The Bear’s Lair: When Big Brother knows everything

We are rapidly approaching a position where, though genetic testing and infinite information searching, both the state and some private companies can know everything they need to know. Our genetic predisposition to disease, our dislike of the government, our taste in partners and our risky behaviors in gambling joints, strip clubs, empty roads, Internet porn and alt-whatever sites and the drug store will all be readily available information. We need to figure out how such a society could possibly be made to work.

The acquisition of universal knowledge by government and those businesses willing to pay to acquire it results from a combination of new technologies. Genetic testing allows us to predict possible illnesses and adverse tendencies in our future, and the results are potentially available to third parties. The spy agencies now have the ability through “Big Data” algorithms to get hold of huge amounts of data about our activities, and like all tech advances, this data will become more readily available to those beyond the most secret recesses of government. Marketers already have huge amounts of information on our buying habits and on our Internet surfing habits (including our interest in porn and in political movements that may not be approved of by the majority.) “Smart” appliances will soon communicate, informing the “cloud” of such matters as the contents of our fridge and whether we drive too fast when the road is empty.

One key limitation on the amount and completeness of information which government can collect about our activities is the continued use of physical cash. Any transaction that is processed electronically is vulnerable to government snooping. There are thus two very important civil liberties reasons why we must insist on the continued use of cash: its ability to restrict government snooping and its ability to prevent government confiscatory monetary policies of hugely negative interest rates.

It will not be possible to preserve anonymity on such matters as medical data, because of the capabilities of “Big Data” analysis. There is already a market for de-identified data, for use in such areas as demographics and marketing; it will be a simple matter, given enough such data, for it to be re-attached to the individuals involved.

Among the tech community, there is already a substantial movement to fight back against all this data collection. Chat programs such as “Telegram” and “Signal” already have high-level encryption, in an attempt to deter unwanted data collection from their users. While the advent of quantum computing may make it easier for specialists to decode chat programs’ algorithms, it also seems likely to produce algorithms that, being based on arbitrary quantum states, are effectively uncrackable.

Governments and their information-gathering agencies will get very bent out of shape if algorithms are devised that the code mavens cannot decipher. They will mutter darkly (and correctly) about the ability of such programs to be misused by terrorists and other bad guys. A world in which terrorists can communicate undetected across the globe will also be an unpleasant one; it will however suffer from a different set of problems from the world I am envisaging, in which nobody has any secrets at all.

For the remainder of this column, therefore, I will assume that the battle between the nerds and the spooks will be won primarily by the spooks, and that pretty well all our private information will be available to governments and large companies. I will however pay such agencies and companies the compliment of assuming that their own security will be reasonably tight, so that the likelihood of the criminal classes also having access to all our private data is only moderate, and such unpleasantness will happen only occasionally and partially.

Information which government and some companies will have in the new secretless world is likely to include the following:

• Genetic information on health predispositions, including diseases you may get in later life and abnormalities you may be carrying and could pass on to offspring. Medical records will also be far more available through the wonders of Internet communication; if they exist on an electronic database they will be accessed.
• Financial information on all credit card and banking transactions and overall analysis of your spending patterns
• Information on any “bad habits” you may have, such as a propensity to gamble or an irresponsible attitude towards sex and marriage (and people’s attitudes to “irresponsible” will of course differ.) Adulterers, for example, may be in the position where their employer and the government know of their infidelity but their partner doesn’t.
• The “Internet of Things” will pick up any eccentric lifestyle choices. Midnight raids on the fridge and speeding on empty roads will no longer be secrets.
• Your Internet activities are already known by the likes of Google; in future the government and your employer will know about them too. Your excessive interest in porn or alt-whatever politics will be public knowledge.
• Not only your actual addictions to opioids or alcohol will be known; so will potential dangers in that direction, through your purchases at drug stores and liquor stores. (This will provide an enormous incentive to focus your addictions on illegal items, where the black economy will presumably continue functioning in some form, without an evidence trail that can be picked up by employers or governments.)

There are two forms of knowledge which governments and others will obtain by this means: that of what has already occurred and that which throws a light on what is likely to occur in the future. For example, medical records refer only to the past, while genetic records include information on what may happen to an individual later in his life. There will undoubtedly be a movement to prevent insurance companies and employers from making use of the latter type of information, on the grounds that it involves uncertainty – the future is intrinsically unknown. However, much past information (such as criminal records) is used only as it might affect future behavior, so the difference in principle between past and future information would appear so slight that it would not be desirable to insert this additional barrier to free commerce.

Assuming therefore that all information is available to employers and insurance and companies, there will be two political tendencies as to its use. One will be to ban discrimination on the basis of such information, just as discrimination is now banned on the basis of age or sex, and in some jurisdictions on the basis of criminal records. The other, and preferable alternative, will be to allow full use of such information, accept that some people may be unlucky in their genetic inheritance just as they are in their record of illness or their IQ, and allow the market to work its will.

Geniuses with rare genetic diseases would not get jobs with the government or with large corporations, but would be able to flourish in the small-company sector, where their abilities would have a high market value until their disease kicked in. Of course, there would be people who through an unfortunate genetic inheritance would need help from the state to pay their market-determined insurance premiums, but a direct subsidy in such cases would be far less costly overall than banning use of the available information.

Beyond insurance, there would be one overwhelming problem with a society in which Big Brother, government or corporate, knew everything about you: the unwarranted power which that knowledge would give Big Brother. At one level, it would allow Big Brother’s minions to extract all kinds of unjustified rents through semi-blackmail of people who Big Brother knew to be vulnerable. At another, more serious level, it would give Big Brother to attack disfavored people legally. Essentially everybody who was disliked by the authorities would be subjected not just to an IRS audit but to a police investigation and prosecution on the basis of one of the innumerable fuzzy laws which a witless Congress or an unaccountable Executive Branch have passed.

There are thus two defenses that are needed against a world in which Big Brother is omniscient. First, there must be massive legal reform, concentrating in particular on laws such as those on insider trading, the Racketeer Influenced and Corrupt Organizations Act, the laws on civil forfeiture, much environmental law and other provisions that are excessively vague or by which government improperly imposes penalties on the citizenry. Laws must be simple, clear and sharply limited, as the Founding Fathers intended. A Big Brother that is omniscient can use the power of vague, ill-defined or over-extended laws to extract unjustified rents through blackmail. Only a citizen who can be confident that he has broken no law can stand up against an omniscient Big Brother. The laws must be drastically reformed to ensure that most citizens can have that assurance.

Second, once the laws have been cleansed so that there is no question of legal penalties in most cases, the citizenry must be trained to resist blackmail by those in power over them. The Duke of Wellington’s response to the courtesan Harriette Wilson: “Publish and be damned” must be the automatic response of any citizen to an official who attempts to blackmail him.

We must also introduce a much stronger law of libel, or make it an offense to publish detrimental information about a private citizen without a clear public purpose. Mrs. Harriet Arbuthnot, when told in 1824 by her cousin Lord Burghersh that a newspaper had published a scurrilous libel about him, advised Burghersh to horsewhip the editor – with Radical juries everywhere, the London courts were useless in such matters. Some such retribution should be available to a citizen whose good name is injured by spurious publication of excessively available detrimental information about him. Privacy may be impossible in the modern world, but dignity remains an important attribute of the civilized life.

A world in which Big Brother knows everything is tolerable – just. But we have a great deal of work to do to put in place the legal and social structures that can make it so. Otherwise, it is truly a dystopia.

(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)