libertarians, the new web (including Web 2.0), and privacy–what’s our framework?

I tend to think of libertarians (myself included) as being a pretty private bunch. Freedom-lovers, distrustful not just of government but just generally skeptical of other people holding, or potentially holding, power over them of any kind. I do, however, appreciate efficiency in operation. So it is with a mixed heart that I approach the new movement in web applications, including Web 2.0.

Is there any doubt of the utility of a tool such as Google Docs? The easy ability to access and manipulate documents from almost anywhere with an Internet connection is quite seductive from an efficiency standpoint. Google’s privacy policy states:

Content. Google Docs & Spreadsheets stores, processes and maintains your documents and previous versions of those documents in order to provide the service to you.

Ouch. In an age when the government may have more access to Google than it does to your home PC, how safe does Google’s Privacy Policy make you feel? On the one hand I feel safer providing my information to a market participant than the government–if the government started a “Google Docs” service, you wouldn’t see me using it. On the other hand, I have a lot more control over documents that stay on my home computer–if I want to erase them in a secure fashion I can do the research to obtain the proper software tools for the job, and feel more comfortable that it is done than I am hearing the word of anyone from Google.

But maybe you just keep your sensitive documents off Google and find other mechanisms, or maybe for what you would use Google Docs for there really isn’t a substantial personal privacy concern. But the trend is growing, so let’s up the ante . . . what about the next generation of online applications that will take on programs such as MS Money and Quicken? Mint.com, Yodlee, Wesabe, or even a good old-fashioned spreadsheet you maintain on . . . Google Docs. For a nice blog post on such services, try 6 Great Free Alternatives to Quicken & MS Money at Zen Habits.

So, wait, they want me to import my financial data into their servers? On the one hand–Yippee! The chance to see what young, innovative entrepreneurs can do in programming for personal financial software is I believe going to bring great competition to this field. For example, Wesabe takes your financial data and integrates it into some social-networking-style components (from Zen Habits):

Even more interesting is the social part: based on your tags, you can see how others spend on similar tags, and see their best tips for that type of tag.

The next generation in comparative shopping? As I said, the application of the best and brightest minds in new and innovative ways is exciting.

But, uh, wait, you want me to upload my financial data and you have the tools to analyze and data mine it? That is quite a trade-off. On one hand, unlike my documents I know that the government has, legally or otherwise, access to all my financial data no matter where it is, so if I am afraid for the privacy of my financial data for the government my options are limited as it seems there is no legitimate option for avoiding their prying eyes. So I don’t know that it heightens my concern in that area any if I am also storing my data with a third party. On the other hand there are dangers other than the government. If I store my financial data on my computer I can secure it to the extent I deem necessary within the limits of my expertise and that of the programs I install. But these services have experts in computer security whose tools and capabilities far outstrip my own. No one is as motivated to keep my financial data secure and private as I am, but keeping one’s job and reputation can be a decent motivator itself–I imagine these services go the extra mile to address the security of data from both internal and external threats.

Beyond that, the type of breach that seems most likely to occur is one of mass theft rather than individually-targeted intrusions. In other words, I admit that I have never felt particularly unsettled upon hearing that a thief has stolen 3 million records that include personal confidential information that may include my information. On the one hand, sure, that’s bad, but on the other hand the chance that it will affect me is statistically less than perhaps other types of concerns towards which it would be more productive to direct my energies.

Maybe it’s just a generational thing–it took my parents years before they would even make a single purchase online, and the concept that they would entrust their financial data to an online personal finance company? PREPOSTEROUS! The generations after me? It’s second nature. I don’t even know that 99% of them give the first thought to this type of online privacy and security. It’s the only society they’ve ever known, and so it integrates seamlessly. I suppose a challenge for some of these new services is finding ways to reach the older crowd.

And these are just a couple of areas of the new Web world–these applications will soon be everywhere, touching every part of our lives, and I’m not even hitting the big ones such as MySpace and Facebook (whose privacy concerns have been covered significantly more completely elsewhere). I don’t know that I’ve come to a satisfactory answer yet, at least not one rooted in a consistent principle. I use Facebook, but I also use Open Office or MS Office rather than Google Docs despite the fact that for my personal use I could probably use any. I am intrigued by services such as Wesabe and Mint, but not enough to try them yet, despite the fact that I use a Kroger Plus card and a variety of other electronic services that already track my purchases.

I put all this up because I do, at least in the abstract, value my personal privacy, but as time goes on I find that efficiency tends to win out–and this from a person whose identity has been stolen once. The police actually caught the guy, too, because, strangely enough, although this was several years ago our bank did offer online banking. We knew someone was using my debit card because we could see the purchases posting online, and my wife was calling these places giving them hell for not checking signatures. Finally we saw a new one posted and she said “Here, I’m tired of calling, you call this place.” So I call and speak with the manager and he says “That guy just left the store, I think he’s still in the mall, hang on.” It’s quiet for a minute, but when the manager gets back on the line he says he’s put mall security on the individual and they end up catching and prosecuting him! Technology is enabling, and efficient, and scary, and I have no developed framework for categorizing risk vs. efficiency in these areas. Feel free to help me out with your ideas in the comments section.