Posner on Privacy

Recent controversy over the digitizing of medical records has brought to the fore the issue of balancing privacy against other values. Digitizing medical records would help doctors and patients by making it much easier, swifter, and cheaper to transfer these records when a patient switches doctors or is treated by a new doctor in an emergency or needs to consult a specialist. But once records are digitized rather than existing solely in hard copies in the office of the patient’s primary physician, the risk that unauthorized persons will gain access to them is increased. So, as often in law and public policy, a balancing of imponderables is required. My own view is that we tend to place somewhat too much weight on privacy. The word “privacy” has strongly positive connotations (like “freedom”), which obscures analysis. All that privacy means in the information context (for I am not talking about the Supreme Court’s usage of “right of privacy” to describe the right to an abortion and other sex-related rights—the Court appropriated the word “privacy” to describe these rights presumably because of its positive connotations) is that people want to control what is known about them by other people. They want to conceal facts about themselves that are embarrassing or discreditable. The two motives should be distinguished. In many cultures, including our own, there is a nudity taboo (oddly, it is much weaker in northern European nations); except for commercial purposes (prostitution, striptease, pornography, etc.), and the tiny band of nudists, people are embarrassed to be seen naked by strangers. Why this is so is unclear; but it is a brute fact about the preferences of most people in our society, and since transaction costs are low, it makes sense to assign the property right, in this instance at least, to the individual whose privacy is sought to be invaded. There is no dearth of persons willing to sell the right to see them performing or otherwise appearing in the nude, so there is a well-functioning market without need to coerce anyone to so appear. The second motive for privacy, however—the desire to conceal discreditable facts—is more questionable from a social standpoint. In order to make advantageous transactions, both personal (such as dating or marriage or being named in a relative’s will) and commercial, people try to “put their best foot forward.” Often this involves concealing information that would cause potential transacting partners to refuse to transact with them or to demand better terms as a condition of doing so. Such concealment is a species of fraud. It is too prevalent and, on the whole, insufficiently harmful to require legal sanctions (other than in exceptional cases). In addition the potential, victims of such fraud can usually protect themselves (though not costlessly): for example, lengthy courtships are a way in which potential spouses verify the implicit and explicit representations of each other and thus unmask the frauds that are a common feature of romantic entanglements. Moreover, to require blanket disclosure of private facts, thus treating every individual as if he were the issuer of a securities prospectus regulated by the SEC, would drown society in trivial and distracting information. It does not follow that the law should go out of its way, as it were, to enable, to protect, these (minor) frauds by granting expansive legally enforceable rights of information privacy. Medical records are a case in point. People conceal their medical conditions (sometimes as a means of concealing behaviors that have led to medical conditions), in order to obtain insurance at favorable rates, obtain and retain jobs, obtain spouses, becomes President (in the case of John F. Kennedy, who concealed his long array of serious illnesses), and so forth. These concealments can impose significant costs on the other parties to the transactions. This is not to say that all such concealments are strategic. I believe that many people would be uncomfortable to learn that their medical history had been disclosed to people living in distant countries, people with whom the possessor of the medical history will never transact. This would be like the nudity taboo: concealment motivated by embarrassment rather than by transactional objectives. I mentioned that in exceptional cases in which people try to keep information about themselves private the law does step in. No one wants privacy more than criminals! Yet searches, wiretapping, and other means of surveillance are authorized to invade the “privacy” of criminals, terrorists, and other antisocial persons. Because of its favorable connotations, the word “privacy” is rarely used in such contexts. It would be good if the word was either purged of those connotations, or, more realistically, was understood, in disputes over measures such as digitizing medical records that compromise “privacy,” that was what stake was simply reducing somewhat the ability of people to manipulate other people’s opinion of them by selective disclosure and concealment of information. Even strategic secrecy, however, can have positive social value. An example is trade secrecy, which is a method of obtaining protection against copying that would prevent appropriating the benefits of an innovation. In addition, some, perhaps a high, degree of privacy of communications is socially beneficial (hence wiretapping and other forms of eavesdropping are lawful only when directed against criminal and other public enemies, actual or suspected), because people will not speak freely if they think they are being overheard by strangers, and there is value in frank communications, including being able to try out ideas without immediate exposure to criticism. The particular concern I have with defenders of privacy arises when they argue for legal rights to blanket concealment not of communications, and not of embarrassing facts, but of facts that would be material to the willingness of other persons to transact with the concealer on terms favorable to him.

Comments

[BillSaysThis]

Judge Posner, respectfully I think your discussion of this subject would be substantially improved if you removed the tangential remarks about prostitution, specifically:

"There is no dearth of persons willing to sell the right to see them performing or otherwise appearing in the nude, so there is a well-functioning market without need to coerce anyone to so appear."

If your assertion was correct, we would not be seeing frequent reports and articles about the huge size of the international sex trade and other similar problematic elements.

[Cogito Sum]

Judge Posner, I very respectfully disagree with the view that you take of information privacy.

First, by stating:All that privacy means in the information context (for I am not talking about the Supreme Court’s usage of “right of privacy” to describe the right to an abortion and other sex-related rights—the Court appropriated the word “privacy” to describe these rights presumably because of its positive connotations) is that people want to control what is known about them by other peopleyou are ignoring the fact that modern technology allows for "information" to be used to evaluate movement and location. This monitoring (dare I use the word "surveillance") goes directly to issues of autonomy privacy - a clearly constitutionally protected right. Tracking and monitoring cases (e.g. US v. Karo, US v. Knotts, and Dow Chem. v. US) have already shown the line between use of electronic information used in tracking - as "low-tech" as these may seem today. Cases involving physical tracking using Internet and electronic transactions will inevitably arise at some point. The physical rights of privacy are blurring with the informational rights of privacy. Control of this information may be as important as physical freedom.

Secondly, you state that people often want to "conceal facts about themselves that are embarrassing or discreditable." While this is true, people also want to conceal facts which may be flattering or neutral as well. The point being that a person ought to have some control over how they are presented or represented to society to some degree of certainty. Allowing a person control over personally identifiable information is a natural result of this desire. While information cast into society and made public should not be given such protection, the Court has regularly recognized a private person's ability to do so - possibly, most notably, in NY Times v. Sullivan.Often this involves concealing information that would cause potential transacting partners to refuse to transact with them or to demand better terms as a condition of doing so. Such concealment is a species of fraud. More often, this likely does not and protection into the seclusion of one's personal life advocated for in Warren and Brandeis' seminal work, the Right of Privacy.

While your view of privacy may hold true in some instances, basing policy decisions upon such a view in a era of such technology growth would subject the general public to unprecedented scrutiny by the government as well as other citizens, and would greatly weaken the privacy rights which have been established and relied upon.

Best Regards, CS.

[Max]

"The second motive for privacy, however—the desire to conceal discreditable facts—is more questionable from a social standpoint."

Questionable, yes, but not wholly illegitimate. Consider evidentiary rules, where the bulk of all possible information available about a witness is excluded for reasons of confusion, time wasting, or prejudice. Society frequently has a substantial interest in preventing certain people from knowing relevant information about the credibility of other's since the possibility of any of those three concerns is so high. Valid arguments can be for disclosing rape victim's sexual histories or tortfeasors insurance status, yet valid arguments can be made for excluding both, largely that the knowledge of either is very likely to short-circuit rational, empirical thought on behalf of the factfinder.

That is, I believe, a missing point of your analysis: that parties frequently (and validly) conceal information to prevent confusion or prejudice on the other party's behalf. Consider an African-American not revealing their race to a mortgage refinance corporation because they've read reports that that African-Americans pay higher rates, even when all other variables such as socioeconomic status are considered. This information is certainly "material" to the refi company since it changes their statistical profile, and yet few would say the mortgagee is unjustified in avoiding racism. Or consider a lawyer concealing HIV-positive status from his firm partners for fear of a "Philadelphia" scenario.

If, as the evidentiary rules suggest, we as a society believe that concealing material information from persons to avoid confusion, inefficiency, and prejudice is valid, then why should it not be valid in the information privacy context?

[Robert Schwartz]

I think there is a useful distinction to make between privacy (the right to not walk around naked and to not be observed at home, the 4th amentment and similar concepts) and anonymity. I am very skeptical that the concepts are the same or overlap.

I think that privacy should be protected, but that anonymity is a historical anomaly that does not deserve protection. My heuristic for distinguishing between privacy and anonymity is to imagine a pre modern village. In the middle of the village is a marketplace where old ladies sat, sold vegetables and gossiped betimes.

You were born in the village, lived there and probably never went more than a few miles away. The old ladies in the marketplace knew who you were, where you lived and the identiies of all of your ancestors and kin. They also knew whether you liked brocolli, whether you paid your bills on time and if you were charitable to the poor. You were not anonymous, but they had no way of knowing what you did in private.

In the 19th century, cities began to grow so large that most people began to live in places where they were anonymous. This was a historical anomaly.

Now, anonymity has its uses, especially if you want to comit a fraud or a crime or overthrough the government. And many people began to enjoy anonymity, especially among radical political groups who dreamed of the "Revolution," that final redemtion from history.

In the 21st century, the electronic data processing revolution has begun to dispell the fog of the 20th century city that engendered anonymity and create a new global version of that ancient village square. It is not of itself evil, it is merely a return to the common condition of mankind. Revolutionaries and their sympathisers are deprived of a usefull tool and the world is not yet redeemed, but for most of us life will go on as it always had.

[John Kelsey]

You give two broad motives for wanting privacy (protecting yourself from embarrassment and carrying out fraud), but I think you miss several others that are at least as important. One of the more obvious ones involves not giving potential criminals extra information about myself: If you know I have lots of available cash, I may be a good target for various scams, kidnapping of relatives, etc; if you know I'm out of town next week, you may want to steal my things while I'm gone.

--John Kelsey

[seth]

"people will not speak freely if they think they are being overheard by strangers, and there is value in frank communications, including being able to try out ideas without immediate exposure to criticism."

Isn't there a concern that people will not speak openly/be frank with their doctors (something that clearly has tremendous social value if the privacy of medical records is not protected?

check out http://blawgandecon.blogspot.com

[Bernard Yomtov]

First of all, I find the reference to Kennedy an unnecessary cheap shot. Is he really the only Presidential candidate ever to conceal unfavorable information about himself? I can think of more recent examples.

I think there are good reasons to want to maintain privacy. I have little confidence that information that I provided to an insurance company, for example, would be used solely for the purpose of evaluating my application. Lots of people will see it, and I personally don't trust them to maintain its confidentiality. And the insurance company will be eager to take commercial advantage by selling the information.

Most important, I see no need to justify my reasons. There is a difference between keeping quiet and lying.

[logicnazi]

Thanks for your comments Judge Posner, I always enjoy your refreshing take on matters. I agree with you totally about 'privacy' being a word of positive conotations making it difficult to analyze like freedom. In response to the individual who said that there are important reasons to support freedom I agree, after all pointing out that a word has positive conotations does not imply that these are always undeserved. I take it that the point Posner was trying to make, and the one I agree with, is that words like privacy or freedom really mean something like 'privacy when it is good' or 'freedom when it is good'. As Posner points out we don't call wiretaps on mobsters violations of privacy nor do we call laws preventing nudity or murder a restriction of freedom. In short the point is that these words have a moral component in their meaning so one can't analyze freedom to see if it is good or not since the word just means those freedoms which are good.

However, I think you miss one very important concern with privacy. In particular you don't address the dangers of differential privacy which I think is the true danger. Unfortunatly, people of privleged racial backgrounds or better socioeconomic classes often recieve more privacy than those in less favored situations. For instance racial profiling to do police stops is one example of such differential privacy and in chicago they are mounting microphones to listen for gun shots but only in the high crime (and hence low rent) neighborhoods. Thus attempts to combat crime and the increased ability of the well off to pay for forms of privacy (owning ones own house versus living in an apartment with thin walls or with a roomate who can let the police in) threaten to create a society with differential availibility of privacy.

So why is this differential availibility of privacy a problem? The problem is that we as a society condem and even criminalize many private actions which occur quite commonly. By preferentially revealing these activities in only the poor and minorities one produces a skewed view of both the disadvantaged group and the behavior (both are smeared by association). For instance I suspect that many of societies negative attitudes about both marijuanna (and over drugs to different extents) and blacks arises because of the preferential revelation of drug use amoung the poor and black despite the statistically comparable use by the well off and white. By virtue of this preferential revalation stereotypes about both drug users and poor blacks are inappropriate strengthened.

If this situation does not convince you consider the (fading) moral prohibitions against sodomy (in this usage meaning sex acts of a non-procreative type). Now this sort of behvaior has been both condemed and made illegal in many states but nevertheless its practice has been very common. However, if we now imagine a situation where the poor or otherwise disadvantaged lost a great deal of privacy but the rich did not we would of course except to discover many instances of sodomy amoung these groups for the simple reason that it is common amoung all groups. Yet this is a ready made smear on these groups and no one in the advantaged group with privacy is going to speak up to defend them lest they too be identified as sodomites. Thus by preferentially revealing the private behavior only of minority/disadvantaged groups you play directly into stereotypes about these groups being morally inferior and perhaps even result in the arrest of these individuals for a socially common activity.

In short people have a disgusting habit of publicly agreeing (or not disagreeing) with moral and legal prohibitions they violate frequently in private (I certainly no people who smoke weed who wouldn't stand up when the evils of MJ are being discussed). If we don't carefully make sure that privacy is degraded equitably we risk both enforcing stereotypes about the prohibited behavior (it isn't the sort of thing good upstanding citizens do) and the disadvantaged groups (people taking the fact that they engage in the prohibited activity as proof of deliquency). So while I think many of the concerns about 'privacy' in the abstract are overplayed I do worry greatly about making sure privacy isn't something reserved only to the rich and privleged.

[logicnazi]

Also I think it is important in this discussion to realize there are really two sorts of concerns which people have. Sure for some sorts of information people want it to be truly private, meaning the have near complete control over its dissemination. However, for many other types of information people only care about it being obscure, by which I mean it is not easily accesible, i.e., requires a non-trivial expenditure of effort or money to discover. In fact I submit that it is a loss of obscurity which is most troubling to people not privacy.

Several examples spring immediatly to mind. For instance while an individual might not have a big problem with their divorce records being availible to interested parties at the courthouse, and might even support their information being included in studies on divorce outcomes but would be very disturbed to find out that the same information was availible by googling their name. It is one thing for faceless strangers to be able to review this sort of information and another for every potential date or employer to have easy access.

Another personally relevant example. I don't really care if my medical information is viewed by outsourced employees in india (heck I don't really care if it is posted on public bulletin boards in india) but I would be very disturbed if my medical history was availible on google for anyone who was interested.

So while desire for obscurity does hide potentially relevant facts from parties who might have some concerns (employers and medical records and dates and divorce records) it can still be availible for situations where it is truly important. While there might be some slight advantages to making this data easily accesible I think these are strongly outweighed by our societal preferences to keep different parts of our life distinct. That is people have a strong conviction that what sort of thing you do in bed at night, or what sort of medical treatments you might be recieving (so long as it doesn't interfere with job performance) shouldn't affect your position at your job. As someone else pointed out this desire is often rationally based on the idea that employers or aquantances might draw incorrect conclusions from emotionally biasing information (the same worries as with differential privacy plus the problem that scandalous information travels faster than exculpatory information, for instance the information that someone was addicted to opiates is likely to spread and be damaging but the information that it was a result of intense pain medication and the person has been a model citizen since are unlikely to spread. Plus the concern that character can be assasinated by one isolated event which is easy to relay but is only exaulted through a long pattern of avoiding temptation that is hard to relay). However, rational or not this strong preference exists.

Still one might seek to object that the advantages of seperating work and 'private' life can best be balanced against the advantages of better information by the free market. That is people who don't want their private lives to be held against them by their employers will only work for employers who don't make use of this information. Thus the free market will put the approriate price on the use of this sort of personal information.

This response is lacking for several reasons. First of all individuals often simply don't have enough information to make informed deciscions. Any employee will likely not know if his employer is looking at information from his credit report or other sources when making promotion or hiring deciscions. Preciscely because of the strong preference people have that their private life shouldn't affect their work it is in the employers strong interest to hide or cover up their use of personal information in these situations. In more personal situations we have the problem that people are often quite irrational about learning information about other people, even knowing that their friend or date might be very put out many people simply cannot resist looking at easily availible dirt about the person. The same can even happen in buisnesses where the religious convictions of the owner influence what sort of information they collect from employees (all blockbuster employees are drug tested because of the conservative christian owner with probably only negative economic consequences).

Furthermore the situation with obscurity is a classic prisoners dilema like paying taxes and thus warrants government intervention to prevent defection. While one might support the general idea that work life and private life ought to be distinct if offered a pay raise to reveal one non-embarasing facet of personal information the temptation to defect is quite high. That is even though you might be benefited by a general inclination of people to avoid companies that make use of invasive information if you are offered a raise to reveal your HIV status and know you are negative the incentive to defect is high. So while people in total are better off when companies observe a strict line between the personal and professional in most situations they have an individual incentive to abandon some obscurity/privacy. Thus like any tragedy of the commons the perfectly rational action of the free market can lead to a less advantageous result.

In short I think we ought to give real serious consideration to the idea of keeping certain information obscure but not private. The fairest way to do this is likely to require some kind of physical presence and buerocratic form filling to recieve many types of publicly availible information. I don't think we can count on the free market to come up with the right answer in this case since the danger is that information will generally become easily accesible and encourage buisnesses to adopt invasive hiring and promotion practices. Thus each individual has little benefit in expending money/effort to keep their individual information obscure (and in fact doing so when others are not may give people the impression you are hiding something) and may recieve benefits of convience and even monetary reward for allowing this information to be easily accesible but suffers when everyone does this.

[Half Sigma]

Posner: "I believe that many people would be uncomfortable to learn that their medical history had been disclosed to people living in distant countries, people with whom the possessor of the medical history will never transact."

I think it's the opposite, as other commenters have also pointed out. Who cares if some guy in India who has no idea who I am looks at my medical records? We don't want our friends and neighbors to know that we saw a psychiatrist once.

When I was working at a medical company, I saw people's health records... how incredibly boring.

[Jerry]

When I began practicing law in the early 1970s, I quickly learned that privacy was ephemeral. Even then, both criminal investigators for the government, private investigators, and well-funded or obstreperous lawyers in civil litigation could ascertain almost everything about an individual that the individual might not want anyone else to learn. Privacy was protected to some degree by the cost of obtaining such information, which required face-to-face visits, phone calls, subpoenas, and, since the 1960s, time consuming formalities for criminal investigators who wanted to monitor oral communications. Digitizing information on financial transactions and medical data, however, vastly increases the risk that such nformation will become available to the general public or to those who gain access to it for improper reasons -- as the recent reports on fraudulent access to databases maintained by Chocepoint and LEXIS-NEXIS demonstrates. In the case of medical information, our society has made a value judgment that the benefits of frank patient communication to health-care providers are so great that such communications should be encouraged even by making them privileged in prosecutions and other litigation with attendant costs of blocking truth-seeking in those proceedings. It seems to me that the threat to candid communications and even to consultations with health-care providers from the risks of broader and unauthorized exposure of digitized data to the public is the relevant factor to analyze.

[Palooka]

Very interesting discussion! Paul Gowder has made a point pretty similar to the one I was about to post.

He notes that the kind of things we tend to believe are protected by privacy are the kind of things which people tend to overvalue or act irrationally about. For example, a man or woman who has HIV may wish to conceal this fact because of irrational fears and/or prejudice that disclosure may elicit. Now, certainly there are some situations (medical field) where that fact is important to disclose, yet in the vast majority of cases the relevance of the fact is far outweighed by the irrational and prejudicial way in which the information is treated.

If at oral argument the good Judge Posner was asked if he had ever had anal warts, would the Judge even answer such a question? I would hope he would not. Yet the judge seems to take a position which would make such information available--because, hey, we don't want to commit fraud--to the general public, one's employers, fellow employees, etc. Which begs the question, is the Judge who refuses to answer such a question committing fraud in the same way keeping those medical records private commits "fraud"?

The two competing interests, as I see it, are the relevance of the information and the the interest in reducing irrational discrimination or embarrassment. As the relevance of the information grows, the case for keeping records private diminishes. The second interest is in protecting individuals from irrational or prejudicial treatment. Why someone's STDs or their irritable bowel syndrome status should be available to employers, business partners, or even the general public is a concept which escapes me. The relevance of the information like this is very low, yet the likelyhood the information will unduly embarrass, damage, or stigmatize the individual is high. Privacy makes a whole lot of sense in most cases, Judge Posner.

Though in your conclusion you seem to concede some of this with your "materiality" qualfication, I think it is important to remember that because people are often irrational or prejudicial, what is "material" to them is in fact immaterial to the business transaction at hand from an economic standpoint.

[Palooka]

"It seems to me that the threat to candid communications and even to consultations with health-care providers from the risks of broader and unauthorized exposure of digitized data to the public is the relevant factor to analyze."

Excellent point!!!

[logicnazi]

While I agree with Palooka that many things we care about in respect to privacy are those things people are inclined to act irrationally about, in some sense, I'm not sure if this is sufficent to defend government sponsored privacy rights or properly deliminate those rights. In particular I am worried that we are confusing two distinct and very different notions of irrational. There is the first sense of irrational we use in everyday language refering to feelings which we judge to be reasonable. This is the sense in which one can have an irrational fear of flight. We judge a fear of flight to be irrational because we don't feel it is reasonable to have a primitive fear of being in flight and the chance of death is quite small. However, we don't call a fear of being seen naked in public in a foreign city with no nudity laws irrational even though there may be no more risk of a bad outcome than when flying.

Alternatively we have the technical notion of irrational that we use in economics. That is an action is irrational if it does not serve to maximize the actors ends no matter how silly those ends might be. Thus in the economic sense of rationality it is perfectly rational to pay an extra 50 dollars to take the train rather than to fly since your 'irrational' fear of flying will cause you 50 dollars worth of anguish if you took the plane. Since the government is often rightly in the position of choosing not to inflict unnecessery worry on the public even if that worry might be irrational (in the first sense) it seems only this second sense of being irrational is relevant to government action.

Having made this distinction the quesiton now becomes whether the knowledge of private information really makes people behave in economicly irrational ways or just irrational in the first sense. That is it is not sufficent merely to note that people are scared of those with HIV even when there is no chance they won't get it. Even if we don't think this fear is reasonable it still is a real fear and these people may be truly happier knowing certain of their friends are HIV free.

In short observing that people act 'unreasonably' in response to certain knowledge is not sufficent to establish that their possesion of this knowledge doesn't increase total utility. Conversely to establish that this information made people act irrationally in the economic sense is just to say that this information tends to make whoever knows it act so as to achieve less of their ends. Yet to establish this we would already have to have established that knowing this information didn't provide more benefit than harm which is just begging the question.

Basically, I'm worried that this argument relies on a subtle confusion of the two notions of irrationality. However, there does seem to be something there so maybe I am just missing it.

Furthermore, I have to object to the analogy between lack of privacy for personal information and being asked embarassing personal questions. While these subjects might also be embarassing for others to know the answers to this is entierly distinct from the reason we are bothered by people asking the quesitons in professional situations.

The reason why asking a judge if he has anal warts is upsetting is because the question is rude and implies a disrespect of the person involved not because we feel strongly about the privacy of the information. After all such questions are unpleasent even when they are not answered so it can't be the revelation of the information which is bothering us. Moreover, often we are totally unperturbed if that same information is publicly accesible. For instance Judge Posner would likely be quite offended if an attorney asked him in court if he had anal warts even if he wrote publicly on his blog that he did or did not. Or more personally I have no problem admitting here or in other public forums that I don't have HIV but I would be quite disturbed if one of my students asked me this in section. In short one needs to be careful about distingushing between the impacts of the information being public and accesible in some manner and the social implications of directly asking about that information. (As an aside I think this is what the protestor who asked Scalia if he sodomized his wife was missing)

[Palooka]

"Furthermore, I have to object to the analogy between lack of privacy for personal information and being asked embarassing personal questions."

I agree that such a question represents a great deal of disrepect. But WHY does it do so? Because we have expecations that certain subjects are "off limits" and certain information is for our own use only. It's rude and disrespectful because it's NOBODY'S BUSINESS!

"Or more personally I have no problem admitting here or in other public forums that I don't have HIV but I would be quite disturbed if one of my students asked me this in section."

I think you're confusing something here. When one chooses to unveil one's privacy on an issue, then of course they would not be offended! A voluntary disclosure is not analogous to mandatory disclosure to the public. Sure, the kind of forum makes some difference. People don't like to be humiliated or embarrassed in person, but neither do they want their neighbors or employers gossiping about their conditions behind their backs (or worse, acting on that information in a discriminatory manner).

It is true that many personal or embarrassing medical details may be relevant to an employment or contractual decision. A more tailored solution would be to provide confirmation for relevant medical facts rather than make medical information widely availabe. I by no means think privacy is absolute, but I find the level of transparency implicit in Posner's analysis troubling and deeply flawed. He doesn't seem to analyze what positive effects--for example, limiting irrational or prudish discrimination--privacy produces.

[Palooka]

LogicNazi,

One more thing: I agree that pyschic disutility can be included in economic analysis. The problem is, in place of increased "pyschic utility" on the part of the discriminator we get many costs, which in my estimation greatly exceed the gains. The increased utility somebody gets from discriminating against X group is unlikely to exceed the loss suffered because of discrimination (decreased income, opportunity lost for group X, disutility for group X, AND efficiency suffers, reducing income of the discriminator as well).

[James Wetterau]

I think there are several aspects of privacy beyond those contemplated so far. To name one case, I'm amazed that the implications of attorney-client privilege have not come up.

To name other examples, people commonly desire privacy in the details of their contemplation and discussion of important decisions. Should I move? Should I have a child? Should I take that job? This makes sense from two possible lines of quasi-economic analysis: it's a bargaining strategy and it preserves the value and quality of news about oneself. If we announced our every idle whim, our friends and acquaintances would soon be overwhelmed with tiny, frequently incorrect details about us, which they would no doubt learn to ignore as a nuisance. If we reserve discussion of our intentions until we have made up our minds, we show due respect for the attention and interest of our friends and colleagues. In this case, privacy is used to establish a sort of quality-control over information.

In a similar manner, some of our ideas are not so much embarrassing as they are unfinished. Privacy in both these cases affords us the opportunity to produce a finished product.

Then there is the use of privacy to establish a sort of fund of the personality. Many of us cherish ideas, dreams, preferences, intimacies, opinions, favorite entertainments, etc. that we discuss with others once we feel we have met a kindred spirit. There's nothing embarrassing or discreditable about this information, but sharing and discussing such things can form part of building a friendship.

[Paul Gowder]

Sorry, I forgot to finish a sentence in there. (Now you see how I write...) In the privacy regime, only 2k of utility is lost because the... employee doesn't lose the job and the employer doesn't fear his exposure to a HIV-positive person. The only loss is the general suspicion of the employer that someone in his employ MIGHT be HIV-positive, which we valued at 2k.

[Bernard Yomtov]

Posner argues that we have an obligation, in some transactions, to surrender privacy, to reveal facts we would prefer to keep secret.

But this seems to be a one-way street. Take the case of an HIV-positive job applicant. If the applicant is somehow ethically required to reveal his condition, why isn't the employer required to reveal its position in regard to hiring HIV-positive workers? Isn't it just as deceptive to keep this policy secret?

Might that cause the company embarassment? Well, the policy is either defensible or it isn't. If it's not then maybe the company should be embarassed inot changing it.

Why isn't it a requirement that the health insurance company publicize its underwriting rules? That way some applicants would be spared the trouble of applyng for insurance they are not going to get, or that will cost too much. Others will be able to select an insurance company that has the best deal for them. Does this work to the disadvantage of insurance companies? Yes, but that doesn't seem to be a concern in the case of individuals. Why should the companies be any different?

[hamilton]

judge,

your concern is concealment of "facts that would be material to the willingness of other persons to transact with the concealer on terms favorable to him."

i agree, but i am wary for the following reason: it may be the case that persons, if given full information regarding prospective transacting persons, would improperly process the information. embarrassing facts from someone's past may be enough to not hire that person for a job or not date that person. but if you view the individual as a series of individuals over a life span, as i do (like Nagel), then it seems clear that past poor qualities or judgment may very well be a poor proxy for current qualification.

because i think people would put to much emphasis on information from one's past, privacy can help to control the amount of irrelevant information an information-seeker receives.

there are responses, of course. privacy also protects current, relevant information. further, if everyone lacked privacy, then perhaps people would give less weight to embarrassing facts from the past because it would be understood that the past, in many instances, is a poor predictor of conduct.

thanks.

[Paul Mooney]

Bernard hit the nail on the head.

Sad to say, but I think real human beings should have at least the same rights to privacy as ficticious human beings (corporations).

Judge Posner is worried that real humans might hide relevant information that could affect economic transactions. Ficticious human beings routinely hide relevant information up to the point of endangering the health of buyers (at which there is at least some redress but not much given the disparity of information as well as financial and political power).

Lets bring the privacy rights of real people into line with the rights of artifical ones. That is a good start in my opinion.

[Chris Willis]

Some very interesting thoughts raised by the HIV+ job applicant.

If that information is made public, couldn't that have, in the long run, some very positive effects?

In the beginning, the individual is not hired by an employer because of irrational fears (or, perhaps, a rational and ever increasing desire to keep health care costs down in the workplace - see below). There is disutility here, but it also creates value for rational actors.

The next employer who evaluates this candidate in a presumably rational way will recognize the good deal that they are getting - the market value of the applicant's skills has been depressed because of the irrational fears, but not the actual value of the skills, so the applicant may get a job at less than their skills' actual worth, and the employer gets a better value than a rational market valuation would have given him. Thus, he has a market advantage over the irrational actor, his competitor.

The competitor can either face the facts and recognize that he has acted irrationally, and thus discontinue his fear-driven hiring policies, or can maintain them to his own detriment.

I would expect that, eventually, enough employers would see their irrationality (when faced with the competitive disadvantage that it puts them in), and change their ways, thus restoring the HIV+ job applicant's skills to a more rational market valuation.

However, in a scheme where such information is kept private, irrational actors are never confronted with their irrationality, and thus they maintain it.

But, this of course falls apart if health care costs, lost productivity from illness, or other factors do, in fact, make an applicant with HIV (or any other illness, or, arguably unhealthy habit e.g. smoking) less valuable to an employer. In such a case, it is a value judgment on society's part whether we want that person to suffer the detriment of the valuation, or if that information should be kept private, and thus let the loss fall on potential employers.

[Paul]

“But once records are digitized rather than existing solely in hard copies in the office of the patient’s primary physician, the risk that unauthorized persons will gain access to them is increased.”

This assumption that digitization automatically creates increased risk instead of decreased risk is of serious doubt.

The UK is currently building out a digitized medical record system that will keep track of everyone who views a medical record. Keeping an access log like this can reduce the risk someone uninvolved in the care of a patient will view without punishment the records of celebrities, politicians or even neighbors.

Similarly, the Department of Defense has had great success in the creation of its secure computer network, largely in part because the network uses computers that are only attached to the secure network and no part of the network is connected to any outside system or the internet. In offices with computers on the secure network you will see two computers one for secure work and one insecure work.

It seems like paper records can be viewed almost at the will of anyone working in a medical facility without record of copies being made or who has accessed a file and when. Digitized records reputation has been tarnished by a few high profile lapses in security that is not indicative of the real promise of the technology.

[Saud]

There is something to the nudity taboo, as this might perhaps be the psychological basis for privacy instincts. You ignore for the most part the psychological effect of 'unveiling' certain aspects of a persons life. The immediate example would be rape victims who for obvious reasons would not want people to know they have been raped. Though there might be elements of shame involved, many recognize that by definition the victims did not have the agency to prevent it. The victims would perhaps want to avoid special treatment by everyone around them, which would be a constant reminder of the rape. How is that different from an alcoholic who wishes that his problem drinking not be known by his co-workers, employer, etc. ? Or say a diabetic? I had a diabetic friend when I was younger who really hated when other parents treated him differently when he came over, preparing for him special foods and such, even though he was in a far better position to recognize his own blood sugar level anyway.

I am not sure I can interact in a society where everything about me is easily accessable. Criminal or not, you'd worry about being identified as a fraud, especially in academic/professional circles. I'd like to have my doubts over my abilities and knowledge as private, because if they were out in the open I wouldn't have the confidence to speak out. e.g. "How can I talk about ethics, if everyone knows I was caught stealing candy in elementary school?" Perhaps Augustine's way is best, admit you were a sinner, and somehow package it that you are all the more better for recognizing it.

[David]

Interesting post, but I think Judge Posner conflates a number of concepts that are analytically distinct. I wish I had more time to refine my thoughts, but I'll give it a quick shot.

First, "privacy" in a legal sense has nothing to do with the "right" to not be seen nude in public. That is simply a social convention that people follow by wearing clothes and that society facilitates by providing "private" areas where people can change clothes, etc. This social convention is just a custom -- a taboo, perhaps -- far removed from the "privacy" debate about medical records or, say, abortion. It's more akin to the social convention that one wears a suit and tie to court. Indecent exposure laws create a "right" not to see others nude in public, but I think that just demonstrates the depth of the social convention; it doesn't create a "privacy" right.

"Privacy" in the 4th or 5th Amendment sense is a limitation on state power: the state cannot unreasonably spy on its citizens. The purpose is to create a zone of liberty where "big brother" cannot penetrate. There is no doubt that the 4th and 5th Amendments contemplate such a zone of "privacy," though the outer edges of that zone (e.g., abortion rights) are a matter of great debate.

"Privacy" in the sense of keeping medical records (or other personal records) confidential is a positive right created by legislation that bars private actors from passing on certain information. It is more akin to trade secrets or state secrets than to 4th or 5th Amendment rights. The idea is that personal dignity is diminished if strangers know certain very personal details. Such rules expand the zone of privacy beyond the body to the realm of facts and knowledge.

These various forms of "privacy" have different legal roots and grow out of different social conventions. We should take heed of the underlying reasons for the privacy concerns when deciding where to draw the line. I would err on the side of greater privacy when the concern is infringement by the state, and I would be less inclined to recognize a "privacy" right that prevents private actors from sharing information. However, the prevelance of identity fraud and other "information" crimes these days, not to mention email "spam" and telemarketing, might indicate a need for greater "information" privacy.

As to concealing bad qualities from a dating partner, that should remain well beyond the realm of law. Of course, as Judge Posner notes, concealment is doomed to fail in the long run.