The Conversation

How do you feel about privacy?

Photo:Frédéric Bisson. Source: Flikr. CC-BY-2.0

Back in the 1974, Francis Ford Coppola directed a film called “The Conversation,” a cult classic starring Gene Hackman about a surveillance expert and the moral dilemmas he faces. In the end, the expert becomes the subject of surveillance, receiving a call on his unlisted phone at the close that plays his own conversations back to him and says, “We’ll be listening,” just before hanging up. Hackman tears his home apart looking for the bug. When he can’t find it he sits alone in the gutted apartment, playing a jazz saxophone.

We live in a sea of data, from our purchases, our travels, our phone calls, our social activity. The phone company – through smartphone GPS – knows where we go and what calls and texts we make; Google knows what we search for and what we click when we search for it, who we’re emailing and the what’s in those emails; Facebook, LinkedIn, and Twitter know who we’re connected with and what we like; and Amazon and other retailers know just about everything we buy.

This new world is one of “data capitalism,” where giant platforms collect, collate, and curate our personal information to provide the goods and services we need – for a price. Of course, part of the price is money. But a big part of the price is more data. The Journal of the American Medical Association studied 75 diabetes apps. Less than a quarter even had privacy policies, and some of those allowed the app to access contacts, photos, and even activate the camera and microphone. We want the benefits of mobile medicine, but we don’t know the cost.

Illustration: C. Frank Starmer. Source: IT Lab. CC-BY-3.0

Industrial capitalism needed physical capital to create wealth: mills and mines and machines built the infrastructure that made our economy. Then information capitalism used processers and routers and cables, linking the world together as never before. The “Facebook Effect” was a best-selling book as well as a way for people to connect, organize, and bring about change. Recently, laid-off employees at BuzzFeed were able to demand – and get – paid for unused vacation days due, in part, to an open letter on Medium with hundreds of signatures that went viral.

But data capitalism is more. It monitors our behavior as it runs continual experiments, analyzing the results to provide more personalized and customized services. Think of Netflix offering up new shows and movies. When you watch them your viewing creates data. And what you ignore is data, too. That data becomes useful for developing the next offering and the next and the next. No wonder Netflix spent $13 billion to acquire streaming rights last year – a year when they only had $16 billion in sales.

Data capitalism is at the heart of our surveillance economy, one that raises moral and ethical issues about who owns the data and what can be done with it. Bots and trolls play havoc with democracy, while we enjoy free apps. No one knows where this is going. But what we do know is, “They’ll be listening.”

Photo: Jimmy Baikovicius. Source: Wikimedia

Douglas R. Tengdin, CFA

Charter Trust Company

“The Best Trust Company in New England”

By |2019-02-18T22:05:54-04:00February 18th, 2019|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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