Privacy versus security

I'm not crazy about discussions of personal privacy which come down to moral positions, e.g., over whether it is right to listen to a personal conversation. We will never have a permanent position on this question, because it will always depend on the perceived threats society faces. This can be illustrated with a pair of hypotheticals:

1.) Suppose a very simple recipe for creating nuclear weapons became public, where the needed physical ingredients were easy to acquire, say, a bit of dirt, a coconut and a microwave oven. If this were the case, we would be much more vulnerable to the whims or anger of any of our citizens, and I think we would be okay with a greatly expanded level of surveillance. There would be a huge effort among image analysis software engineers to automate the process of detecting suspicious activity involving dirt and coconuts, presumably far beyond any kind of surveillance that the security establishment is executing today.

2.) Suppose ISIS and Al Qaeda were decisively destroyed, the Israeli-Palestinian conflict amicably resolved, and mild, inward-oriented democracies took root throughout the world. Should such a set of circumstances come about, we would feel more secure as a society, and value our privacy more than we do today.

These two scenarios are extremes, but it is certainly true that the world moves along a continuum of greater or lesser security over time. For this reason, I think we can assume that our sense of the right balance between security and privacy will never be fixed -- rather it will evolve as the world and our perceptions of the world change.

If we accept that our desire for privacy is going to be a changing quantity, then it is important that we arrange our security apparatus so that it can be controlled. In particular, if we allow lower-level engineers in the NSA and their counterparts in communications industries to freely implement surveillance as they see fit, then our decisions about the balance of privacy and security will be driven by the availability of surveillance technology and the group culture of the engineers who are actually designing and implementing these systems. Is this how surveillance is being controlled now? It's hard to say -- we know the NSA hid their activities from Congress. Perhaps the executive chain of command was aware of those activities, but if they weren't it wouldn't necessarily be public knowledge since admitting as much would be embarrassing for the nominal security establishment leadership.

If we are establishing a security apparatus which is driven by its own culture, then we are creating a machine which will be hard to change. Cultures change over time, but it is easy to imagine a scenario where the security establishment had its own culture that became very distinct from the culture of society, and if we have a surveillance apparatus which cannot be adjusted according to society's broader expectations, this could be a cause for our regret.

The way to avoid this is to establish rules for how surveillance will be conducted, and then enforce them. The rules already exist for the most part, but there does not seem to be much desire in Congress or the executive branch to make sure that these rules are followed. If the current rules are not suitable, we should craft new ones. Whatever rules we want to use, they need to be followed if we care about having the ability to reduce -- or expand -- our security apparatus in the future.

Bill Gross and Managing the Economy

A friend recently forwarded to me Bill Gross' thinking on the economy, and though I basically agreed with the policy recommendation to stimulate, I wasn't on the same page in the general view of long term trends and how we look at the economy in general.

He talks about the information age's impact on employment, but automation has been a constant feature of the economy for several centuries now, and there has been no discernible long term impact on employment. Yes, we no longer have 95% of the population working the fields, but the proportion of people working versus not has not been driven by technological advances. If you look at how employment has varied, far and away the biggest factor is the business cycle. It never happens that we are booming but with high unemployment, and it never happens that we have a recession with low unemployment -- there is a relationship here.

He also stands by his statement that central bank money control is equivalent to a Ponzi scheme. I'm not sure what to make of this terminology where he then follows it up by recommending heavy money printing. No one wants to knowingly participate in a Ponzi scheme, and it is a misuse of the language to use that term here. If one assumed that that central banks were hoping to lure the public into an emotional commitment to money and thereby through wanton printing trick them out of their hard possessions, then this terminology would make sense. But that is obviously not the case.

He also says that the piper must be paid eventually in the form of high inflation if we do go the money printing route. It's as if he considers this tool to be a switch which can only be turned on, and cannot be modulated. My sense is that if you have a reasonable view of history, you'll recognize that excessive inflation and deflation are both harmful and should be guarded against by any strategy of economic management.

I would like to see an inflation target which is reached via a combination of monetary, fiscal and tax policies. The logical link between our spending and our tax receipts is archaic and should be dropped. If the economy is running too hot, we should raise taxes and cut discretionary spending, regardless of our total debt or surplus. If the economy is running too cold, I think it would conversely be appropriate to cut taxes and increase discretionary spending, also regardless of the debt.