Lack of Privacy Destroys the Economy

George Washington's picture

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.

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 this, this, this 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):

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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the grateful unemployed's picture

we certainly don't want our government acting in anonymity

DaveyJones's picture

"a lack of privacy destroys the economy"

the reverse is also true


ToNYC's picture

Jimmy Whispers saves, locally.

Mercury's picture

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.



But the ZH Manifesto is almost certainly all Marla, not Tyler.

Stoploss's picture

Don't forget lack of competition, also factors heavily into the success of an economy as well. I have noticed over the years, that the removal of competition at the school age level in all sports, sets the stage for failure as young adults, because when faced with any quick thinking competitive problem solving issue, they fold like a broken lawn chair.

We have removed privacy and competition.  We cannot survive as a nation without those two componets, it is what we are all about, it is what made us what we are today, it is why we were number one.

We can't even wipe our own ass, but we must save the world??

Son of Captain Nemo's picture

I think you mean "control" the world and that's been the crux of our problem for the last 68 years.

Took Red Pill's picture

"The Land of the Free" or at least 18th place. Now that's American exceptionalism!

Gen. Keith Alexander's picture

You can post anonymously all you want; we still know who you are.

Son of Captain Nemo's picture

Yes indeed it does and our government's deafening silence will continue to hurt it even more every day.

What will fix it is when President "Barry" or his replacement including member(s) of Congress makes it's formal apologies to citizens and international partners to right the wrongs demanding measured steps to fix both the Constitution with the abolishment of the NDAA and new rules for FISA on internet protections that have yet to be written.

If and when this happens I also have a bridge to sell you in Brooklyn.


jumped_ship_and_swam's picture

Where I live, in Eastern Europe, they are setting up new cloud computing centers expressly to avoid traffic going through the US.  Moreover, they are avoiding Cisco and Microsoft to the extent possible, because they believe that the US government has compelled these companies to build backdoors into their software to allow spying.  It is a big threat to one of the US' most important remaining areas of technical superiority.

Sandmann's picture

Zuckerberg is a Publisher and hates privacy. Congressmen like privacy so don't publish their phone logs. The USA is supposed to be built on Law of Contract and it is a major Tort to reveal all contractual information to persons not party to the contract. The US Government thinks its Espionage Act 1917 is transcendent but then requires Citizens to be transparent

Mercury's picture

The Zuckerbergs of the world who want to prohibit pseudonymous and anonymous speech say that civil discourse is encouraged when the true identities of those discoursing are known to all. However, when it is the mob vs. the author of unpopular speech (regardless of moral or ethical content), the mob will win the ad hominem attack game every time especially when every last detail about a person’s private life is a mere click away (something the Zuckerbergs also champion).   


[sorry, can't un-bold the above for some reason]


williambanzai7's picture

I have looked at the report on many occasions in the past. I hate to say this but it really does not have much to do with personal liberty. The concept of economic freedom that they rank barely pays lip service to the concept of liberty by referring to the rule of law and judicial independence. It is primarily concerned with business liberty.

What rules of law do they refer to? Primarily those that protect the freedom of businesses and markets to operate with minimal constraints. As we have seen, this is a very flawed measure of personal liberty. This is blatantly obvious because Singapore and Hong Kong are next to each other at the top of the list. Singapore and Hong Kong are both closely economically competitive. But they are night and day when it comes to personal liberty. Even with the recent reforms, Singapore is still essentially a police state. Does anyone really believe that Singapore respects the electronic privacy of its chewing gumless citizens?

Moreover, to the corporate audience that pays attention to that report, one can argue that personal liberty is a negative attribute that is bad for business. No business interuptions caused by civil unrest in Singapore. And how has corporate America done in the US these past 10+ years?

In conclusion, I would say that that report is the wrong authority to cite as supportive of the premise of your post, i.e., that the lack of privacy protection and constitutionally protected personal liberties is bad for business.

I can no longer look upon business freedom and personal liberty as joined at the hip.

Nevertheless, in terms of private property rights, I see that the good ol' USA is right next to Cyprus where it belongs. Two countries happy to denude exalted personal property rights whenever expedient to protect the corrupt system: Where the ends will always ultimately justify the means.

Pardon my cynicism ;-)

DaveyJones's picture

well said william

checks and balances

freedom is relative, relative to everyone (and everything) else. The idea that someone should operate economically "unchecked" makes as much sense as someone criminally unchecked.

Notice the two worlds have joined 


Apostate2's picture

The greatist threat to our personal and very private selves is this 'public' (whatever that means) push by all these entities who wish to subvert, and monetise our individuality. It is the last bastion of what it is to be a free and unfettered member of the human race. At least for now, in Hong Kong, we have some protections against the unrelenting encroachment on our rights as individuals against the international/Mainland/local creep to erode our freedoms.

Not sure about the rest of the world. However, the software/internet folks are already developing progammes to find a way to connect without the Tower of Babel.

Sandmann's picture

Corporations are suits of armour worn by Individuals to do battle. Noone envisaged Courts giving Suits of Armour rights over the Individual

rex-lacrymarum's picture

I've discussed this very topic numerous times over the past few years on 

It is exactly correct, surveillance hampers the free flow of information as many people begin to watch what they say - and ultimately this has a corrosive effect on civlization itself. 

Common_Cents22's picture

anyone see info on John Macafees new proposed privacy device giving secure networks?

q99x2's picture

Intelligent people they know. I'm of the opinion that the shut down is intentional.

They, them globalists gots sumpthin in the works.

fourchan's picture

zuckerberg is an emotional retard and it shows in his creation. his broken soul and inner fear has created

a surrogate for life and a false reality only a bullied half person could love. to insulate you from reality, by exposing

everyone's dirty laundry like it or not. don't see what im saying, try to cancel your facebook, its impossible, to the extent

you have become a half person too.  

Son of Captain Nemo's picture

Just don't forget that like he and Eric Schmidt they had help from their patrons.

Inflating both the stock price and their egos.

Bear's picture

Obama and the Dems want a crash and burn and have every American feel the pain of what BHO said today is 'The Republican Shutdown'. If you notice those things that are just down are the services that most people use. He never mentioned that he said "I will never Negotiate ... with the Republicans"

Zero-risk bias's picture

I guess it’s natural process and a testament to time that those who persevere the most, and contribute the greatest achievements naturally lose their anonymity. Perhaps today we also have unseen opposing push/pull forces. So, who’s calling the shots is less clear to most.

Government could be identified as the problem, or identified with the problem, yet, to my mind, complicity is born out of all directions under the sun.  It's possible to see it in light of the fact that the civil liberties we have enjoyed over the century were born out of a fluke. Moreover, demographic change and mass psychology could be broadly attributed to the way civilizations have developed over time. The way the world operates today seems altogether illogical to myself and many more citizens of Earth, so how we got here is largely dependent on perspective. Chance and probability are both intrinsically linked with socio-economic change, yet that's not to say that 'we' are without collective consciousness and we could not dramatically alter the trajectory of change.

When looking for the culprit pulling the strings, I think it's best not to overlook the role of 'self' in the equation. Anonymity is not only fundemental to our private lives, but it is the source of how we prosper. Behavioral psychology and motivational force theories might agree. I wonder how many people could spell ‘anonymity’ correctly, let alone understand why it’s so important.

forwardho's picture

Great thoughts, The greatest force of change is "self" for by our own self directed actions we change the course of events. As far as the World being illogical "today" It has never been an ordered place. Humans live here, and are ruled by their own mass of conflicting impulses.

Zero-risk bias's picture

The equilibrium. Through employing chaos, anarchy creates more harmony.

Zero-risk bias's picture

I'm not well read on many of these subjects, so maybe what I wrote could seem ostentatious, it's just my attempt at creating clear communication.

"Humans live here, and are ruled by their own mass of conflicting impulses."

I see what your saying, by definition, chaos is vis-à-vis with order. Imposing order, creates chaos?

Randoom Thought's picture

One thing that bothers me and that did not click until a little while a go is in regards to the entire US (and world) patent system. People think that the reason the patent system was set up was so that people could protect their innovation from competition for a period of time.

NO! that is not the reason. The real reason is so that people would first share their inventions and creativity with the government so that the government could have first dibs on restricting any new technology, classifying it as secret and reserving it for their own use.

I know quite a few people who have had their inventions classified as secret and reserved for the government/military because they tried to file a patent. These people are not allowed to gain economic value from their own work in the commercial market, nor are they even allowed to talk about the technology for fear of imprisonment.

My advice is to think twice before you let the government know about your inventions.

Common_Cents22's picture

It's just like the chinese CCC.  Must give up all your IP before you can get your widgets mfg for cheap.

The Alarmist's picture

It was only by a fluke, the black plague, which made it possible for the surviving serfs to bid out their labour to the highest bidders, that we embarked on an 800 year experiment with increasing freedom and increasing wealth and well being for the mass of us.  That was clearly a mistake, and now, thanks to internationalism and technology, the mass of us are being returned to our rightful state as serfs.

Quit your bitching and get back to your plows, serfs.

Randoom Thought's picture

Ummm ... why not just overthrow the masters, put them to the plow and divide the land and wealth? (It is what the masters would do... good for goose. goood for gander.)

Oldrepublic's picture

The United States has plummeted to 18th place in the ranked list, trailing such countries as Estonia, Taiwan, and Qatar.

Qatar ?


You mean that police state in the Gulf?

The Alarmist's picture

You say Cutter, I say Ka-Tar, 

Let's call the whole thing off!


Seriously, the land of the Free is now 18th in freedom? Behind places like Estonia and Quatar?  This is really sad.

Widowmaker's picture

Since when does Fascism care about the economy, innovation, creativity, etc?

Fascists only care about Fascists.

Ckierst1's picture

Fascists care deeply about THEIR economic prosperity.  Fascism places a yoke of statist supervision on commerce; indeed, implicit in the corporate status is a government sanction.  Fascists are socialist elitists.  It is pretty much impossible for any socialist system of political economy to avoid having an elite, at least as applied!

Ckierst1's picture

Fascists care deeply about THEIR economic prosperity.  Fascism places a yoke of statist supervision on commerce; indeed, implicit in the corporate status is a government sanction.  Fascists are socialist elitists.  It is pretty much impossible for any socialist system of political economy to avoid having an elite, at least as applied!

Goldilocks's picture

Latin American Leaders Denounce US Intervention at UN (7:47)

Cthonic's picture

Yet at the same time Panama is meeting with U.S. authorities to work on implementing FATCA... so much for Panamanian private interest foundations.  For those who don't know, Panama is (or used to be) about the most private jurisdiction in the Americas.  Back in the day John Wayne even put his money down there. 

Common_Cents22's picture

Chile seems to be looking pretty good.   More conservative, self contained, some great weather.

0b1knob's picture

Wasn't there a scene in the movie "Blow" where a drug dealer put all his millions in Panamanian banks.   When the US overthrew Noriega they just confiscated it.

If Panama were ever a tax haven or a haven for privacy that ended LONG ago....

Cthonic's picture

I think the movie employed a bit of creative license; Panama did have a banking crisis brought upon by Noriega's intransigent stance towards the US after the rigged elections in the early 80's and Spadafora's subsequent torture and murder.  Panama defaulted on IMF loans and foreigners began pulling deposits at a time when Panama had severe ongoing trade deficits.  Local banks were told by The National Bank that it couldn't meet cash requests due to a freeze of funds in US based banks.  International banks closed for fear of bank runs and the price of sovereign debt tanked.  Anyway, can ask him next year (supposed to get out of prison then); in past interviews he's stated he used Scotia Bank (not The National Bank or BCCI).  Scotia Bank wouldn't surprise me; look up Capt'n John Dick for an example of the history of smuggling and rum running in PEI and Nova Scotia and one might begin to understand how a once obscure bank from the region was the first to expand outside Canada and the US, especially into the Caribbean, and now has an asset base approaching $800B.

Fezter's picture

When everything of consequence is either taxed, regulated, or illegal, one of the last dominoes is privacy. 

El's picture

Watch "The Grinding Down of America" and it will all make sense. Communists have taken over and many of the leftist tools don't even realize they are supporting the Communist agenda.

doctor10's picture

The USA is closed for business. And until the three letter alphabet agencies are shut down or caged behind the 4rth Amendment, it will remain so.

 Once that happens, there remains a problem with predatory taxation and regulation. Those obstacles are readily amenable to legislative/policy solutions.  However legislative freedom and natural law freedoms are hostage to those agencies at this point in time.

falak pema's picture

Oligarchy means dominant position in dark pools of mayhem and OTC rehypoth like a Don Corleone; it means Warren B makes 2 billion by piggy backing the scam gang of Squid, by bailing them out after meltdown and taking your margin once they are reinstated by QE infinity bail outs. Well played Oligarch with an inside track. As Manckiewicz said : going from 100 million to 110 was inevitable ! In the barefoot Contessa! Awesome premonition of today's age!

0b1knob's picture

Initially the govenment controls the spy agencies.   After a short time the spy agencies start to control the government.   It always happens that way.   When the Soviet government and economy collapsed the KGB changed its name but continued on and put its own man (Putin) in charge.

The starship enterprise bridge built by the NSA indicates the subconscious freudian concept of their role.   They are totally in charge and always will be.  The Beast has arrived....

Manthong's picture

“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”

Federalist 51

rustymason's picture

The ecomoni, the ecomoni. Screw that. Surveillance destroys privacy and therefore destroys life, or at least the things worth living for. Real life happens in the private spaces.

Everyman's picture

EXACTLY!  When LIBERTY is threatened, THAT is the evil AND the emeny.