Privacy in a Free Country: In Search of Reasonable Principles

Policy Reports | Privacy

No. 243
Monday, April 30, 2001
by Solveig Singleton

Executive Summary

"Privacy" has often been thought of as a traditional American value, but the concept has always been difficult to define precisely. With the passage of time and the development of technology, particularly the ability to share information quickly and inexpensively, the issues involved have become increasingly complex.

For example, the use of new electronic surveillance technology by law enforcement officers is raising new questions about the limits of privacy and the reach of the Constitution's protections against search and seizure. Without ever stepping on your property, government agents can:

  • Detect heat from a possible marijuana crop in your basement or detect activity in your bedroom, using thermal emissions equipment.
  • Use electronic emissions readers to "read" a computer screen in your home.
  • Use laser beams trained on a windowpane to "listen" to a conversation inside your home.

The determination by courts that business records, unlike personal records kept in your home, are not protected by the Fourth Amendment has allowed government fishing expeditions for illegal activity. For example, under a "know your customer" program, banks monitor customers' accounts for "suspicious activities" and "voluntarily" report them to regulators:

  • The government collected 62 tons of paper covering 77 million currency transactions between 1987 and 1995 in an effort to catch money launderers.
  • Yet since only 580 money launderers (most of them "small fry") were caught, the government collected more than 100,000 reports on innocent citizens for every criminal convicted.

In addition to banking, the federal government alone has hundreds of databases, some of which have been criticized for inadequate security, containing information about private citizens, and new government rules will create a centralized health information network and assign unique identifiers -- national IDs -- to all patients.

Moreover, even if strict rules are applied to government privacy, rogue employees can abuse those rules:

  • When more than 500 Internal Revenue Service agents were caught illegally snooping through tax records of thousands of Americans in 1995, only five were fired.
  • After the IRS developed new privacy protection measures, hundreds more agents were caught doing the same thing again in 1997.

In two other areas of privacy -- consumer protection and employer/employee privacy -- technology and innovations over the past few decades have also given rise to uneasiness as information is used in new ways.

Some people see the development of targeted marketing by businesses and the ability to track a customer's activities on a Web site as a threat to consumer privacy.

  • One survey found that 86 percent thought Internet companies should ask permission before sharing personal information with third parties.
  • Even so, 55 percent of Americans bought something online during the holiday season -- and 86 percent reported they tried to buy, although technical problems prevented many from completing their transactions.

Many employers monitor employees' activities electronically or with video cameras, and some use medical or credit information in making hiring and promotion decisions.

  • A survey in early 2001 reported that 61 percent of large businesses were monitoring workers' use of the Internet.
  • Another survey concluded that 35 percent of Fortune 500 companies use medical information in hiring or promotions.

Despite the perception of a privacy crisis, there is excitement in the air about the potential for enormous gains in business and government administration and in consumer welfare and service from new uses of information. It would be wrong to shape public policy or pass laws based on the perception of a crisis or on the fears by some of technology and innovation.

Human beings rarely make better decisions by having less information about themselves and their fellow human beings. The principle that freedom of information should only rarely give way to privacy concerns is as reliable today as ever.

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