Privacy in a Free Country: In Search of Reasonable Principles

Policy Reports | Privacy

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


Cultural, legal and technological changes have created the perception of a privacy crisis. This is because people are sometimes puzzled about how the old rule favoring the free flow of information in the private sector (with privacy being the exception) will apply to new cases. It does not follow, however, that a real and dangerous privacy crisis exists. Most alleged harms are either speculative or vague. As a general rule, there is not, and never has been, any real problem with continuing to embrace people's ability to learn about other people.

"It is too easy for government to exempt itself from restrictions on its information gathering."

When it comes to privacy from government intrusion, new legal rules - unless adopted at the constitutional level - are in effect Band-Aids on a bleeding wound. It is simply too easy for government to exempt itself from restrictions on its information-gathering powers whenever those restrictions become inconvenient. Still, government is the one entity that wields enough unchecked power for us to be concerned about its access to information. And such concern is consistent with the U.S. Constitution's tradition of limited government.

In the area of privacy and consumer protection, the biggest challenge is to sort out technophobia from real harms like identity theft. Consumers do not need to be protected from coupons. They do need enforcement institutions that will recognize the harm of identity theft and facilitate real solutions for victims of fraud.

In the area of employment privacy, common sense should stem the tide to shut employers off from information they need to control costs and employee behavior. Wise employers will generally inform their employees about monitoring practices. But sometimes a secret monitoring system will be necessary so that employees bent on misconduct will not set out to deliberately defeat it. Too many restrictions on employers' access to information, and we'll be back in the era of the Good Ol' Boys.

Medical privacy is perhaps the most complicated area. Medicine is no longer a purely private-sector activity. Sometimes, familiar constitutional principles are relevant to analyzing medical privacy problems such as police access to medical records. For practices like marketing, it may be necessary for companies to take special measures to reassure the public that these uses will not harm them. But private-sector uses of data in medicine have potential public benefits, and medicine should not be constrained by a rigid model of privacy.

"Despite the perception of a privacy crisis, there is excitement in the air about the potential for enormous gains from new uses of information."

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. The changes wrought by information access and electronic databases are just beginning. After all, every single human action - the decisions to buy or not to buy, whose Web sites we visit, how much we spend, at what time of day - is something someone somewhere might learn something from. If more information on human behavior could be saved, business could grow faster; consumers could enjoy cheaper goods and services with less hassle; wrongdoers could be captured more quickly; and the vast economic losses that result from fraud, misunderstanding, confusion and poor planning could be slashed.

The good news about new information technology is that it is not the boogeyman. 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 it was formerly.

NOTE: Nothing written here should be construed as necessarily reflecting the views of the National Center for Policy Analysis or as an attempt to aid or hinder the passage of any bill before Congress.

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