Reprinted with permission
Privacy is a prerequisite for a prosperous economy. Even the White House admits:
People must have confidence that data will travel to its destination without disruption.Assuring the free flow of information, the security and privacy of data, and the integrity of the interconnected networks themselves are all essential to American and global economic prosperity, security, and the promotion of universal rights.
Below, we discuss five ways that mass surveillance hurts our economy.
1. Creativity — A Prime Driver of Prosperity — Requires Privacy
The Information and Privacy Commissioner of Ontario, Canada — Ann Cavoukian, Ph.D. — noted last month:
Privacy is Essential to … Prosperity and Well-Being
– Innovation, creativity and the resultant prosperity of a society requires freedom;
– Privacy is the essence of freedom: Without privacy, individual human rights, property rights and civil liberties — the conceptual engines of innovation and creativity, could not exist in a meaningful manner;
– Surveillance is the antithesis of privacy: A negative consequence of surveillance is the usurpation of a person’s limited cognitive bandwidth, away from innovation and creativity.
The Financial Post reported in February: “Big Brother culture will have adverse effect on creativity, productivity“.
Christopher Lingle — visiting professor of economics at ESEADE, Universidad Francisco MarroquÃn —agrees that creativity is a key to economic prosperity.
Edward Snowden said last year:
The success of economies in developed nations relies increasingly on their creative output, and if that success is to continue we must remember that creativity is the product of curiosity, which in turn is the product of privacy.
Silicon Valley is currently one of the largest drivers of the U.S. economy. Do you think Bill Gates and Steve Jobs could have tinkered so creatively in their garages if the government had been watching everything they do?
Everyone who has every done anything creative knows that you need a little privacy to try different things before you’re ready to go public with it. If your bench model, rough sketch or initial melody is being dissected in real time by an intrusive audience … you’re not going to be very creative.
2. The Free Flow of Information Requires Privacy
Moreover, surveillance hampers the free flow of information as many people begin to watch what they say. The free flow of information is a core requisite for a fast-moving economy … especially an information economy, as opposed to economies focused on resource-extraction or manufacturing.
As quoted above, the White House states:
Assuring the free flow of information [is] essential to American and global economic prosperity, security, and the promotion of universal rights.
Mass surveillance makes people more reluctant to share information … and thus hurts the economy.
3. Mass Surveillance Hurts Productivity
Top computer and internet experts say that NSA spying breaks the functionality of our computers and of the Internet. It reduces functionality and reduces security by — for example — creating backdoors that malicious hackers can get through.
Remember, American and British spy agencies have intentionally weakened security for many decades. And it’s getting worse and worse. For example, they plan to use automated programs to infect millions of computers.
How much time and productivity have we lost in battling viruses let in because of the spies tinkering? How much have we lost because “their” computer programs conflict with “our” programs?
Microsoft’s general counsel labels government snooping an “advanced persistent threat,” a term generally used to describe teams of hackers that coordinate cyberattacks for foreign governments. It iswell-known among IT and security professionals that hacking decreases employee productivity. While they’re usually referring to hacking by private parties, the same is likely true for hacking by government agencies, as well.
And the spy agencies are already collecting millions of webcam images from our computers. THAT’S got to tie up our system resources … so we can’t get our work done as fast.
Moreover, the Snowden documents show that the American and British spy agencies launched attacks to disrupt the computer networks of “hacktivists” and others they don’t like, and tracked supporters of groups such as Wikileaks.
Given that the spy agencies are spying on everyone, capturing millions of screenshots, intercepting laptop shipments, creating fake versions of popular websites to inject malware on people’s computers, launchingoffensive cyber-warfare operations against folks they don’t like, and that they may view journalism,government criticism or even thinking for one’s self as terrorism — and tend to re-label “dissidents” as “terrorists” — it’s not unreasonable to assume that all of us are being adversely effected to one degree or another by spy agency operations.
Bill Binney — the high-level NSA executive who created the agency’s mass surveillance program for digital information, a 32-year NSA veteran widely regarded as a “legend” within the agency, the senior technical director within the agency, who managed thousands of NSA employees — tells Washington’s Blog:
The other costs involve weakening systems (operating systems/firewalls/encryption). When they do that, this weakens the systems for all to find. Hackers around the world as well as governments too.
These costs are hard to count. For example, we hear of hackers getting customer data over and over again. Is that because of what our government has done?
Or, how about all the attacks on systems in government? Are these because of weakened systems?
4. Trust and the Rule of Law — Two Main determinants of Prosperity — Are Undermined By Surveillance
The destruction of privacy by the NSA directly harms internet companies, Silicon Valley, California … and the entire U.S. economy (Facebook lost 11 millions users as of April mainly due to privacy concerns … and that was before the Snowden revelations). If people don’t trust the companies to keep their data private, they’ll use foreign companies.
American tech companies – including Verizon, Cisco, IBM and others — are getting hammered for their cooperating with the NSA and lack of privacy protection. The costs to the U.S. economy have been estimated to be in the hundreds of billions of dollars. And see this and this.
And destruction of trust in government and other institutions is destroying our economy.
A top cyber security consultant notes:
If privacy is not protected while performing mass surveillance for national security purposes, then the people’s level of trust in the government decreases.
And as we noted in 2002:
Personal freedom and liberty — and freedom from the arbitrary exercise of government power — are strongly correlated with a healthy economy, but America is descending into tyranny.
Authoritarian actions by the government interfere with the free market, and thus harm prosperity.
U.S. News and World Report notes:
The Fraser Institute’s latest Economic Freedom of the World Annual Report is out, and the news is not good for the United States. Ranked among the five freest countries in the world from 1975 through 2002, the United States has since dropped to 18th place.
The Cato institute notes:
The United States has plummeted to 18th place in the ranked list, trailing such countries as Estonia, Taiwan, and Qatar.
Actually, the decline began under President George W. Bush. For 20 years the U.S. had consistently ranked as one of the world’s three freest economies, along with Hong Kong and Singapore. By the end of the Bush presidency, we were barely in the top ten.
And, as with so many disastrous legacies of the Bush era, Barack Obama took a bad thing and made it worse.
But the American government has shredded the constitution, by … spying on all Americans, and otherwise attacking our freedoms.
Indeed, rights won in 1215 — in the Magna Carta — are being repealed.
Economic historian Niall Ferguson notes, draconian national security laws are one of the main things undermining the rule of law:
We must pose the familiar question about how far our civil liberties have been eroded by the national security state — a process that in fact dates back almost a hundred years to the outbreak of the First World War and the passage of the 1914 Defence of the Realm Act. Recent debates about the protracted detention of terrorist suspects are in no way new. Somehow it’s always a choice between habeas corpus and hundreds of corpses.
So lawlessness infringement of our liberty is destroying our prosperity.
Put another way, lack of privacy kills the ability to creatively criticize bad government policy … and to demand enforcement of the rule of law. Indeed, 5,000 years of history shows that mass surveillance isalways carried out to crush dissent. In other words, mass surveillance is the opposite of the principle of the rule of law (in distinction to the rule of men) upon which America was founded.
Free speech and checks and balances on the power of government officials are two of the main elements of justice in any society. And a strong rule of law is — in turn — the main determinant of GDP growth.
5. Surveillance May Dampen Consumer Spending and Animal Spirits
The timidity and fear generated by mass surveillance may also dampen consumer spending and animal spirits for investing.
After all, how many shiny new gadgets or risky investments do you think the average resident of Stasi Germany bought?