August 23, 2011

"Rousseau was an early and incisive critic of the idea that self-interested behavior would necessarily work to the benefit of all" (*). Indeed without the rule of the law, capitalism is soon reduced to a creed as hollow as it is held hallowed by the rent-seekers wanting to justify their unlimited greed.

John Kay's reference reminds us how much we need a new social contract, which alone could ensure right rises above might. Yet how can such a contract be adopted today when social solidarity itself seems such a stifling waste to so many? John Kay for one does not sound overly optimistic when he leaves us to reflect "how much economic and social values have been eroded".

"This rejection of the past [...] meant the abrogation of paternalistic legislation for the protection of the poor, the adoption of the free trade advocated by the English Adam Smith, and hostility towards the Catholic Church", wrote Rafael Tarrago to describe the political climate in the newly independent successors to the Spanish Empire in America (1). Might the United States read its future in the tortured past of Latin America?

Unlimited greed is not the privilege of the rich. The child of opportunity, piracy beckons to all. I am wont to make a parallel between stealing private confidential information and digitally published content. John Kay puts UK rioters on par with UK bankers. They differ in their fates, not their morals. Prison "for people found guilty of stealing bottles of water", per John F. Burns (**), a pension for Sir Fred Goodwin's thrashing a big bank.

Few would deny that it is easier to work when one is young and pay taxes when one is rich. Fewer alas know how to make it happen, even though it would go a long way to retune the two stroke engine of society, which fires on individual greed and social solidarity. The issue is that to impose social solidarity by force alone is an oxymoron, another example of the use of abusive clauses (2) like bundling as practiced by privacy pirates.

The best way would be to remind modern man of morality, a task I find to be beyond both my scope and my strength. But it is no reason to neglect teaching what can induce self-interest to enlighten its judgments and better its behavior. Indeed one goal of these fillips is to point out how much can governments' security imperatives, advertisers' economic interests and citizens' social impulses be satisfied without violating anyone's privacy.

Erica Goode for instance highlights "an unusual experiment by the Santa Cruz Police Department in predictive policy - deploying officers in places where crimes are likely to occur in the future" (***). Certainly the computer program behind this initiative makes mistake. But the cost of sending police officers to find no crime is born by the police deparment itself. Compare this self-correcting mechanism to what happens with profiling.

"[This] is in some way a natural outgrowth of the technology that companies like Walmart now use routinely to predict the buying habits of customers". "Scott Dickson, a crime analyst for the police department in Killeen, Tex., [noted] law enforcement agencies [...] have "great warehouses of data" that can be used to feed predictive programs".

One may be sceptical on what Walmart stores in its data warehouses and suspect it pays no more attention to its customers' privacy than Amazon. But personalizing one's offer to each and every customer is one thing, adjusting it for a whole store is another. For the latter purpose, there is little benefit in tracking individual customers' purchases. One has enough data tracking individual SKU's sales (3) or, to be on the safe side, the correlation between sales of multiple SKU's, information which legitimately belongs to Walmart.

Similarly compiling crime by nature, time and location infringes on no one's privacy. Besides, in voluntarily breaking the law, one hereby accepts the police's right to record one's personal failing for future reference. How else can society enforce the social contract against habitual offenders?

In fact the legal recognition of one's data rights might be an opportunity to clarify many property claims endangered today by the tyranny of the freedom of speech. "An English court has jailed two men for four years for inciting riots on Facebook", write Elizabeth Rigby and Kiran Stacey (****). One can imagine how such a sentence would have been received in the US.

As a grocery owns its sales data but not its customers' purchase data, one is free to air one's opinions, however disreputable, yet responsible for one's acts. By "giv[ing] dates, times and locations where they were calling for violence", the felons had turned the social site into an operational tool. And even though Facebook is not always blameless, in the instance, it was as innocent as a butcher's knife taken as evidence of some street crime.

Joseph Menn gives another example of libertarian fundamentalism (*****). "Civil liberties groups have attacked a decision by a [...] railway authority to knock out mobile telephone services [...] before a planned protest". "A shameless attack on free speech", the Electronic Frontier Foundation called it. It should rather focus on promoting practical privacy.

Free speech forbids companies which serve the public to selectively oppress opinions. But once they have discharged their primary mission, even publicly financed organizations should have the freedom to pick what services to offer and when. BART knew that real time mobile communications are an essential tool to coordinate urban disturbances and was only prudent when it temporarily cut off cell phone reception on part of its subway network. Condemning such actions as censorship when practiced by certain countries is no more than a biased expression of national self-interest.

Meanwhile Kate Murphy has documented how in the name of Freedom of Information, "the District Court of Columbia [...] allowed the release of [flight plans whose pilots had requested confidentiality] to the nonprofit investigative news organization ProPublica" (******).

This obvious violation of privacy rights is troubling. Not only the Federal Aviation Administration gave away what it did not owned but, to steer away from the type of selectivity struck out by Freedom of Speech, it will now be compelled to accept such requests from all newspapers. With private data in public hands there to be had legally, why Rupert Murdoch did not think of relocating the News of the World to the United States?

Unlimited greed seeks rents whose costs are borne by others. Social solidarity is to shift those costs to the true beneficiaries. For the rule of the law to be sustainable, the law of the rule must be to ensure its beneficiaries are the ones bearing its costs.

To renew the social contract, who will account for the benefits of social harmony and show how its costs can be paid by its beneficiaries?

Philippe Coueignoux

• (*) ........... Why the rioters should read Rousseau, by John Kay (Financial Times) - Aug 17, 2011
• (**) ......... Britain Debates a Plan To Turn to U.S. 'Supercop', by John F. Burns (New York Times) - Aug 15, 2011
• (***) ....... Sending the Police Before There's a Crime, by Erica Goode (New York Times) - Aug 16, 2011
• (****) ..... Two jailed over UK riots, by Elizabeth Rigby and Kiran Stacey (Financial Times) - Aug 17, 2011
• (*****) ... US anger at mobile phone cut to block protest, by Joseph Menn (Financial Times) - Aug 15, 2011
• (******) . Losing Privacy in Route Plans, by Kate Murphy (New York Times) - Aug 16, 2011
• (1) The Pageant of Ibero-American Civilization, by Rafael E. Tarrago, (University Press of America) - 1995
• (2) for a more in depth analysis of the use of abusive clauses in unequitable contracts, see my comments to the Department of Commerce, Jan 2011.
• (3) for more details about stock-keeping units (SKU's), see the wikipedia