Why Too Much Privacy is Bad for the Economy

Tesco, a British grocer with global status, has this week teamed up with Alan Sugar’s Amscreen to take personalised advertising to the next level. By means of Amscreen’s proprietary facial recognition technology, Tesco is introducing cameras that determine your age and gender when you reach the check out. Advertising targeted at your demographic will then be displayed on screens in front of you.

By Andrew McStay, Bangor University

Clearly this is a lucrative win for Amscreen and a bold strategic move for Tesco, but what are the implications? Shoppers are unlikely to see this development as a good thing. It’s an instinctive reaction to being watched but it also relates to the motivating philosophical values at play, particularly in regard to transparency.

A philosophy of transparency

Tesco’s success is in large part built on the Clubcard initiative that started in the 1990s and put it far ahead of the game in assessing customer behaviour and preferences. By handing out reward cards that were swiped every time a purchase was made, profound logistical innovation in terms of stock and pricing strategies became possible.

However, underpinning both Clubcard and face-tracking technologies is something much older, involving what we might phrase as the will-to-transparency that, in this case, is expressed through desire for market efficiency.

There are a number of philosophical sources we could turn to, but discussion of transparency is perhaps most reminiscent of Jeremy Bentham. For Bentham, transparency had moral value. He argued this in terms of the value of journalism, which puts power-holders under moral scrutiny.

However for Bentham, this was not only to apply to society’s leaders, but to all people, since equality is to be found by all of a society’s members living in open view. This led him to picture the world as a gymnasium in which each “gesture, every turn of limb or feature, in those whose motions have a visible impact on the general happiness, will be noticed and marked down”. The term “general happiness” is worthy of remark. For Bentham, transparency and surveillance are a positive way of making all things present in order to generate understanding and make life better for all.

This societal set-up equates privacy with inefficiency. Richard Posner, a contemporary Benthamite, claims that breaking down privacy domains and promoting transparency of the population is economically and morally beneficial. Privacy, on the other hand, becomes a barrier to wealth maximisation.

Paradoxically though, for Posner, wealth maximisation means that businesses should be afforded greater levels of privacy because placing businesses under the public spotlight harms economic growth. Privacy for individuals simply hides discreditable facts and hinders the flow of economically valuable information, but for businesses it is necessary for entrepreneurship and the creation of innovative strategies and techniques.

In this view, for total market efficiency, transparency and net societal gain to be reached, goal-directed systems should be allowed to operate without disruptive intervention. Posner extends this as far as considering the long-term value in fully disclosing sexuality, political affiliations, minor mental illnesses, early dealings with the law, credit scores, marital discord and even nose-picking.

This makes a virtue out of disclosure and forced publicness. As well as being economically beneficial, radical transparency could mean that, over time, irrational shunning and biases (for example, about being gay) would be excluded. Less is said, however, about the outcomes for folk who would make privacy sacrifices in order to enlighten the rest of us.

Checking you out at the check out

We now have a better picture of the motivating impetus behind Tesco and Alan Sugar’s Amscreen - that is, total informational awareness. My concern, then, is less about seeing demographically appropriate advertisements but the meta-objectives behind this process.

The philosophical processes that underpin the introduction of these cameras at our checkouts make it unlikely that Tesco will stop at monitoring our age and gender. Without doubt they will have considered scanning customers’ build, skin colour, hair length and style, facial features, facial expressions, language, voice tone, accent, conversations, cosmetic and make-up type, logos on clothing, jewellery type, point of sale behaviour, modes of interaction with others, humming of songs, and a variety of other ways (heat and scent sensors?) of getting at the behaviour and mood of the customer. Then there is the overwhelming impetus to tie this to the Clubcard itself.

While every little helps, we’d do well to balance this against the social and technical scenario emerging from this philosophical logic and decide whether this is the type of society we want.

Andrew McStay does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.