Privacy and markets

Nanette Perez of ALA’s Office for Intellectual Freedom sent out a link to this AOL study on web users’ behavior and statements regarding data privacy. The study finds, unsurprisingly, that most web users say they highly value privacy online but routinely give it up in exchange for convenience or small rewards.

This study illustrates a problem that libertarians pose all the time, and one which deserves an articulate answer. If people say they want one thing but show they want another by their behavior in the marketplace, does that mean we should ignore their expressed values and let the market make our decisions as a society? For example, if people say they don’t want to support sweatshops but keep buying cheap clothes at Target, a libertarian might say, don’t their decisions in the marketplace show their real priorities?

This is why critics call free-market policy directions a “race to the bottom.” People are complex and multilayered. We tend to be at our worst when faced with temptation, which is what we’re asking for when we don’t use democracy to turn our values into regulatory policies. We want free choice, but we recognize that all choices are made in a certain environment and under certain conditions. We want to shape our environment in order to help us make the choices that on reflection we want to make.

I’m with the subjects in this study who want more privacy online but routinely give it up in exchange for the web-based services that I have come to expect as normal. I don’t want to give up these services in exchange for my privacy. I would prefer to regulate industry properly so that my privacy is protected prior to my web transactions. Free-marketers who think that people’s economic decisions reflect their real values are ignoring the complexity of the human psyche. Choices are shaped by the conditions under which they are made, and people want the ability to shape those conditions based on their values. Clarifying our values requires time for reflection that is not usually available at the moment of market transactions, a moment when the value that is immediately present is the good or service and the way it is marketed. If the conditions under which we make economic choices are part of a public market, then the policies we set in order to control those conditions are necessarily social and shared.

So there’s my rebuttal to the libertarians out there, whose party is over right about now…

One comment on “Privacy and markets

  1. People generally believe that their privacy SHOULD be protected, but they also realize that it ISN’T protected. Given that it isn’t protected, they’re not so resistant to giving out some private information for some gain. It’s simply realism. Many would agree with your preference prefer to regulate the industry “properly” to protect your privacy. Yet effective rules that protect privacy are extremely difficult to design, let alone implement.

    I don’t think that the free-market “race to the bottom” refers to the public’s compromise of principles for gain. Rather I think it’s a description of what happens to free markets in the absence of regulation. If free markets are free to lie, cheat, pollute, use child labor, intimidate unions, etc., they will. In fact, they will race each other to see who can exploit the most the fastest.

    You observe that “clarifying our values requires time for reflection.” That’s true, but it doesn’t follow that giving more time for reflection will result in a resolution of the apparent conflict you mention.

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