Our scenario: let the market handle privacy - includes related articles on the imbalance in power between individuals and big organizations, historical and legal aspects of privacy and a person's value to direct marketers

RELease 1.0, June 30, 1991 by Esther Dyson

Power in anyone's hands is still power The fundamental issue here is the inequality of power between the individual and all institutions: marketers, employers, government agencies. The problem is that all big organizations come to resemble each other in their power over citizens and their impenetrability. Even without meaning to, they can make someone's life hell. And when they do go after someone, they have huge resources unmatched by any citizen - whose only recourse may be to go to another bureaucracy.

Is this the way we want to live? We don't see any way of rolling the world back to a kinder gentler society, where surveillance was performed by spinster teachers whose lives revolved around other people's children, kindly drugstore owners who called parents if kids were out late, loquacious hairdressers who knew everything, smalltown bankers who lunched with smalltown lawyers and passed on confidences (in their clients' best interests, of course). The point is that privacy didn't exist before either. Although these smalltown institutions lacked the power of a giant bureaucracy, they could destroy your life in your own community. Now, your relationships with these bureaucracies may be unknown to your neighbors, but they can likewise take over your life. We can certainly change assumptions about privacy by legislation and by education (witness the change in smoking behavior, or the cycles in attitudes towards drugs and sex). But putting in place economic incentives for the protection of privacy is probably the best way to guarantee privacy in a world where information can and mostly should flow freely. (Personal decisions about marriage, children, education, are also influenced by economic factors. Money is generally a medium which allows people to make personal choices rather than follow the dictates of a society which expects everyone to make the same choices and optimizes things for people who follow the norm. Yes, people with more money have more choices - and one big choice is to have less money and more children or more free time or less junk mail.)

What are you worth? What sort of money are we talking about here? It's hard to predict, but work on the rule of thumb that a name" classified by some useful information - bought more than $100 of home furnishings by catalogue in the last 6 months, subscribes to the Whole Earth Review, lives in New York and uses hotels in Palo Alto, registered as an Excel user - costs from a few pennies to half a dollar at most. Straight neighborhood names all occupants at all postal addresses in ZIP Code 94303 - cost much less, a cent or less per name. So, as a rough calculation, assume you'd get a nickel or a dime for each piece of mail or telemarketing call you receive. That would be net of commissions to your agent. (Nationwide, direct marketers spend about $4 per household per day, heavily skewed to high-income households.) Of course, you'll get less junk mail because marketers will be able to mail more carefully; on the other hand, they'll be willing to pay more for good information, and so you may get more mail that's relevant (if you want to sell them that information). In the end, you now control (in the aggregate) the amount of mail you receive. If Porsche owners as a group don't like to publicize that fact, those who do will be able to earn more by letting the information slip. As in any market, an individual may not be able to set the price, but he can decide whether or not to make a transaction at the price offered.