Volume 9, Number 3
September/October 2000

[Previous] [Contents] [Next]

A Moral and Economic Argument for Privacy in the New Digital Age

By Adrian M. Viens, BA Hons Philosophy, University of Toronto

"Banks access computer records, foreclose on cancer patients."⁵ This distressing headline from the United States is illustrative of the precarious nature of privacy in the new digital age. Canadians have legitimate concerns about their privacy with increased reliance on technology in our lives in the areas of medicine, commerce, and communication. In deciding the legitimacy and justification of mechanisms to protect privacy in the information age, important normative and economic presuppositions and implications need to be analyzed. Although privileged communication such as medical records and financial transactions should be accorded a higher level of privacy because of the possible harm associated with its dissemination, personal information that has been gathered by voluntary means through marketing surveys and other data collection methods should not be held to the same standards. Since the information that corporations collect provides consumers with more choice, lower prices, and better services, it is very difficult to justify the need for further governmental intervention that would limit the use of new technologies that are economically beneficial for both the individual and society. The best way to protect privacy in the new digital age is through self-regulation, not the enactment of oppressive regulations.

Philosophical Basis of Privacy

I contend that any argument made on the importance of privacy in the new digital age needs to be made as a primarily moral and economic argument, and not a legal one. The enactment of new laws governing privacy on the Internet and other digital technologies is both ethically and economically untenable. The classic liberal notion of privacy is an individualistic negative right inherent in other rights such as liberty and private property. The present democratic and moral framework of Canadian society dictates that privacy is an important social value of autonomous individuals that is worth protecting.

Although we have decided that certain information in society deserves to be protected, it has not been established that all personal information deserves protection. A great deal of the information about us that exists in society has been divulged on a voluntary basis and should not meet the criteria of information that merits protection.

What Constitutes a Violation of Privacy?

With the increased use of the Internet and other marketing tools to collect information on customers by corporations, concerns have recently been raised about privacy. There are pervasive misconceptions surrounding the effect these practices have on privacy and the need to control these actions.

When individuals choose to participate in market surveys or fill out contest forms that ask for their annual income, hobbies, et cetera, they are exercising their right to privacy. If they feel that the exposure of that information would constitute an invasion of their privacy, they are free not to participate. We all need to know that information that we give out about ourselves to somebody else (with the restriction of fidelity-based relationships such as patient/doctor confidentiality) becomes part of the public domain and cannot be controlled thereafter. The use of voluntarily-disclosed information to provide customers with lower prices and better service is not a violation of privacy or an ethical transgression.

Business Sector

Why do we automatically assume that information collected by the private sector will be used in a nefarious way? It is in industry's best interest to keep any collected information about customers protected because it can be used to promote loyalty, and competitors may be tempted to steal customers away. Moreover, this information should be allowed to be collected and traded because it does not harm or threaten to harm individuals. If there are harms associated with the abuse of personal information collected by industry (such as fraud), there are already laws in place to deal with these wrongdoings.

Why should the government stop businesses from learning more about their customers? Arguments that restrict information are difficult to maintain. Given human nature, individuals are rarely better off when they have less access to information or restricted choice. The importance of disclosure of information is reflected in our society in the informed consent process in medicine. We acknowledge that we are better equipped to make decisions about our lives when we are given more information. New regulations that inhibit the exchange of public information under the guise of privacy are economically disadvantageous and morally indefensible.

Measures such as the creation of a powerful regulatory body or legislation to control the sale and purchase of private information will not work because such measures make it more difficult for business to collect information about markets and threatens small business and electronic commerce. Such measures would reduce competition, reduce the ability to market directly to customers, and add associated hidden economic costs that would negatively affect both consumers and industry. We need to allow the market to deal with problems surrounding privacy through self-regulation because it provides the best chance at maximizing economic benefit and individual liberty.

If we were to enact laws against the private sector because some marketing practices may invade an individual's privacy by disclosing private information, what about the neighbourhood gossip who discloses information that you would have rather been kept private? What about the news media? What about freedom of speech? We begin to run into difficult and substantive ethical, legal, and political issues governing the enactment of repressive laws and regulations which, while intending to "protect" the individual, if carried to their logical conclusion, would be overly invasive and untenable.

Although private enterprise should inform its customers what information is being acquired, how it will be used, what is being done to protect that information, and how any inaccuracies can be corrected, such a requirement should be a moral and economic one, not a legal one. Businesses will conform to what their customers desire—low prices, greater variety, and even privacy. In a competitive market, companies have every reason to attempt to meet the customer's demand for confidentiality. If confidentiality is what customers truly want, industry will do it voluntarily from the bottom up and without a cumbersome one-size-fits-all privacy policy. Even though I would like to see greater protection of customer information than is presently available, we would be better off leaving it to industry self-regulation rather than government regulation.

Although there are economic and moral arguments that justify the absence of government regulation of privacy, there are is one possible negative ramification of this model. When private industry is indeed successful in regulating itself, it may result in a lack of regulation on governmental invasions of privacy. It will remain important to maintain different standards for public and private institutions because of the greater harm associated with governmental invasion of privacy.

Government

Although rules governing privacy in industry should largely be left to moral and economic forces, the regulation of private information from government sources is another matter. Private companies do not wield the power governmental agencies do. Although private and governmental databases are both susceptible to abuse, the abuse of governmental information creates a much more substantive threat because government controls the police, the army, and the judicial system. Although advertising may at times be annoying, the information collected on citizens by governmental agencies is often used in a way that negatively affects liberty, thus making privacy rules controlling the government distinct from industry.

Consumers presently have numerous options to protect their personal information from private institutions. Individuals can choose whether or not to restrict credit card use, order from catalogues, fill out sweepstakes, have their name removed from marketing lists, enable privacy features in software, and take advantage of other developing initiatives. However, because of the dangers associated with state invasion of privacy, legislation should be enacted to restrict the actions of government and agents working on behalf of the government to maintain safety, accountability, and privacy.

Conclusion

Although we must always undertake initiatives that support privacy, it should not be at the expense of freedom of expression or free markets. Market freedom and privacy do not have to be mutually exclusive. Moreover, support for these institutions gives our society a stronger moral standing.

The absence of governmental regulation of new technology does not give industry carte blanche to violate personal privacy. There are established economic and moral imperatives surrounding the importance of privacy that will require business to take substantive measures to protect its collected information from unintended uses.

Balancing innovation, benefit, and privacy in the new digital age will be of paramount importance. Education of consumers and vocalization of concerns regarding privacy will result in changes that are advantageous to both individuals and business. We need to continue to protect privileged information such as medical records and financial transactions through the promotion of encryption technology and digital pseudonyms. Citizens need to be able to take active measures to protect information that could harm them if made public.

Any new regulations that seek to inhibit the dissemination of information endanger freedom of expression (specifically speech) and begin to border on censorship. Although we must always be vigilant of practices that harm individuals (business or otherwise), we must also be vigilant that measures taken to protect individual privacy are proportional and do not infringe on constitutionally-protected rights and freedoms.

Notes

⁵ "RMs need to safeguard computerized patient records to protect hospitals," Hospital risk management, Sept. 1993: 129-40.

Editors note

This entry won Adrian Viens third place in the Fraser Institute's 2000 Student Essay Contest.

[Previous] [Contents] [Next]

info@fraserinstitute.ca You can contact us at the above email address for any comments or information requests. Please report any dead links or technical problems.