February 28, 2012

Keeping oneself informed about Europe by reading the British press is like enduring perpetual mortification. Yet misery may beget valuable insights. For instance, Philip Stephens' comments merit commendation (*).

Focusing on European solidarity, he first reminds us this concept is foreign to "Anglo-Saxon minds". No wonder that his newspaper ran a series on "Capitalism in crisis", an issue which I rather see as a crisis in social solidarity, the other force behind society's economic engine.

There is much to be said for looking at solidarity within Europe. Within a given country, there are just too many citizens. At the level of the current European Union, this laboratory of world governance, there are at most thirty something actors. In this simplified context, Philip Stephens makes three points. Solidarity "at root [is] about self-interest". Solidarity can be circumscribed or pervasive. Solidarity requires trust.

With his first remark, he accounts for the fact society is mostly made of sinners. In contrasting insurance contracts and "unprecedented pooling of sovereignty", he stresses that the latter derives more from "enlightened" conviction than strict computation. He should make clear that lack of trust between the parties involved undermines the result of the most careful computation as well as of the boldest conviction (1). Trust is always capital.

"Behind name-calling that marks out Greece's relationship with its eurozone partners lies a complete breakdown of trust". Zoom back on a single country and notice how the lessons carry over. Tony Barber sees "the slow uncoiling of malignant forms of mistrust in Greek society" itself, in "the relationship between [...] political classes and voters", towards "public institutions" and "between different [...] social and occupational groups" (**).

A naive observer would wonder how one could waste this remarkable asset which stands behind so called social capital. Read Gillian Tett and get a grip (***). "American states are using assumptions that look more outdated by the day" when it comes to funding their employees' pension plans. "Politicians [do not] want to draw voter's attention to the issue, in an election year". "Nevertheless, the problem cannot be ducked indefinitely".

Trust dissipates whenever bad news threaten, the intended receiver is known to be unforgiving and the messenger has the choice of keeping quiet.

What then should we make of the Consumer Privacy Bill of Rights signed last week by US President Obama (2)?

"Trust is essential to maintaining the social and economic benefits that networked technologies bring to the United States and the rest of the world". "Privacy protections are critical to maintaining consumer trust in networked technologies".

On the face of it and in keeping with the spirit of my fillips, President Obama fully understands the economic role of eprivacy. Yet there is a way to keep quiet about bad news by distracting people with an overabundance of good words. Politicians everywhere, whether newly elected or lame, duck more than they dare, in the not so unreasonable hope of pushing the day of reckoning onto their successors. Après moi, le Déluge.

The first telltale sign is President Obama's admission eprivacy is mainly a legislative issue. "Enacting the Consumer Privacy Bill of Rights through Federal legislation would increase legal certainty". Perhaps this tautology reflects the normal way in which the US constitution is designed to work, the President leading Congress by lending his singular voice to a popular cause. You wish!

The problem with this charitable interpretation is that the advice given is so ambiguous as to lead in the opposite direction to its advertised intent.

It starts well enough, stating "consumers have a right to exercise control over what personal data companies collect". Standing alone, this phrase would have been in keeping with the original Bill of Rights (3), concise, precise, forceful. Unfortunately it then proceeds to go downhill from there.

The first qualifier immediately limits the personal data placed under consumer control to what is collected "from" consumers. But most personal data held and used by companies "about" consumers is not acquired "from" them but from third parties.

Follow an amplification, presumably to flesh out how one would wish to exercise control. Each item is reasonable enough. But, for instance, do consumers need to be told they want "access and accuracy"? Isn't the real purpose of this pseudo consumer right to let companies escape from their obligations by adopting "a manner which is appropriate"? Who's in control then? Not the consumer, but whoever determines what is appropriate.

Perhaps I am too harsh. Isn't it the role of the executive branch of the government to promote "appropriate" standards of control? Imagine the state of US commerce if the length of the foot depended on each and every US citizen's feet! And isn't it eminently practical for an administration to avail itself of "well-structured multistakeholder consultations" to draw these rules? Who would specify air traffic safety rules without input from airlines?

I admit that however dissatisfied one may be with President Obama for not going far enough, every one of these forty-eight pages is filled with good words. Still why call for rules in the stated intent to "promote innovation and protect consumers"? Isn't the sole focus of a Bill of Rights to protect citizens? Would anyone dare write that air safety rules must also promote innovation, not just ensure the welfare of passengers?

Truth to be told, this is not a Consumer Bill of Rights. It is a smooth attempt to hide some very bad news. Because citizens' expectations of privacy endanger some technologies, the rights of the rogues who profit from them must be protected lest they lose the benefits of free plunder.

I am not alone in this sober assessment of solidarity in crisis. Quoted by Tanzina Vega, "Jeffrey Chester, the head of the Center for Digital Democracy [...] called the move a win for the advertising lobby" (****).

It is simply too difficult to trust the US government to promote eprivacy effectively against the self-interest of those who underwrite US elections.

Philippe Coueignoux

• (*) ........... Europe says good bye to solidarity, by Philip Stephens (Financial Times) - Feb 24, 2012
• (**) ......... Malignant mistrust threatens to be the death of Greece, by Tony Barber (Financial Times) - Feb 18, 2012
• (***) ....... Pension gap spells trouble for muni bondholders, by Gillian Tett (Financial Times) - Feb 24, 2012
• (****) ..... Opt-Out Provision Would Halt Some, but Not All, Web Tracking, by Tanzina Vega (New York Times) - Feb 27, 2012
• (1) for instance an insurance contract implies one trusts the insurer to pay all legitimate claims
• (2) see the Consumer Privacy Bill of Rights (White House) - Feb 22, 2012
• (3) see the US Bill of Rights in the wikipedia