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The "Hidden" Cost Of Privacy
Schneier points out an article from a while back in Forbes about the "hidden" cost of privacy and how expensive it can be to comply with all the various overlapping privacy laws that don't necessarily improve anyone's privacy. "What this all means is that protecting individual privacy remains an externality for many companies, and that basic market dynamics won't work to solve the problem. Because the efficient market solution won't work, we're left with inefficient regulatory solutions. So now the question becomes: how do we make regulation as efficient as possible?"
1. Fake own death
2. ???
3. Private!
Reframe this debate into the cost of doing business in a democracy.
Ubiquitous networks capture data from home address to everyday transactions in detail. Private informations accumulate. Markets function on personal information. The expectation of privacy, its protection and concommitant personal security relying upon privacy regulation is a straw man standing in-place of an individual right.
Simply raising the strawman argument that your right to privacy is political, denigrates its consititutional status to regulatory statute.
Either the right to privacy is immutatable, codified in the constitution or too expensive? Reframe this debate into the cost of doing business in a democracy.
"What this all means is that protecting individual privacy remains an externality for many companies, and that basic market dynamics won't work to solve the problem.
Most problems, even when you're talking about business, cannot be solved by the free market. Privacy problems could be solved by legislation and/or regulation, but unfortunately governments care even less about your privacy than the corporate Ferengi do.
"Free market" is an oxymoron. Anyone who believes it can solve all the world's problems is just a moron.
Free Martian Whores!
It's funny that one could look at this and say the markets don't work. The markets ARE working and that most people don't actually care about privacy.
If people -cared- about privacy, they would be willing to pay for the extra care it takes to ensure that their data is private. But, we live in a world where most people really don't care so much if everyone else knows what they are doing, so long as they are not confronted with it, or misuse the information.
Like, if you told someone at a grocery store that, to get their "club card" savings, the store would know exactly what they bought, they would say, they probably didn't care. Now, if they got a letter from the grocery store saying, "hey, since you like strawberries, you might like our sale on blueberries", they might dig that too. And, if they got junk mail from blueberry and strawberry growers, even that might be ok. But, if they got an email saying, "hey, you are killing humanity because you are eating strawberries and your preference for red fruit makes you some kind of a communist", then they would be pissed off.
Bottom line is, people don't care about privacy, but they do care about having their personal information being used to hurt them. It's pretty much the 5th amendment proposition, writ large and writ everywhere. Nothing is really private, but, you can't have your personal information be used to attack you, and that is what the market reflects.
This is my sig.
Define the ownership of personal data to include the person whom the data applies to.
If I enter into a business relationship with someone else, all the information I provide should be considered to be co-owned by both of us. Any subsequent sharing of that information with a third party should involve both the consent of both of us as well as sharing the proceeds of that subsequent exchange. When the costs of managing such transactions are factored in, far fewer of them would occur.
The idea that anyone complains about the costs of complying with such regulations puzzles me. I mean, I could start a business stealing cars and then complain that the costs of complying with auto theft laws were onerous and harming the profitability of my enterprise. Tough sh*t. Its all based on fundamental property rights. Just because someone has developed a business model based upon a legal oversight doesn't legitimize their complaint when the law catches up and plugs the loophole.
Have gnu, will travel.
There are even more direct costs for consumers who wish to maintain their privacy these days. For example, how many of you have signed up for the discount card at the supermarket or the "rewards card" at any number of other businesses? Unless you have taken other steps which also cost money, such as arranging a mail drop or renting a PO Box, you have essentially "sold" your privacy in exchange for a discount on purchases. Those of us who value our privacy and wish to maintain it are frequently compelled to forgo such discounts or else pay, in time, money or effort, to set up specialized fronts to protect our "true" identities (i.e. the mail drop, aliases, corporate credit card, etc). Perhaps privacy was less expensive in the distant past, but in modern society preserving it effectively is becoming ever more labor intensive and expensive. In fact, the invasion of our privacy is now so pervasive that people give strange looks to those of us who decline to be part of "rewards", club cards, and other privacy invasive schemes in exchange for discounts; as if they cannot understand why someone wouldn't fill out a card with their real name, address, SSN, and mother's maiden name in exchange for a $5 discount.
Yes, it is.
Transparency for the state means transparency on laws as they are prepared, transparency towards regulatory bodies of those laws, etc... It means that the rules that state officials prepare and their work is fully transparent.
Still, the said officials can retain the full privacy of everything that isn't directly work related (IE. What they do on their time off work, what they do during their lunch breaks, whose photo they have in their wallet and what bodyparts have they pierced...)
State is indeed some concrete thing, independent from individuals. Ideal situation is that state represents the masses but it never represents the individuals.
You have:
SOX, CISP, GLBA, HIPPA as the most expensive for corporations. I can speak to CISP and HIPPA from a professional standpoint. The others I cannot.
CISP compliance has a serious impact in that test environments cannot use raw customer data for testing for banks. Sanitized data must be used in test environments normally. In the event of a product fix that needs to be testing back in a test environment offshore resources for instance cannot have access to those environments and the data must be documented and exist only for a limited time. Pulling 20,000 records for testing for instance may take 4-6 hours pre-CISP but post CISP the sanitization process may push that out to 5-10 hours. If you are attempting to do that process in the evening, with only a 6 to 8 hour window CISP meant that many had to beef up their systems to ensure the process was complete within the window. For smaller banks the costs must have been harsh. Updating software, policies and procedures can easily rack up a 6000 labor hours in the first year.
On average CISP complaince can double the turn around time of a production fix (say 20-60 hours of labor) into 40-80 hours for turn around. YOu have an entire chain of events that fire off and kicking out certain staff due to the existence of customer information takes time with SAPs, VPN connectivity, etc... Great for the customer, I cannot argue it, but expensive.
HIPPA I can speak to growing up in hospitals and clinics as well as painting in those locations part time. Part of the requirement that I see directly is, if I have to paint a clinic or office the clinic staff (not I the painter) has to go through and ensure that ANY AND ALL patient documentation is out of sight prior to me starting. HIPPA has too many "reasonable" language mistakes in it as who defines "reasonable"? The judge? Lawyers? JACO? Who? So paranoia is high with patient data (as it should be.) But getting staff to lock all that up prior to maintenance adds time.
Another hidden factor is space. A clinic now has to try and keep other patients out of ear shot pushing the lobby out farther.
Further segragation of roles and even something as simple as those privacy screens add up. In a typical hospital with 200 computers in it let us say, means at $10 bucks a screen you have $2000 in new expenses.
I've seen a few locations require the inter-office mail couriers to have locked boxes while moving around the facility. Those have to cost at least $350 bucks a box for those.
Now all those HIPPA forms are going to double if not triple the amount of paper you are ordering. Liability and insured communications also increase costs and add delays. More cerified mail goes out now as far as I can see since HIPPA also.
One thing to keep in mind is that ANY GOVERMENT COMPLIANCE that exists is disporotionally expensive to smaller organizations. SOX killed a lot of smaller corporations due to the cost of compliance. The smallest get exemptions, the largest can afford it, it's the mid-size businesses that get crushed.
-=[ Who Is John Galt? ]=-
"Because the efficient market solution won't work, we're left with inefficient regulatory solutions."
What a load of clap-trap...read this and ignored the rest of the article as it's obvious they don't understand economics.
If a company wants to reduce its costs for protecting private information, stop collecting the damn stuff in the first place. As a recent example, why do I need to register at a website just to listen to a few bird call recordings? Or give my (fictitious) name and address just to read an article?
As long as we allow the financial ( including Federal Taxes ) and medical industries to store and or retrieve our information at off-shore facilities ( like India and others ) we can not have any privacy. In fact, we are opening ourselves up to a greater risk of identity theft.
The rate of security breaches have not slowed down, we are just not hearing about them in the headlines. You have to search for them.
So American's were completely brainwashed by the Reagan years
American's WHAT were brainwashed? Oh, I see, you simply don't understand how to use an apostrophe. Understandable since English is probably not your first language.
Not all of us are Reaganites. His slashing the capital gains tax hurt a LOT of ordinary, non-rich workers when it unleashed a flurry of corporate buyouts and sellouts, which resulted in workers being laid off or hours cut.
And wealth doesn't trickle down, it flows up. The programmer, bricklayer, songwriter, carpenter, laboror creates wealth. His employer simply aggregates and controls it. Cutting taxes on the poor and middle class helps the economy, cutting taxes on the upper class hurts it.
Free Martian Whores!
I see rationalization for government and business intrusion into private lives. 90% of the information requested and/or demanded by any given government agency or business is totally unnecessary. It is none of my phone company's business how many people live in the house, or might use the phone. It is none of my ISP's business how many computers I own, or how many of them might connect through the gateway, or even HOW they might connect. The government's preoccupation with the precise identification leads to requirements for fingerprints, DNA samples, and more. I once ordered a pizza, in person, with cash in hand, and the cashier insisted that she needed my phone number and address!! The stupid broad doesn't even need to know my NAME to trade a pizza for a twenty dollar bill!
In the article, a baker was entrusted with financial information of her clients. HOW FREAKING BOGUS!! To bake a wedding cake does NOT require storing my credit card information, or any other personal details.
Totally unnecessary information is harvested for the most trivial dealings. And, it's WRONG.
No government agency, and no business should request information that is not absolutely essential to perform the business at hand. Nor should they request any more information than they are willing and capable of storing in a SECURE manner. It is their RESPONSIBILITY to safeguard that information, it isn't some "expense", or an "option", it shouldn't be considered a "burden". If and when safeguarding information becomes an "expense", then it should be obvious that they are collecting unnecessary and trivial information.
TFA is bogus rationalization, and an attempt to get people to sympathize with some perceived need to dump privacy laws. Forbes and Lee Gomes should be slapped silly for even writing and printing the article.
"Windows is like the faint smell of piss in a subway: it's there, and there's nothing you can do about it." - Charlie Br
The problem is that we don't have enough regulations. If one regulation isn't working, slap another on top of it. Keep piling them up until the problem goes away. Remember, the government is our friend, and only sociopaths would object to more government involvement in their lives. ... but seriously folks...
The core problem is that the property rights around privacy are ill defined. Who owns the information? Regulations can be minimized while being more effective, if they addressed the property rights involved. While I don't think the information itself can be owned, the media upon which it resides can be. Your diary, your server, etc. For example, you don't own your address information, and cannot legitimately stop someone from disseminating that information ("Bob lives at 123 Main Street"), but that letter is your private property, and you should be able to sue the crap off anyone who opens it and reads the contents. Mail servers are typically the property of the ISP, but you are renting its use so your emails are as much your property as your clothes hanging in a closet of a rental apartment.
Don't blame me, I didn't vote for either of them!
It is sufficient that a free market is at least as efficient as any other system, given the same issues of limited rationality and imperfect information. These issues are a part of every system made up of human actors, and do not unique affect market economies.
In any event, the need for rationality is often overstated. It is enough that most participants practice rational self-interest given subjective--essentially arbitrary--goals. The goals themselves can be perfectly irrational. Failing at rational self-interest itself requires one to deliberately act in a way known to be contrary to one's own goals. Naturally, this is a very rare occurrence. Similarly, free individuals acting via an open market is the only efficient way to answer the question you posed regarding the value of good information relative to the cost of acquiring it.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
And wealth doesn't trickle down, it flows up.
Yeah, contrary to the term "trickle down economics", I think the real intent was always to help wealth flow up. However, I don't think it was *purely* for the nefarious reasons that people assume, but rather from an economic philosophy that "Rich people are rich because they know how to manage and spend money well. If we want our economy to be run as well as possible, we should give as much money as we can to rich people." You can see it if you listen carefully to some people's rhetoric.
You see it in their complaints about any funding to help poor people, to provide health care, or anything else. The idea is, all poor people are poor simply because they've made bad choices, done the wrong thing, and are providing no value to society. Inversely, they believe that rich people deserve all their rewards because they are only rich because of their good judgement and contributions to society.
However, it is true that wealth has a habit of naturally trickling up. Like all forms of power, having economic power gives you the ability to draw more economic power to yourself. It's easier to get loans and investments if you already have lots of money, you can hire competent people to manage your money for you, and you have the upper hand in any conflicts you get into with those less powerful than you (even if you're in the wrong). It's just easier to go from having $100 million to $101 million than it is to go from $0 to $1 million.
I agree, with additions. When I say that wealth flows upwards, I mean that the wealthy do not create wealth. The poor and middle class create wealth.
And luck has more to do with poverty and riches than any other cause. Look at Bill Gates - his parents were lawyers working for IBM. If he'd been born in poverty, there would never have been a Microsoft. If the guy IBM was going to buy their OS from hadn't gotten sick of IBM's BS and told them where to shove it, PC/M would have been the dominant OS, rather than DOS.
My uncle was rich. He was wounded in WWII, and several lucky things caused his wealth. First, creativity and eye-hand coordination runs in the family. Second, he was in the right place at the right time. If his ship hadn't been bombed, he wouldn't have wound up in the hospital with his future partner, who had lost a leg. When the guy showed his new artificial leg to my uncle, my uncle said "that's a piece of shit, I can make a better leg than that", and did.
His partner was a born salesman. He'd walk into the hospital to talk to the new amputees, who would say something to the effect of "what the fuck would you know about it?" and he'd just roll his pants leg up. Instant sales.
Sure, there was a lot of hard work and sacrifice involved, but if it hadn't been for luck he'd never gotten rich.
The same goes with poverty. Few people are born rich and wind up poor. Even if they squander all their money, they still have contacts. A while back there were radio commercials about Donald Trump's "how to get rich" book, what would he know about getting rich? He was born into wealth!
Do you think anyone would have ever heard of Paris Hilton if her parents weren't the billionaires who owned the hotel chain? What chance does a kid born of illiterate drug addled parents who is shuffled between foster homes have?
If you give rich people money, they'll just squirrel it away -- they already have plenty. But give it to a waitress and she'll spend it, because she has to. Only money that's spent helps the economy.
Free Martian Whores!