Posner's Response to Comments on Privacy Posting

There were as usual a number of very fine comments, some of which require me to extend my analysis in various ways. For example, one comment points out that people don't merely conceal discreditable information about themselves; it is more accurate to say that they make a selective presentation of the facts about themselves to other people, and this selective presentation may be more informative about the person than an unscreened flood of information about him. (The sociologist Erving Goffman wrote about this in a great book called The Presentation of Self in Everyday Life--it is an essentially theatrical conception of human social interactions: we create a self or selves to manage our interactions with other people. I formulate his analysis in economic terms in Chapter 25 of my book Overcoming Law (1995).) This is related to but extends my point that requiring an SEC-regulated prospectus-like disclosure of all material information about a person would flood society with trivial information. It would not only be distracting, it would actually reduce our knowledge of people by preventing them from signaling through their self-presentation how their intentions, motivations, and purposes should be understood. A point also made in the comments that is related but that I do not fully agree with is that people should be able to conceal information about themelves that would trigger ignorant or irrational prejudices on the part of other people. I think that in general people should be allowed to make their own judgments about other people--should be able, thus, to decide for themselves what is material information. But psychologists do correctly point out the operation of what they call the "availability heuristic," which is the tendency of the mind to be seized by features of a situation that are particularly arresting though not necessarily important from a rational standpoint. So knowing that a person was HIV-positive or had had a sex-change operation or had (in one commenter's analysis, "anal warts"--an arresting condition that I had never heard of before, and would prefer not to have heard of) might overwhelm one's attention to all the other facts about the person that might be more important in relation to the particular transaction that one was contemplating having with the person, such as retaining him or her as one's accountant. The problem with this insight is that it does not enable a sharp line to be drawn between concealment designed to take advantage of other people and concealment designed to prevent other people from reacting irrationally to one's offer of a transaction. Another point I have reservations about is whether reducing the privacy of medical records would cause people to shun doctors and if so whether this would be altogether a bad thing. People will not, merely to protect privacy, avoid seeking treatment for serious illness; and as for trivial illness, there is only a slight privacy stake and anyway it might be all to the good if people were less quick to seek medical treatment, including cosmetic surgery, for conditions that either are not serious or that are not medical conditions, in the sense of illness, at all. A further problem with concealment of medical records is that it disrupts the efficient operation of insurance markets. Low-risk people get pooled with high-risk because the high-risk people conceal their riskiness. The result is an arbitrary redistribution of wealth from the former to the latter. One comment reminded me--as a public official, I should not have needed this reminder--that a frequent and proper motive for concealment of information about oneself is simply self-protection: you don't want criminals to know the details of your financial situation, where you bank, your address and phone number, your credit card number, etc. That is, it is entirely proper to try to conceal information about yourself from people you don't want to transact with, unless you are the outlaw and the people you're trying to avoid are the law. One interesting comment points out the distorted understanding that can arise from the fact that the rich have more privacy than the poor; privacy is what economists call a "superior good," meaning that one consumes relatively more of it as one's income rises. If the poor have less privacy, so that more is known about their misbehavior, a false impression may be created that they misbehave more than the rich, whereas the amount of misbehavior may be the same and the only difference may be that the rich conceal it better. Against this, however, is the fact that there is much more curiosity about the private lives of the rich--which may be one reason why privacy is a superior good. The rich spend more to protect privacy, but the media, to gratify public interest in the lives of the rich, spend more on penetrating the privacy shield. So maybe we know as much about the private lives of the rich as we do about the poor, or even more. Let me pursue the "superior good" point a little further. Because privacy is a superior good, the amount has grown as society has become wealthier. Americans have far more privacy today than they did a hundred years ago. This results in greater happiness on the one hand, but (qualifying the increase in happiness) greater opportunities for fraud in personal and commercial relations, and indeed for terrorism, which requires a high degree of secrecy in preparations, on the other hand. Because of the serious downsides of privacy, the growth of privacy incites a responsive growth of methods of surveillance, now greatly facilitated by digitization, which in turn incites a countermovement for encryption and other methods of restoring privacy in the face of digitization. So there is a kind of privacy arms race.

Comments

[touche]

It would be interesting to compare the attitudes of Canadians to those living in the US on the topic of privacy of medical records. With a national health care system, medical conditions would not determine the cost or availability of medical insurance, or the cost of benefits from prospective employers. In the US, small employers are especially leery of hiring someone who needs expensive medical care.

[logicnazi]

Good reply. However, I'm not convinced that people really won't refrain from seeking medical attention. I agree this may be true for most diseases and afflictions but it probably won't be true for those afflictions which carry with them significant social reprobation.

For instance it is already true that women from or married into strict religous families (is it muslim, I don't remember the religion so don't want to be slanderous) will avoid being tested or seeking treatment from VDs like the clap for fear of being labeled unfaithful or even physical violence. While this is an extreme example the same effect appears to a lesser degree in many other situations with STDs.

In fact this is just as you would expect. Whenever the social cost of being identified as diseased is on par with the harms of the disease itself (at least from the point of view of people who heavily discount the future) people are going to avoid seeking treatment. Medical privacy can partially serve to alleviate these social costs by hiding the illness while allowing treatment but if you destroy that privacy you will certainly get people who avoid testing/treatment for HIV and other STDs hurting not only themselves but posing a public health risk.

A similar concern arises in respect to insurance company knowledge. Genetic testing for heritable conditions or other subtle methods of identifying risk factors offer the promise of considerable health benefits. However, if the price of knowing that one is particularly prone to heart disease is being unable to obtain insurance it won't be worth finding out since in addition to the loss of money it is quite reasonable to think that the loss of insurance is of greater risk than the benefit of knowing about your heart risk. While a system of lifetime insurance might solve this problem the current system of job offered health benefits means that finding this information out can cause big problems. In particular it makes the harm from subsequently losing one's insurance very high.

Now you argue that not revealing this information amounts to unjustified transfer payments from the healthy (or apparently ill) to those with hidden medical conditions. I think this is simply the wrong question, the right question is does it make people better off overall. I mean ANY type of insurance can be viewed as transfer payments from those who won't file a claim to those who will and I fail to see why prior knowledge changes the moral facet of these transfers.

Moreover, insurance is not the only avenue of transfer payments. As a humane society we treat everyone with critical conditions. So if people lose insurance as a result of lack of medical privacy we may still end up paying for their treatment. In fact because people without insurance are more likely to seek treatment from hospitals in emergency situations we may end up paying even more. In other words one can think of medical privacy laws as a partial form of government health insurance (leveling everyone to pay similar amounts) without sacrificeing the benefits of a free market in medical services. In fact if the idea of transfer payments bothers you why not consider medical privacy laws as a type of insurance issued to everyone at birth by the government against subtle but detectable health risk factors.

Also you point out studies showing that certain sorts of information can actually cause people to make very poor deciscions. While I agree with you that this in itself allows no easy line to be drawn between appropriate deciscions based on weird preferences and simple impaired judgement this doesn't mean we can't use some other line. In particular it seems we could easily discover that certain sorts of information on the whole reduced utility in their discovery. For instance publication of sexual orientation which is going to be very very rarely relevant for employment, will always be disclosed to those it is relevant to (potential partners), and the uncertainty seems to cause no injury in itself is likely one of these factors.

So while there might not be a compelling argument for privacy in the abstract or in general it does seem that there are some identifiable types of information which make society better off by being protected. So why should we not do essentially what we do now and enact privacy protections for specific types of information that is likely to cause more problems by its release then benefit?

Finally in terms of the rich and poor I don't think that the press really equalizes the privacy. Only a very few people who are not only rich but also celebrities or political actors are subject to this scrutiny. A guy making 200k is not likely to have any press attention. Unforuntatly reports on celebrities are not likely to counterbalance the loss of privacy of the poor. Celebrities are already considered an immoral group who give in to temptation. So news reports illustrating that celebrities use cocaine at the same rate as black people in the ghetto does nothing to diffuse the potentially incorrect perception that poor blacks are morally corrupt.

Quite simply no amount of investigations showing the immorality of celebrities will convince people that their friends and neighbors also engage in the same type of behavior. If some type of inappropriate behavior like oral sex is associated both with poor minorities and celebrities this isn't any better than just associating it with the poor as far as public attitudes go. Besides the danger is not only that the poor will get incorrectly associated with some behavior but also that some behavior will get inappropriatly associated with being poor or other negative correlates of low socioeconomic status. For instance using MJ would be incorrectly deduced to cause loss of jobs or laziness or whatever if only the poor's smoking habits are revealed. The fact that celebrities do this as well would be irrelevant, people understand that different rules apply to celebrities and aren't likely to conclude that because drew barrymore can stay rich and keep her job while smoking pot a normal person could do the same.

Finally, I simply don't believe that the inquiry of the press totally balances out the extra privacy of the very rich even in the case of celebrities. Sure the press can be very invasive in some respects but this level of money lets them conceal private behavior like drug use or type of sexual relations quite effectively. Even if the press gets some story usually they can maintain denyability. Moreover, the press does not uniformly dig for any material, some types of information is considered off limits for all media except the untrustworthy tabloids. No newspaper will run a report on whether brad Pitt is having anal sex. So even if their incredible resources don't let them hide this sort of behavior the media is not likely to equitably report all sorts of information.

[Ben Love]

I know this is unrelated, but would you take up the topic of class mobility in your next round of posts? Thanks.

[Palooka]

"A point also made in the comments that is related but that I do not fully agree with is that people should be able to conceal information about themelves that would trigger ignorant or irrational prejudices on the part of other people. I think that in general people should be allowed to make their own judgments about other people--should be able, thus, to decide for themselves what is material information. But psychologists do correctly point out the operation of what they call the "availability heuristic," which is the tendency of the mind to be seized by features of a situation that are particularly arresting though not necessarily important from a rational standpoint. So knowing that a person was HIV-positive or had had a sex-change operation or had (in one commenter's analysis, "anal warts"--an arresting condition that I had never heard of before, and would prefer not to have heard of) might overwhelm one's attention to all the other facts about the person that might be more important in relation to the particular transaction that one was contemplating having with the person, such as retaining him or her as one's accountant. The problem with this insight is that it does not enable a sharp line to be drawn between concealment designed to take advantage of other people and concealment designed to prevent other people from reacting irrationally to one's offer of a transaction."

Very good reply. I am puzzled, however, that because we cannot draw a "sharp line" between permissable and impermissable concealment, that you essentially believe no concealment should be allowed. In those few cases where anal warts, HIV status, or sex-change operations are relevant enough to warrant disclosure, why can't disclosure be required by one party in contract? I would think that disclosure of contagious disease is one prerequisite for those in the medical field, but if we're talking about an accountant, why should that information be readily available when the relevance is so low, but the harm to the individual so great?

I think there's a case to made for allowing some increased transparency (verifiability for relevent information, for example). However, I don't think there is much of a case for complete transparency. Just because there are some grey areas, doesn't mean we shouldn't draw a line somewhere. Why give up on balancing competing interests?

[Loweeel]

Judge Posner,

Regarding the arms race, another development in that has been the removal of the "stick" of defamation in tort, particularly for media defendants.

The creation and subsequent broadening of "public figure" exemptions (with the definition of a public figure seeming to vary between "somebody a newspaper writes about" and "a plaintiff the court likes") for media defendants seems -- at least to this student who just finished up his first year of law school -- to have been quite the trump card in this arms race.

I'd call it rent-seeking, but I'm too young (and too ignorant of the relevant political history) to know about the amicus briefs at the time, which I guess would be the equivalent of lobbying and whether or not there was any similar or opposing action in Congress at the time...

[Loweeel]

excuse me, I meant to say "the court dislikes DISlikes", not "the court likes", in the previous post.

[N.E.Hatfield]

Has Thorstein Veblen become relevant again? I thought that was burned at Linnea's statue years ago. There is only one road to wealth accumulation and that is to hold onto it and not let it slip away. Hence, the constant political battle to hold on to it. Tax cuts? Hmmm, where's the lobby and who truly benefits?

I've lost track, what's the budget deficit running at now, both state and federal? And I won't even mention the trade deficit.

[Barry]

I find myself constantly at odds with my propensity to "selectively present myself". It's as if my memories are my wishes. We all make mistakes, but a carefull application of character can get you through these times when you just feel the need to reinvent.

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