Lack of Privacy Destroys the Economy


Washington’s Blog
October 2, 2013

Edward Snowden said yesterday:

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.

He’s right. Anonymity and privacy increase innovation.

Image: NSA Spying.

Anyone who has ever played a musical instrument knows that you need time to experiment and try new things in the privacy of your home – or your band’s garage – in order to improve. If every practice was at Carnegie Hall in front of a big crowd, you would be too self-conscious to experiment and try something new.

Same with every other field. Think of an artist painting in the middle of a major museum. Or a beginning programmer (think of a young Bill Gates or Steve Jobs) whose code is being livecast all over the Internet. Or a brilliant inventor (such as a leaner Elon Musk) whose first rough sketch is being dissected in real time.

As 4Chan’s founder noted:

[Facebook founder Mark] Zuckerberg’s totally wrong on anonymity being total cowardice. Anonymity is authenticity. It allows you to share in a completely unvarnished, raw way,” Poole said, adding that the internet allows people to “reinvent themselves” as if they were moving home or starting a new job.

“The cost of failure is really high when you’re contributing as yourself,” he said.

Moreover, trust is key for a prosperous economy. It’s hard to trust when your government, your internet service provider and your favorite websites are all spying on you.

In addition, 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)

And as we noted last December:

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.

Of course, many of this decades’ national security measures have not been taken to keep us safe in the “post-9/11 world” … indeed, many of them [including spying on Americans] started before 9/11.

And America has been in a continuous declared state of national emergency since 9/11, and we are in a literally never-ending state of perpetual war. See thisthisthis and this.

***

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.

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.

Tyler Durden of Zero Hedge points out (edited slightly for readability):

Though often maligned (typically by those frustrated by an inability to engage in ad hominem attacks), anonymous speech has a long and storied history in the United States. Used by the likes of Mark Twain (aka Samuel Langhorne Clemens) to criticize common ignorance, and perhaps most famously by Alexander Hamilton, James Madison and John Jay (aka publius) to write the Federalist Papers, we think ourselves in good company in using one or another nom de plume.

Particularly in light of an emerging trend against vocalizing public dissent in the United States, we believe in the critical importance of anonymity and its role in dissident speech.

Like the Economist magazine, we also believe that keeping authorship anonymous moves the focus of discussion to the content of speech and away from the speaker – as it should be. We believe not only that you should be comfortable with anonymous speech in such an environment, but that you should be suspicious of any speech that isn’t.


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