I recently handed my OPF business card to a friend. It was handed back to me later in the evening with the words ‘Online Privacy Foundation’ crossed-out; they had been replaced by ‘ paranoid scare-mongers inc’. I always knew we faced an uphill struggle.

Engaging society in a rational debate about where our most intimate technologies are taking us has always been difficult. The internet is like a number of other seductive, everyday, and seemingly liberating technologies, such as cars and mobile phones. It has tended to make users reliant and service providers reckless, and both have little incentive to face some awkward questions. That is, unless the evidence slaps us in the face so very hard. Such awakenings are rare and often may come too late; such as the environmental damage some of our other ‘wonder’ technologies have brought upon us.

The business card incident in the night however made me more determined to help get the facts out there and force a constructive debate about online privacy issues. At least with the internet, although we are already seeing individuals falling foul of its risks, we have a real opportunity to avoid this technology dictating its own future and therefore ours. We can understand and manage the risks of what is also a fantastical opportunity, before we are sucked into a self-consuming spiral. In fact, past human failures to foresee and manage the outcomes of technologies combined with the enormity of the possibilities of the internet (good and bad) must be a cause for concern, but not of course for paranoid scare-mongering. Organisations like the OPF, some of the world’s top academics, and an army of good-guy (‘white hat’) hackers around the globe are beginning to prod society – if not yet delivering it the full slap in the face – with the evidence of the potential hidden costs of the internet. Understanding these costs will help us make the right choices as both internet users and as internet service providers.

The concept of ‘costs’ as used in Economics may help us prod and probe in the right areas. Markets are assumed to bring optimal outcomes for society when everybody has perfect information about the market conditions (barring a few necessary secrets to maintain competition between enterprises).  In this situation, the true cost of something is therefore known and that drives ‘rational’ choices and thus ‘rational’ outcomes. Sure, the market-place has driven great gains in our overall welfare so far, for some, but with massive uncalculated (incalculable?) costs in human lives and environmental damage. Some Economist might say therefore that we could have avoided ending up living in a world whose life systems might fail us because we’d have been able to cost the damage of our market transactions properly, before we went on a carbon-burning ‘spending’ spree; if only we’d had the right information.

Economists call this the problem of ‘externalities’. These are the hidden costs of transactions which distort the price; neither seller nor buyer knows the true costs or, worse, the seller does and the buyer doesn’t. On the internet we pay with money and/or personal information for a service.  We might ‘pay’ a lot less or nothing at all if we knew that a ‘transaction’ came with an increased risk of something bad happening to us as a consequence. Worse still, when we buy internet services with personal information we often consider it to be ‘free of charge’ – this could prove to be way off the mark.

Information about risks should help us make better choices about our internet ‘transactions’. Luckily, the market can be a good arbiter of better information. Internet service ‘sellers’ should respond to ‘buyer’ choices and demands by acting to eliminate those externalities that are brought to light by public research (otherwise they will lose business). The real costs of internet use would be known to all but they would be minimised, and ‘prices’ might thankfully remain low. However, if it were revealed that certain potential costs were unavoidable and sellers could do little about it, as consumers we would at least want to know about the risks so as to make more rational choices. For example, if we ask: is the benefit I get from posting this photo on Facebook worth the potential costs I know about? For most people, each side of this equation would have a tipping point. Information could swing you one way or another towards a more rational and less ‘costly’ choice.

Action in the public sphere to discover the potential hidden costs of the internet, such as from the OPF, is particularly important, as may be engaging with internet service ‘sellers,’ and even governments if needs be (whose role has traditionally been to rectify market failures). Public action is needed as there is a growing number of ‘market-distorters’ operating in the private sphere who are incentivised to hide their own knowledge of the wider costs to ‘buyers’ of internet services, and manipulate our ignorance of it – employers seeking methods to get more information than we are willing to give them, criminals or politicians seeking the gullible, or just mischief-seeking hackers, to name a few.

So, we might see online privacy research and raising public awareness of online privacy issues as a way of helping to perfect the internet market-place. In doing so, we may liberate the full potential of the market to bring us much freedom and wealth (in whatever way you want to value it). This is not to mention how we might analyse the ‘positive externalities’ of sharing personal information on the internet (the potential hidden benefits, not costs, such as the potential ability to spot and help those with mental illnesses). But it does seem clear that uncovering what may be hidden and doing something about it should be rather worthwhile, especially when we already know what some of the market-distorters are up to.

At the OPF we are keen to focus our future activities on revealing the potential costs to those people in society who may be most at risk from a lack of information about internet externalities, and most at the mercy of ‘market-distorters’. Of particular concern are children and young adults. The potential volume and depth of personal information they could ‘invest’ in the internet over their lifetimes is mind-boggling. In any other sphere, it would seem a tad ill-advised to leave such population groups with unlimited ‘funds’ to invest as they pleased in commodities whose future risks were unknown. At the very least, economics and history warn us about the pitfalls of a blind belief in the benefits.

Let’s bring on the debate: http://www.economist.com/node/21556578

Matthew Shearing, Co-founder, OPF