5 Ways Mass Surveillance Is Destroying Our Economy

George Washington's picture

Screwed by Anthony Freda

Art by Anthony Freda

Privacy is a prerequisite for a prosperous economy. Even the White House admits:

People must have confidence that data will travel to its destination without disruption. Assuring the free flow of information, the security and privacy of data, and the integrity of the interconnected networks themselves are all essential to American and global economic prosperity, security, and the promotion of universal rights.

Below, we discuss five ways that mass surveillance hurts our economy.

1. Foreigners Stop Buying American

Foreigners are starting to shy away from U.S. Internet companies, due to the risk that American spooks will spy on them.

American tech companies – including Verizon, Cisco, IBM and others – are getting hammered for cooperating with the NSA and failing to protect privacy. The costs to the U.S. economy have been estimated to be in the hundreds of billions of dollars. And see this and this.

That doesn’t even take into account the just-revealed NSA program of infecting virtually all popular Western hard drives with spyware.  This will cause huge markets like China to insist that locally-produced hard drives be used, to make it harder for the NSA to hack into them.

So the NSA’s shenanigans are hurting dual pillars of the U.S. tech sector: computers and Internet.   (The sale of mobile devices might not be far behind.)

2. Trust and the Rule of Law – Two Main determinants of Prosperity – Are Undermined By Surveillance

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.

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). If people don’t trust the companies to keep their data private, they’ll use foreign companies.

And destruction of trust in government and other institutions is destroying our economy.

A top cyber security consultant points out:

If privacy is not protected while performing mass surveillance for national security purposes, then the people’s level of trust in the government decreases.

We noted in 2012:

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. Indeed, 5,000 years of history shows that mass surveillance is always carried out to crush dissent. In other words, mass surveillance is the opposite of the principle of the rule of law (in distinction to the rule of men) upon which America was founded.

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.

3. The Free Flow of Information Requires Privacy

Moreover, surveillance hampers the free flow of information as many people begin to watch what they say. The free flow of information is a core requisite for a fast-moving economy … especially an information economy, as opposed to economies focused on resource-extraction or manufacturing.

As quoted above, the White House states:

Assuring the free flow of information [is] essential to American and global economic prosperity, security, and the promotion of universal rights.

Mass surveillance makes people more reluctant to share information … and thus hurts the economy.

4. Mass Surveillance Hurts Productivity

Top computer and internet experts say that NSA spying breaks the functionality of our computers and of the Internet. It reduces functionality and reduces security by – for example – creating backdoors that malicious hackers can get through.

Remember, American and British spy agencies have intentionally weakened security for many decades. And it’s getting worse and worse. For example, they plan to use automated programs to infect millions of computers.

How much time and productivity have we lost in battling viruses let in because of the spies tinkering? How much have we lost because “their” computer programs conflict with “our” programs?

Microsoft’s general counsel labels government snooping an “advanced persistent threat,” a term generally used to describe teams of hackers that coordinate cyberattacks for foreign governments. It is well-known among IT and security professionals that hacking decreases employee productivity. While they’re usually referring to hacking by private parties, the same is likely true for hacking by government agencies, as well.

And the spy agencies are already collecting millions of webcam images from our computers. THAT’S got to tie up our system resources … so we can’t get our work done as fast.

Moreover, the Snowden documents show that the American and British spy agencies launched attacks to disrupt the computer networks of “hacktivists” and others they don’t like, and tracked supporters of groups such as Wikileaks.

Given that the spy agencies are spying on everyone, capturing millions of screenshots, intercepting laptop shipments, creating fake versions of popular websites to inject malware on people’s computers, launching offensive cyber-warfare operations against folks they don’t like, and that they may view journalism, government criticism or even thinking for one’s self as terrorism – and tend to re-label “dissidents” as “terrorists” – it’s not unreasonable to assume that all of us are being adversely effected to one degree or another by spy agency operations.

Bill Binney – the high-level NSA executive who created the agency’s mass surveillance program for digital information, a 32-year NSA veteran widely regarded as a “legend” within the agency, the senior technical director within the agency, who managed thousands of NSA employees – tells Washington’s Blog:

The other costs involve weakening systems (operating systems/firewalls/encryption). When they do that, this weakens the systems for all to find. Hackers around the world as well as governments too.


These costs are hard to count. For example, we hear of hackers getting customer data over and over again. Is that because of what our government has done?


Or, how about all the attacks on systems in government? Are these because of weakened systems?

5. Creativity – A Prime Driver of Prosperity – Requires Privacy

The Information and Privacy Commissioner of Ontario, Canada – Ann Cavoukian, Ph.D. – noted recently:

Privacy is Essential to … Prosperity and Well-Being


Innovation, creativity and the resultant prosperity of a society requires freedom;


Privacy is the essence of freedom: Without privacy, individual human rights, property rights and civil liberties – the conceptual engines of innovation and creativity, could not exist in a meaningful manner;


Surveillance is the antithesis of privacy: A negative consequence of surveillance is the usurpation of a person’s limited cognitive bandwidth, away from innovation and creativity.

The Financial Post reported last year: “Big Brother culture will have adverse effect on creativity, productivity“.

Christopher Lingle – visiting professor of economics at ESEADE, Universidad Francisco Marroquín – agrees that creativity is a key to economic prosperity.

Edward Snowden points out:

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.

Silicon Valley is currently one of the largest drivers of the U.S. economy. Do you think Bill Gates and Steve Jobs could have tinkered so creatively in their garages if the government had been watching everything they do?

Everyone who has every done anything creative knows that you need a little privacy to try different things before you’re ready to go public with it. If your bench model, rough sketch or initial melody is being dissected in real time by an intrusive audience … you’re not going to be very creative.  And see this.

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sam site's picture


You say, "The destruction of privacy by the NSA directly harms internet companies, Silicon Valley, California … and the entire U.S. economy ..... If people don’t trust the companies to keep their data private, they’ll use foreign companies."

What if they use foreign currency and credit cards and avoid VISA and Paypal instead of anything dollar based that's susceptable to NSA spying. 

Spying and even the fraud of massive counterfeiting of dollars by our criminal Fed rulers produces bad karma that builds up a resentment and urge to avoid entirely.

It's not just the anger over the spying.  As 599 Fiat Paper Currencies throughout history have dissolved through a lack of confidence generated from a suspicion that it was being fraudulently debased and made worthless through money-printing. 

The world is running from the dollar for more reasons than just being mad about being spied on. 

Naive Americans are going to pay a heavy price for not recognizing and removing the private cabal Fed criminal parasite from managing their economy.

According to economist Jim Willie, 130 countries agreed last year to a Global Currency Reset Agreement that called for gold and silver prices to double and triple respectively. 

The US later reneged on this agreement as many suspect most TBTF Western banks would fail.  The US then started up the Ukraine War. 

The MSM did'nt mention this betrayal by the US and it is now regarded as a runaway rogue nation by many countries.  

Russia will have it's own SWIFT Trade Payment System in May 2015. 

Then the Asian Trade Zone can re-initiate the Global Currency Reset with gold-backed money and Americans are then going to discover that the Fed stole

America's gold in the 90s (just as it did in the 30s causing the Depression and funding Hitler – see Rep Louis McFadden  http://www.afn.org/~govern/mcfadden.htm). 

Useless pretty paper like the Yen, Dollar and Euro will no longer be acceptable in global trade.  This reset will be the 600, 601 and 602nd time in history a paper Fiat currency will fail. 

There are going to be many delude victims of their own Normalcy Bias among the sheeple who are going to be caught flat-footed and broke.  Most American's have no idea of the criminality of our foreign hidden rulers. 

Only gold and silver currency will be acceptable as genuine global trade "hard" money.  They may imbed gold or silver in the paper rubles and yuan themselves.  Deluded, toxically-injured and handicapped Americans aren't going to know what hit them.



Reaper's picture

When improper thoughts expressed are prosecuted, one protects by not thinking. The great fallacy is to trust that the government or its hacks would not plant false incriminations. Most new ideas threaten some established system. Privacy allows one to consider, obtain outside information and think.
Government watches you for its good and your control.

BlussMann's picture

We stopped flying to tourist spots and drive now - no TSA punks to deal with when you drive.

BendGuyhere's picture

Case study: recent carnage in IBM earnings/share price:

1) Snowden blowback-gee it seems Brazil, Russia, India and China were Big blue's fastest growing markets. And I thought the USSA govt. was a pure facsist corporatocracy

2) New CEO is incompetent AND has a vagina. Yes I know this is inconceivable as female CEO's are the new master race (a la Carly Fiorina)

3) Share buybacks-the biggest waste of capital EVER, short-sighted attempt by executive mafiosi to boost quarterly returns for the benefit of their already bloated compensation.

CH1's picture

Good article, good comments, but Joe Average doesn't give a damn.

More free shit!

Element's picture

Privacy is also a biological need, as was pointed out by John B. Calhoun's experiments on rodents. He found that without sufficient privacy and ordered unimpinged territories of their own, within their society, 100% of the population died out, after a horrific series of events that ensued. When they had sufficient privacy they tended to survive with little if any dysfunction.

xavi1951's picture

This reminds me of the old Burke series, CONNECTIONS.  How the saddle stirup led to the atomic bomb.  It's all interconnected because this resulted in that and that resulted in...

Good connections GW.

Old_Dog's picture

That was one of my favorites, still have my home made VHS collections stashed away somewhere.....but now it is available, it and it's sister series "The Day the Universe Changed".  I liked the original more.






Neither of you two 'old timers' and apparently not Amazon either mention James Burke's 1989 After The Warming. Presented in the same JB style but from the year 2050. Predates An Inconvenient Truth by 15 years. Yet every day in the comments section here the same basic arguments presented by Burke are repeated over and over let alone the Al Gore trash that deflects and polarizes the important discussion that is going on in the run-up to Paris.

After The Warming is a slick production. Who funded it? Who is Mike Slee? Did Burke ever discuss ATW later?

I expect 25 years from now we will have a handle on the deep ocean reaction...

rwe2late's picture

 RE: point 5

privacy, prosperity, and "well-being"

"Privacy" is a word or concept that can be over-generalized and mis-applied.

The marketplace requires rules, regulation.

The government is obliged and tasked by society to regulate the marketplace.

Businesses and corporations are chartered to operate in the marketplace and serve public purpose.

The "privacy" rights of businesses in the marketplace are not as absolute as for individuals in their home.

Reporting the ingredients or contents of food sold is not an absolute privacy issue.

Nor is revealing the adverse or potentially risky effects of various products, tobacco, glyphosate, vaccines, etc.

Creepy A. Cracker's picture

"The government is obliged and tasked by society to regulate the marketplace."

No they are not, and should not, regulate the marketplace.  Maybe one or two rare exceptions but then the door is opened to the nightmare of regulation that we currently have.  I am capable of thinking.  Therefore I don't need an entitled moron sitting at a government desk telling me what I should and should not buy/use/watch/eat/say/learn/etc.

rwe2late's picture

creepy cracker

 It would appear that you and some others are unfamiliar with unfettered businesses and the problems of food and drink at the beginning of the 20th century (and continuing now).

Your apparent willingness to have movie theatres and other public places unregulated for fire and other safety concerns also is naive.

This is to say nothing about unregulated financials, building construction, polluters, etc.

Do not conflate the captured regulatory agencies and faults of our present government with the basic need for regulation.

Creepy A. Cracker's picture

"Your apparent willingness to have movie theatres and other public places unregulated for fire and other safety concerns also is naive."

That's a silly "argument" at best.  I start with the assumption that people have minds and are capable of thinking.  They will step up and pay attention to things like their own personal safety if they are given the chance.  To treat human beings as pets, incapable of looking out for themselves is dehumanizing to say the least. Allow people to think.  They will then regulate themselves.

Creepy A. Cracker's picture

After the FedEx truck ran into my garage door, bending it, and driving through my front lawn (multiple times - FedEx and UPS) I now surveil my property and driveway with a 24/7 HD digital video recorder.  Initially I was against it due to the creepy factor, recording anything and everything that takes place, but it's comforting being able to play the video of the FedEx/UPS truck damaging my property in high definition to submit to UPS/FedEx for the damage claim.

I should be able/allowed to monitor my property.  Big Brother should not.

Hannibal's picture
Ukrainian soldier boasts about shooting civilians on his Facebook page


p00k1e's picture

Are you posters trying to create a regime?   What needs to be hidden from the open light of the civilized world? 

Gaius Frakkin' Baltar's picture

I'll consider your point when uncle satan (who has more secrets than any institution or person) opens up completely.

doctor10's picture

Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.

Ayn Rand

ersatz007's picture

p00k1e - so then i guess you won't mind publicly posting the usernames & passwords of your email accounts so that nothing you're doing is 'hidden from the open light of the civilized world'?

Creepy A. Cracker's picture

That's the same question that the Stasi (look it up) asked the people enslaved in the communist utopia of East Germany.  "Why do you have a problem with us bugging your bathroom?  Do you have something to HIDE?..."

rwe2late's picture


 The answers to both your questions

(what "regime" is being created, and why privacy is needed) are given in the article.

If you actually wish to intelligently comment about points made in the article, do so.

doctor10's picture

 Bankers getting desperate? Their biggest revenue streams have always been national wars.

The central bankers are finally starting to realize that modern lateral network communications prevent  historically successful false flag operations. Consequently war is becoming harder to foment and maintain.

Means they're gonna need to loosen the shackles on the populace to allow real development and commerce so they might get paid. Those shackles have all been appplied for various  "national security reasons".  And as this article points out-for a variety of reasons, those shackles all shut down commerce.

The MIC is gonna have to get over it?


FreeNewEnergy's picture

I'm not sure I should comment here, so... oh, crap!

Supernova Born's picture

Computer surveillance tech is the only tech that matters.

Any other technological, industrial, medical, etc. creativity can and will be simply stolen by superior computer surveillance technology.


ersatz007's picture

And soon that "superior computer surveillance technology" will be 'Skynet' or whatever it decides to call itself once these morons unwittingly unleash ASI

Paveway IV's picture

I'm plenty pissed about the U.S. government spying on it's citizens, but I'm outraged that ISRAELI intelligence has unfettered access to the U.S. phone and internet surveilance equipment. They can use that information however they want with little chance of being caught or actually prosecuted for it. 

The Israeli mafia came to 'own' the cocaine business in Los Angeles and Las Vegas in the late 90's mostly because they were being supplied with inside information on drug busts. The Israeli surveilance company that the DEA was using was also monitoring police home phone numbers and beepers. They would find out when the 'competition' in cocaine trafficking was going to get busted and move into that territory. They also avoided getting busted themselves by the same method. All it cost them was a handful of cash to a few Israeli citizens transcribing the phone calls and monitoring the equipment. When the FBI found out about this, they could do nothing. Nobody could prove anything, any investigation directed at Israeli citizens would have been a career-ender for a politician and any mention of the Israeli mafia operations were immediately branded anti-Semitism.

I'm not so worried about cocaine trafficking as I am about, say, inside information used for security trading or to swing business deals. Even more troubling is domestic spying courtesy of the DHS. The DHS was pushed for and created at the urging of many Israeli-firster congressmen. It was initially headed by a Jewish guy and stuffed with Jewish directors well out of proportion to the population. Millions of contracts went to Israeli-connected security firms, and millions of grants went disproportionally to Jewish organizations. Everything from the TSA to port security is over-represented by jewish firms. In fact, Verint - one of the companies involved in the Israeli Mafia fiasco at the DEA - is now in charge of port security in Texas. 

I don't trust the U.S. government to respect my rights, and I damn sure don't trust the Israeli government either. Israeli private corporations? Hell, they're beyond the bottom of the list. They shouldn't even be allowed to do business in the U.S.