all ancient societies had an undisputed right to the secrets of others and the ability to seclude themselves if they chose to.
There are hints that the desire for privacy is intrinsic to biological life. Many animals (including powerful predators such as lions), have been observed to desire it. This hints at a non-socially constructed nature of the yearning for privacy in humans. You can see a brief list of these species and how and when they secure their privacy below:
Privacy in the first modern societies and today
One area in which we can almost universally see the principle of privacy through history is democracy.
It didn’t take long after the advent of democracy for ancient civilizations to figure out that privacy is an unimpeachable aspect of the democratic process. Secret ballot voting ensures a citizen can’t prove (or be proven) to have cast a vote for a particular candidate, thus severely diminishing the efficiency of bribing, threatening, or intimidating voters to win elections.
Although secret voting was partially adopted by the Athenians and fully embraced by the Romans, more than a millennium would elapse until it came back with the French Revolution. And while it took a while to get fully adopted worldwide, democracy is nowadays considered a human right by the United Nations, and is omnipresent in all but the most blatant autocracies.
Other factors such as ancient records of Mesopotamian houses being designed with a heavy focus on privacy, most ancient tribes showcasing a preference for privacy in their sexual lives, and secret confessions being a part of most religions (derived from ancient customs) — showcase that privacy has always been an integral part of the human experience.
Nowadays, the question of whether privacy is a right by its very nature is highly debated by philosophers. Some attribute the right to privacy as an extent of the right to own and control property, or the right to self-protection. Others consider privacy to be an indissoluble part of the right to human dignity. There are still those who deny that privacy is a human right and consider it a contemporary, potentially disposable social value, but they’re hardly the majority.
Privacy in our times is a requirement for exercising one’s individuality. Having your personal space and belongings and being able to control them as you see fit is crucial for the idea of being distinct from others. What a person chooses to do in their personal space or belongings is subject to their terms. Thus even in interacting with the outside world, explicit or implicit conditions preserve privacy to an extent. There’s even a comparative punishment in restricting someone’s privacy and freedom when putting them in prison.
Is the law friendly towards privacy?
The law has always played an interesting role in the relationship we have with our own privacy. Nowadays, the State attempts to do a balancing act between two major concerns: Individuals’ desire for privacy and nations’ interest in policing their populations. From some perspectives, privacy is more of an obstacle than an aid to this mission.
Interestingly, we can see that this has been the case for most of history.
In the English-speaking world, privacy rights slowly developed as an extension of the castle doctrine (for which registries go as far back as Ancient Rome). According to it, individuals “have the right to use reasonable force, including deadly force, to protect themselves against an intruder in their home.” Famously cemented into English common law by a court case in 1604 reported by Sir Edward Coke, the castle doctrine has always retained certain exceptions within which public officials may enter uninvited. These exceptions, you could argue, have helped its replication in most Western nations.
Privacy and law in the digital age
We have extensively covered he importance of digital privacy, why it’s necessary, and the kind of privacy solutions we’ll need as we move into Web3. Because of this, as opposed to covering the cypherpunk fight and the developments in encryption and zero-knowledge technology, we’ll only briefly focus on the government-initiated Crypto Wars.
It’s no secret that governments are typically high spenders on and hardcore users of cryptography.
What you might not know is that for most of modern digital history, several governments (the US’ first and foremost) have pushed back against encryption-related exports and public products, arguing that they would enable a variety of crimes. Had these restrictions stayed in place, becoming as strict as intended, today, we would live in a very different world. Backdoored software, unencrypted or only slightly encrypted Internet data (which would, paradoxically, enable several other crimes), and perpetual cellular surveillance would be an everyday matter.
This period of retaliation is now known as the Crypto Wars, and some consider it ongoing. Fortunately, largely thanks to the efforts put in place by intellectuals, civil rights and privacy advocates, and private sector pressure, the distribution and export of software related to encryption now enjoy a more solid, permissive legal stance.
Is our privacy getting better or worse?
We are also now seeing the first laws trying to empower users’ digital privacy, as we let devices that can record our every activity into our homes, transact online, and unintentionally create deep digital footprints. In fact, this is only possible thanks to technologies our governments previously worked against.
Nowadays, there are regulations around customer data of many kinds. The European GDPR is considered by many the most comprehensible legal framework around data privacy. At the same time, in the United States, a handful of domain-specific federal laws such as HIPAA, COPPA, and the Fair Credit and Reporting Act, dictate how businesses may handle customer data. However, a similar level of investment and policymaking goes towards surveillance and control of digital activity, leading to a “privacy vs security” discussion, although some may argue this is a false dichotomy.
Economics of privacy
There is undoubtedly a financial aspect to privacy.
Most of our private activities leave financial traces that may reveal sensitive information or point those interested in violating our privacy closer towards it. Campaign donations show where you lean politically, medical expenditures may expose illnesses or concerns of a patient, and a credit card charge from a local business testifies that you have been there and consumed their goods or services.
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Breaches of financial information can have significant negative consequences, not only of the monetary kind. These consequences include, but aren’t limited to:
- Harassment by salespeople.
- Political, ethnical, identitarian, or religious persecution.
- Increased exposure to cyber-attacks and fraud attempts.
- Hyper-specialized targeting.
- Digital price gouging, a very present, current issue.
All of the above can vary in gravity based on a number of factors, but the last one showcases one of the main issues with lack of financial privacy: the (sometimes hidden) exposure of an individual to being manipulated using their data.
For example, due to non-private financial data, a person that an algorithm detects has a family member with an illness could see an increase in price for medicine purchases. This can happen automatically through algorithms. However, it’s perhaps more preoccupying that a lot of our data may have been already irretrievably leaked.
Unfortunately, if we can’t transact through means that are inherently private, our data won’t be so. It also sheds light on a major issue with traditional and on-chain payments, as they tend to carry with them a significant amount of data.
In the case of on-chain transactions, it’s also important to note that an additional danger associated with them is the transparency of public ledgers (of which we’ve also spoken at length). This can lead to users being front-runned, arbitraged, having their value extracted, and similar problems.
Data leaks and consumer privacy
In today’s internet, the capability of service providers to collect and store data grows faster than their ability to secure it. For that reason, customer data leaks have unfortunately become commonplace. Billions of database entries with personally identifiable information, credit card numbers, billing addresses, phone numbers, email addresses, and passwords are available all over the internet. Every new leak potentially worsens those that came before it, as data on an individual can be complemented and updated. With enough information at hand, identity theft becomes a trivial endeavor, and real-world consequences are disastrous.
Government data leaks are also a predominant issue. The State’s power makes data breaches from government databases particularly severe. In the financial realm, the very existence of such a centralized database presents the risk of its citizens being compromised by hackers. This is why some, including Panther, might point out that in a digital era, we should start heading in a direction of more, not less, financial privacy when it comes to disclosing information.
Is it possible to put a price on privacy?
Through this registry, economists have tried to put a price on privacy by contrasting the potential savings of users outside the registry vs. users that do not access the benefits offered by telemarketers. Different studies place privacy’s “price” between $0.50 and $98 a year using this technique in the United States.
However flawed studies like the one mentioned above be, there is an indication that privacy could have an economic value. The transition to an on-chain economy might allow us to see this more clearly, as the adoption of tools for users to transact privately may showcase how much users are willing to pay to add privacy to their transactions, and at what point this barrier becomes too high.
Although the debate on whether privacy is a human right or a disposable aspect of our lives will likely continue through the ages, it’s more than clear that it is an all-encompassing matter in modern society.
There are still many debates to be had over privacy from many different possible angles. Some may even argue that definitions upon financial and data privacy will determine whether we continue to evolve to a more egalitarian society as a whole. Through action, regulations, and surveillance, we will collectively decide whether privacy becomes a default (and in what areas), our nations have complete control of all our information and what to do with it, or privacy is left to people’s own devices.
Whichever side you stand on, what’s important is that you’re aware of the importance of privacy. As an issue that impacts everyone, it must be at the center of our political, ethical, and philosophical discussions before it is too late. The matter of privacy is indeed too important to leave in the hands of the few.
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