Can You Trust the Ministry of Privacy?

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With great fanfare, Vice President Al Gore has set out his "Electronic Bill of Rights," declaring that new government initiatives are needed to protect our privacy. The contradiction here should be obvious: Growing government power is the greatest threat to our rights and liberties, privacy among them.


But one cannot expect any policy initiative driven by fear to make much sense. And -- ironically, Gore markets himself as an Information Age kind of guy -- there's little more than fear of technology behind his privacy initiative.


Many Americans have legitimate concerns about the privacy of their medical records -- and the primary threat to that privacy is the growing interference by government with medical markets. The federal government pours billions of dollars in subsidies into a failing Medicare system, resulting in rampant fraud and waste as well as soaring medical costs.


Rather than bite the political bullet and reform the system, the government wants its auditors to address the fraud problem by having more access to our health records. This culminated in the recent proposal by the Department of Health and Human Services to assign every American a "unique health identifier" to track his or her medical history from birth to death. Forcing such an identifier on the public raises the possibility that those with mental illness, alcoholism or injuries inflicted by sexual abuse will avoid treatment to protect their privacy.


The administration's recent announcement weasels around this issue, assuring us that "the administration is committed to not implementing the identifiers" until "strong privacy protections" for medical records are in place. But Secretary of Health and Human Services Donna Shalala's earlier proposals sanctioned warrantless access to health records for police and auditors. Gore's announcement does nothing to change this.


Inescapable conclusion: The logical result of growing government power over the health care system will be more and more government demands for access to our health records. Gore's assurance that the government can be trusted as the guardian of our medical privacy is a Band-Aid on a festering wound. The best way to protect medical privacy is to get the government out of the health industry.


But what about direct marketing? Gore says "you should have the right to choose whether your personal information is disclosed; you should have the right to know how, when and how much of that information is being used," and he announced at New York University in May that he wants to "stop direct mail companies and telemarketers from using your personal information." Premise by premise, that is an intellectually bankrupt attack on freedom of information.


Once we give our information to somebody, it isn't ours to control anymore, unless the other person agrees to keep the information private, as a doctor or a lawyer would, or as Geocities did. GeoCities, a company that offers consumers free Web sites, became the target of FTC actions when it allegedly sold customer information when it promised not to.


But the general rule should be freedom of information. If I buy a set of gardening tools from Sears, there are two parties involved in that -- Sears and myself. I have no more right to demand that Sears keep the event a secret than Sears would have to demand that I not tell my friends -- and Consumer Reports -- about a problem with the tools.


As more and more commerce takes place over the Internet and through catalogs, it becomes harder for retailers to know what their customers want and need. Marketing to everybody on the chance that 1 percent or 2 percent will buy is expensive and wasteful. When entrepreneurs can capture and use information about customers' habits, tastes and preferences, everybody wins. Consumers get less pointless junk mail; businesses trim needless costs. That's only the beginning. Entire new product lines and businesses can use marketing information to get started. Discouraging direct marketing isn't pro-consumer, it's anti-competitive.


Countless small businesses and nonprofits rely on free trade in information about consumers to get started. Imagine that you want to start an organization to save greyhounds too old to race. The way to do it is to buy a list of donors from an established humane society. Suppose the humane society had to go to every individual donor and get his permission before selling the list. There probably wouldn't be a list at all, or it would be hopelessly expensive, and your greyhound group would never get off the ground.


How could an Information Age guru like Gore get it so wrong? Part of the answer is that people who are motivated by fear don't think clearly. Gore's address at NYU is again revealing: "Today, we see the rise of new fears, ones that are very real. In the course of an average day, you may use your credit card to buy groceries."


What exactly does Gore think the credit-card company is going to do with the information it gathers? The most likely outcome is that the company will send you an offer for a discount coupon for groceries. Compared with expanded federal wiretapping power and restrictions on encryption -- which the Clinton-Gore administration has backed -- the grocery example is utterly trivial. And even Geocities' alleged breach of promise didn't require FTC action -- a plain old common-law action for breach of contract by aggrieved consumers would suffice.


But what about protecting the privacy of children, which Gore and the FTC advocate vigorously? Most online commercial sites that collect names, e-mail addresses and ages of visitors may seem seedy but pose no real danger. The concern about Web sites targeting children has been inflated far out of proportion. Also note: The White House's Web site for children, which posts no privacy policy, asks children for their names, ages, schools and addresses.


Government poses a unique and special danger to privacy because only it has the power to control the armies, the police and the courts. So the Constitution of the United States carefully limits the powers of government; the Bill of Rights restricts the power of the police to snoop without a warrant.


We don't need Gore's new Privacy Bill of Rights. We do need to take the original restrictions on government seriously, especially when the growth of government threatens to shut down the Information Age.


Solveig Singleton is director of information studies at the Cato Institute, Washington, DC, and co-editor of the upcoming book "The Regulators' Revenge: The Future of Telecommunications Deregulation."
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