Privacy is like money

The Vendor Relationship Management list, run by Doc Searls at Harvard, continues to produce fascinating discussions. Here’s something I wanted to put on the blog after sending it to the list:

The notion of privacy is as lively and relevant as ever.

The idea that privacy is dead is irrelevant, along with the argument about how privacy operates in interpersonal and social contexts, which is misguided and ultimately aligns the list for or against people. It is not necessary to condemn privacy, because it sets up thousands of debates over what people have lost rather than what they have gained from the advance of transactional and publishing tools. In this context, marketing is only a business function that composes content and transactional opportunities, though others who look higher in the stack than I may disagree.

What has changed is not the definition or reality of “privacy,” a concept that denotes the individual’s subjective sense of ownership of their body, their property, space and time. The difference is that a wide range of transactional opportunities have come into play, which were unavailable in the past because products and services could not be personalized efficiently. We’ve created a good, personal information, which was previously inseparable from other goods in the market. Now we need to bank that asset on behalf of its owners, individuals with their own definitions of the fair value of their personal data that we cannot control or define for them. We can help them understand the value and how to leverage it.

We can tell people they have an asset, but we cannot tell them how to use it. Just like money.

The concern then, from our customers’ standpoint (also the perspective of the “reasonable person”), is whether we say those goods should be marshalled to benefit them or someone else. Traditionally, we’ve ignored the personal cost of accommodating mass-produced goods. We learned to be happy with a black car, because that was what Mr. Ford made. Today, just as we can perform full-lifecycle accounting of a factory and find that it extracts value and carries costs that have not been factored into the price and passed on to society at large, we find that producers have simply started collecting personal information and selling it to one another instead of engaging in the negotiation that recognizes the personal property in personal information. Furthermore, we know that, based on the personal property mined from our interactions, some organizations can change the individual’s lifelong cost curve for a service – the canonical example is the health care provider who raises premiums or simply refuses to insure someone identified as being at great risk of incurring medical costs. Both the economy-wide and the many interpersonal interactions that make up the whole economy then begin to whittle away at the actual wealth of people, who don’t even realize they are losing value moment-by-moment. They will eventually be reduced to an informational-economic form of indentured servitude, where their willingness to pay and capacity to earn through labor, rather than from the value of the full range of personal informational assets they possess, will be carefully managed by marketers until they are exhausted of value.

Without a sense of the value each person generates in information, whether you call the concept “privacy” or something else, this discussion will produce a generation in which some people are reduced to the role of factory-farm pigs, existing simply to generate profits instead of living as individuals with self-worth and dignity.

So, let’s avoid the “Privacy’s dead, now let’s get down to business” rhetoric. It prevents us from going to work for the people whose privacy, regardless of the definition, has been destroyed without their consent. The rhetoric gives us an excuse to ignore the messy part of the economy that has emerged in clear focus: People’s preferences are a relevant and valuable component of the value chain for the first time in history.

Author: godsdog

Mitch Ratcliffe is a veteran entrepreneur, journalist and business model hacker. He operates this site, which is a collection of the blogs he's published over the years, as well as an archive of his professional publishing record. As always, this is a work in progress. Such is life.