Big Brother Is Watching

Tuesday, October 30, 2001
Illustration by Taylor Jones for the Hoover Digest.

In mid-April, President George W. Bush surprised the pundits—and much of the medical community—when he approved new rules to protect the privacy of patient medical records. The Wall Street Journal reported, "President Bush’s decision to implement new medical-privacy protections, while shocking health care industry officials, is part of a much broader presidential impulse. He intends to back a wide range of privacy protections for U.S. consumers, even though his business allies sometimes will object."

Bush’s decision to embrace privacy is both good politics and good policy because "privacy" is an issue that conservatives ought not to cede to liberals. This one is ours.

Privacy: Our Most Valued—if Not Most Cherished—Right

In recent years, the left has succeeded too often in sowing distrust of the "private" as opposed to "public"—private often a code word for narrow, selfish interests, public for a more compassionate and inclusive viewpoint. For much of the left privatization has become a dirty word. Conservatives need to take back the language.

Privacy can help us do that, because a society that takes privacy seriously will also take freedom seriously. A keen sense of jealousy for personal privacy helps restore the sense of personal freedom because it highlights the limit of the powers of government and other elites to intrude on those aspects of our lives that are no one else’s business, where we can close our doors and windows and live out life on our own terms.

In the brave new world of high-tech marketing, you will only need to dial the phone to expose yourself. Marketers hope soon to be able to use your caller ID to identify your income, buying habits, credit history, and other details of your personal life.

It has become almost a cliché that privacy is the defining issue of the information age, the first great battlefield for e-commerce and the digital economy. But this may understate its importance.

The enduring legacies of the twentieth century are the advance of human freedom and the technological revolution that has both accompanied it and given it impetus. Privacy is the intersection of those legacies because it will determine whether technology will enhance our freedom or help extinguish it.

It is also a populist issue because freedom and individualism are populist issues.

This is because our zone of privacy—that part of our life which is no one else’s business—is where questions of personal freedom touch individuals. As Louis Brandeis suggested more than a century ago, the right to be left alone is the most valued, if not the most celebrated, right enjoyed by Americans. Bush seems to have recognized this, even if some conservatives and their business allies remain skeptical.

One way for conservatives to approach the issue is to recognize the relationship of privacy and private property. Historically, our understanding of privacy has been tied to our appreciation of private property because the one guaranteed the other. Hannah Arendt once noted that, until recently, all societies were built upon the sacredness of private property because the walls of such property protect the intimacies of life. Those walls, unfortunately, are no longer sufficient.

Privacy does not appear anywhere explicitly in the Constitution. But there seems little doubt that the Founders had a keen sense of the sacredness of private life. The use by the British of the so-called general warrant led directly to the Fourth Amendment, with its prohibition of illegal searches and seizures. The Founders recognized a powerful connection between private property and political freedom and were animated by the conviction that the reach of the government should be sharply constrained. James Otis, arguing against the extension of King George’s writs of assistance, declared, "Now, one of the most essential branches of English liberty is the freedom of one’s house. A man’s house is his castle, and whilst he is quiet, he is as well guarded as a prince in his castle."

The Assault on Privacy

But what once took place in the privacy of that home, face-to-face behind closed doors in bedrooms and living rooms, far from prying eyes, now occurs electronically. This ability to communicate privately has been considered a basic freedom—men and women could engage in discussions about politics, finance, or their personal lives, free of surveillance or censorship by others.

The federal government no longer needs armies of its own sleuths to maintain surveillance on its citizens. It can simply buy the data on the open market.

But today such private communications face new and unprecedented challenges.

Modern technology has made it possible to create vast new dossiers of extraordinary detail and specificity about our tastes, habits, and lives. Every time you apply for a job, visit a doctor, subscribe to a magazine, fill a prescription, visit a web site, use a credit card, dial a phone, seek credit, fly on an airplane, buy insurance, rent an apartment, drive a car, pay taxes, get married or divorced, sue someone, use a smart-card, or apply for government licenses or benefits, you become part of a vast data web. Records that were once obscure and not easily accessed can now be instantaneously blended with data about your shopping habits and tastes, as well as what you read and watch.

Most of us are just one lawsuit, one disgruntled ex-employee, one angry ex-spouse, one political controversy, or one hostile news reporter away from finding out just how vulnerable we are to the misuse of such data.

Private property rights are essential elements of a free market. Why not treat personal information as private property?

Private companies like Acxiom in Arkansas have spent 30 years compiling monster databases on 160 million Americans, representing 90 percent of American households. The company sells 20 million unlisted phone numbers to law enforcement, lawyers, private investigators, debt collectors, and anybody who wants them. The firm has created a treasure trove of personal information by pooling the most extensive collection of public databases ever gathered with volumes of consumer information. In the brave new world of high-tech marketing, you will only need to dial the phone to expose yourself. Marketers hope soon to be able to use caller ID to tell whomever you call your income, buying habits, credit history, and other details even before they answer your call.

As if all of this were not troubling enough, Congress last year approved legislation allowing the sharing of information between banks, brokerages, and insurance companies that acquire one another. (The law permits consumers to opt out of the sale of personal information to third parties, but there are no such restrictions for affiliated companies.)

New technologies continually push the boundaries of the possible. New surveillance technology, most famously used at this year’s Super Bowl, matched pictures of attendees against computerized police lineups—a taste of the next generation of surveillance cameras.

Meanwhile, government continues to have an insatiable appetite for personal information, creating databases for everything from new employees to who travels on an airline. Law enforcement has deployed its own snooping devices, ranging from infrared sensors that can effectively look through walls to the FBI’s Carnivore, which is an elaborate system for intercepting e-mails and other private communications.

Even as the reach and intrusiveness of privacy-invading technologies increase, much of our personal information has become increasingly sensitive, especially in the area of medical records. Advances in decoding the human genome, for instance, open the door to much more elaborate genetic testing and diagnoses. Medical data that include such genetic profiles or predictors invade the privacy of entire families, not simply individual patients.

Some libertarian critics have suggested that legislative privacy protections should focus exclusively on abuses by government and leave the private sector alone. Unfortunately, this fails to account for the aggressive commingling of public and private information.

The same day the Wall Street Journal described President Bush’s decision to implement medical privacy rules, the paper carried an article headlined "Big Brother Isn’t Gone. He’s Just Been Outsourced." Noting that the FBI and other law enforcement agencies had scaled back their file-keeping on citizens after scandals of the 1960s and 1970s, the paper noted that in the last few years the feds have found a way around such restrictions:

[T]he FBI, the Internal Revenue Service and other agencies have started buying troves of personal data from the private sector. From their desktop computers, 20,000 agents at the IRS have access to outside data on taxpayers’ assets, driving histories, phone numbers and other personal statistics. Using a password, FBI agents can log on to a custom Web page that links them with privately owned files on tens of millions of Americans. And with just a few keystrokes, the U.S. Marshals Service can find out if a fugitive has recently rented a mailbox or acquired a new phone line.

The firm used by the government, ChoicePoint, is just one of many high-tech surveillance companies. Like other private sector data collectors, it purchases much of its information from credit unions, which maintain histories on the spending habits of 180 million Americans. ChoicePoint then indexes the data under an individual’s Social Security number and stirs in more information it gleans from local, state, and federal governmental agencies, including motor vehicle, driver, and boat registrations; liens and deed transfers; phone listings; military personnel records; and voter rolls. "By mixing and matching its databases, ChoicePoint can accumulate all kinds of information—a speeding fine, a bankruptcy filing, a spouse’s name—under a single Social Security number, tailoring the data and related software to a particular client," reported the Journal.

In other words, the federal government no longer needs armies of sleuths to maintain surveillance on its citizens. It can simply buy the data on the open market.

Evidence suggests that the public is growing increasingly uneasy with such trends. In 1999, the Wall Street Journal’s premillennium poll found that the issue most concerning the public was privacy—outranking terrorism, education, taxes, and campaign finance reform. The result was consistent with a 1998 Louis Harris poll, which found that 88 percent of Americans said they were concerned about their privacy and 55 percent said they were "very concerned."

Some of that anxiety was reflected in public uproar over intrusive questions by the Census Bureau, controversies over plans by DoubleClick to merge Internet data with other marketing-generated personal information, and reports that government agencies were tracking visitors to their web sites.

The Clinton Record: Privacy under Attack

Unfortunately, as concern has risen over privacy, liberal advocacy groups have tended to dominate the debate. There were indications late in the Clinton presidency that he recognized the potential political potency of privacy, but ultimately it was a lost opportunity for the Democrats.

Part of it was Bill Clinton. Part was ideological.

The president and Congress should place sharp limits on the government’s own gathering and sharing of personal information. Limiting the uses of the Social Security number would be a good place to start.

Clinton raised the profile of privacy but hardly in a way to strengthen support. Although Clinton invoked the right of privacy when it suited him, his administration’s record on the whole was awful. The Clinton administration either instituted or oversaw the creation of massive new tracking databases for new workers and for air travelers as well as an attempt to take over the health care system that would have necessitated a nationwide medical database and a new universal medical identification number to track every patient from cradle to grave.

As a privacy advocate, Clinton had two major problems. First, the nanny state has an insatiable appetite for information with which to monitor individuals. Politicians who think that it takes a village to raise a child aren’t likely to be too squeamish about lesser violations of privacy. One of Hillary Rodham Clinton’s gurus, Amitai Etzioni, has written a book arguing that we all have too much privacy. Specifically, he thinks the government doesn’t have enough data about us. For Etzioni, the real question in the privacy debate is whether the capacity to invade our privacy and track our behavior would be available only to private business "or also for public protection and other social purposes." We can just imagine.

Clinton’s second problem was that he was worried about appearing sufficiently tough on crime. So he gave approval to a series of surveillance measures pushed by federal agencies, including proposals to plant Clipper chips in phones and computers; easy-to-tap trapdoors in cyberspace; and Carnivore, which devours your e-mail transmissions.

Clinton’s failure on privacy creates a moment of genuine opportunity for President Bush.

"He said he’s a privacy kind of guy," one official, who was present when Mr. Bush made his decision to approve the medical privacy rules, told the Wall Street Journal. White House press secretary Ari Fleischer reiterated the point, saying that Bush will "tend to side with the privacy point of view. It’s good for business to honor people’s privacy."

The decision surprised many Washington watchers, who had expected the president to side with business interests who opposed the rules. Noting that Bush "has come under heavy fire from environmentalists, labor unions and consumer activists," the Wall Street Journal noted that some of his aides "believe privacy issues could provide him some much-needed political cover, and private GOP polls confirm the popularity of this position."

But there are indications that Bush’s commitment to privacy may run deeper. In an interview with ZDNet, an Internet news service, shortly after becoming president Bush laid out a remarkably aggressive agenda: "As president, I will prohibit genetic discrimination, criminalize identity theft, and guarantee the privacy of medical and sensitive financial records. In addition, I will make it a criminal offense to sell a person’s Social Security number without his or her express consent."

Bush’s decision on medical privacy could well be simply the first step toward taking back the issue of personal privacy from the left.

How We Can Regain Our Privacy

Can Bush reclaim the privacy issue, however, without creating new layers of regulation and bureaucracy? How can he navigate the shoals of regulation versus self-regulation? Is there a solution that is both effective and consistent with free-market principles?

I believe there is, if we return to first principles: privacy cannot be separated from private property. Private property rights are essential elements of a free market. Why not then treat our personal information as private property? Why not create a free market in privacy?

Admittedly, this is a radical proposal. But it rests on the principle that each of us owns our identity. No one has the right to sell or transfer my private information to anyone without my express permission. This permission can be granted, but it may carry a price and contractual limitations—to which I must agree in advance. In other words, if marketers wish to sell my identity, they must first get my permission or buy it from me. Privacy thus becomes the default setting of the information age.

Treating our personal data as property avoids the worst abuses of bureaucratic regulations and leaves consumers with both flexibility and choice. But it also restores control to the individual. This no more hampers the free market in information than the recognition of intellectual property rights unduly limits the market in art or science.

Beyond extending property rights to private information, the president and Congress could also move to place sharp limits on the government’s own gathering and sharing of personal information. Limiting the uses of the Social Security number would be a good place to start.


Ultimately, though, political action cannot restore our culture’s respect for reticence and privacy. After all, we live in a therapeutic, tell-all culture, where we are all encouraged, even nagged, to reveal our most intimate secrets to as large an audience as possible—all in the name of health and openness. Media standards continue to erode as the line between what was once tabloid journalism and the mainstream media becomes increasingly porous.

What we need is the willingness to say—to the government, marketers, the media, and various therapeutic elites alike—it’s none of your business. We’ll feel better. And be better off.