Media Dojo

Ask people in the abstract whether they want more choices,the answer is typically a resounding yes. However, look at how most choices are presented in real time and most people end up deciding between black or white, good or bad, open or closed, Democrat or Republican, whether they’ll have the chicken or the fish.

Digital privacy policy is often set up in a similar vein. You either have it (privacy) or not.

Binary choices can be useful for setting up the infrastructure for competing views to join in battle. The contestants line up in their respective colors. They go to various media outlets as either the home team or the visitors. There are lusty cheers or jeers greeting their positions, and we’re told that through this kabuki the winning view of truth will emerge.

But a funny thing happened on the way to Capitol Hill with digital privacy. Try as we might, it’s been almost impossible to set it up as a simple choice.

When I first applied to the Knight Foundation fellowship, I naively thought finally, I’ll understand digital privacy once and for all. That was laziness on my part. But, hey, imagine if it actually panned out. I’d have been a pretty smart duck.

The closer truth is that after hearing some very talented and passionate speakers along with sharp questions from 23 journalists, I’m believing there won’t be a definitive ceremony marking either the end of privacy or the complete securing of our privacy rights as they apply to the digital space.

More likely, we’re in for years of ebb and flow of digital privacy issues on the policy radar screen. Digital privacy can’t be solved as a specific problem. More likely, it’ll be managed as an ongoing issue with flare ups and periods of quiescence. I believe this isn’t simply because we haven’t sorted through the batting order of privacy contestants. More close in my opinion is the reality that you can’t separate the practical debate (how we do it) from the philosophical debate (what are we protecting) from the political debate (who decides it).  It’s three level chess.

We’re building an economy in which demographic and activity data is becoming the dominant form of capital. By dominant, I mean that it leads the dance for other forms of capital. In the 18th century the valuable thing to own was land. I could use my title to land to take out a loan to purchase something else. In the 19th century it was about owning machinery. In the 20th century, I’d say it was about owning formal intellectual property although I freely admit I’m agnostic whether that was the definitive form.

2009 is a bit more clear to me. With real or de facto ownership of personally identifiable information combined with analysis of a stream of activities, I’ve got a pretty good idea of a person’s economic impact and potential future value. If I can encapsulate that knowledge into some digital artifact I can transfer to someone else (e.g. a customer record, search history, ticked preference boxes) then that’s property. I can use such property to organize other forms of capital such as financial, technical, human and so forth.

Twelve years ago, I gave a talk at Harvard’s JFK school about the political economy of the Internet. It was 1997 and everyone had policy theories.  At the time, I tried to fit Internet policy debate in the context of property rights as I understood them from grad school.

“…the new reality is that the creation of wealth and power is shifting toward applying intellect, technology, and economies of scope to the problem of production and exchange as opposed to energy, labor, and economies of scale. No longer is the individual firm the fundamental economic unit but networks of firms where the integration of knowledge is superceding the division of labor to define an economic system.

Is this the new economy as trumpeted by the media? Perhaps it is, though the data is very incomplete at this point. But one thing is clear. We are witnessing the early days of a struggle between intellectual property and classic financial markets to define capitalism’s center of gravity. We can expect a wild ride for the next few years as Wall Street tries to value intangible digital assets with intangible digital securities. They’ll eventually get the trick right but history suggests that more fortunes will be lost than made before the dust settles and we have a new set of values.

Moreover, it is apparent that the Internet is playing a critical role in this struggle because it is becoming the main institution for circulating and adding value to intellectual assets or claims on those assets in the same fashion that the banking system circulates financial asset and claims upon them. This is changing the way that credit is created, bought and sold and therefore, the way in which the use of capital is determined, and how people are organized for work.

And those individuals who internalize this distinction and improve upon the process will control significant wealth and power in the 21st century.”

Well, it’s the 21st century and I was wrong about a major part of that analysis. I thought that intellectual assets meant intellectual property (e.g. patents, copyright, trade secrets, trademarks, brands and logos). What’s happened instead is that mindshare, usage, registrations, searches, in other words information about people has emerged as the most important asset for a new economy.

Digital privacy policy can’t be restricted to economics, politics, law, culture or technology. It’s all of that because we the people, you and I the individuals, are the primary assets in play for a new form of capitalism. In that sense, I wouldn’t be surprised in my lifetime if we end up amending the US Constitution to accomodate the new realities.

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