Posner on Privacy

Notes for November 7

Main points

We discussed Posner’s economic analysis of the right to privacy. This comes in two parts.

  1. An economic analysis of privacy: an examination of how privacy rights either favor or hinder social wealth.
  2. A review of the decisions of judges to see if they conform with the economic analysis when deciding privacy cases.

The economics of privacy

The primary economic case for giving legal, enforceable rights to keep information private concerns information that is costly to acquire. If this information could not be kept secret from others, no one would have an incentive to go to the trouble of finding it: others could just sell the fruits of their labor. Everyone is better off with the system of property rights. Those who can get the information are willing to do so and those who would pay to buy it from them can do so as well.

Personal information, by contrast, is usually used to deceive others, according to Posner. To put it another way, it is used to get people to buy things they do not want, like employees with criminal records.

Finally, there is an economic case for protecting communication. Without it, it is harder to get candid information and opinions from others.

Privacy in the law

Posner maintains that courts have recognized privacy rights in ways that mirror the economic analysis of privacy. For example, it prohibits industrial surveillance that simply forces firms to take expensive counter-measures but it does not prohibit ways of acquiring information that do not provoke counter-measures. Hence aerial surveillance, which would only get other firms to hide their factories, is out while reverse engineering a product, which would not cause similar counter-measures, is OK.

Our discussion

Posner’s analysis has obvious implications for a project like Zach’s. The problem he has noted is that it is nearly impossible for people who are convicted of felonies to rejoin social life even after their official sentence is complete. One manifestation of this is that it’s very difficult for them to get jobs.

The most obvious response to that is to give a right to privacy that covers a criminal record. For instance, we could make it illegal for employers to ask if an applicant has a criminal record on a job application.

It seemed to us that there were two ways of going about arguing for something like that.

  1. Show that employers do not process information about criminal records rationally, contrary to what Posner claimed. If that can be made out, keeping the information from them seems like less of a way of deceiving them.

  2. Argue that the social benefits of making employment open to former convicts are great enough to outweigh the costs on individual employers who would hire people they would not have hired if they had known the full truth.

Finally, Professor Brown noted that Posner sometimes uses ‘wealth maximizing’ to mean increasing the welfare of society at large and sometimes to mean increasing the welfare of particular private parties. The two are obviously not the same.

This page was written by Michael Green for Freedom, Markets, & Well-being, PPE 160, Fall 2013. It was posted November 14, 2013.
Freedom, Markets, & Well-being