Too Much Information

Tyler Cowen recently linked to a short essay by Stuart Armstrong on the benefits of a surveillance state:

Maybe we should start preparing. And not just by wringing our hands or mounting attempts to defeat surveillance. For if there’s a chance that the panopticon is inevitable, we ought to do some hard thinking about its positive aspects...If calibrated properly, total surveillance might eradicate certain types of crime almost entirely. People respond well to inevitable consequences, especially those that follow swiftly on the heels of their conduct.

This is interesting stuff and he touches upon some important insights: perfect monitoring of someone's movements would make enforcement of all sorts of contracts easier, as compliance or breaches would be easily observed.  I think an important consequence of this would be greater prosperity: resources that are currently wasted on signaling due to asymmetric information (e.g. carefully nurturing good credit scores to prove one's responsible lifestyle choices) could simply be replaced by a glance at the surveillance record. Moreover, prices of information-sensitive products, such as insurance, could be better adjusted to the true risk of an individual, as more information would improve the accuracy of the risk assessment.

However, I also think that there is a major drawback to increased surveillance that might outweigh all the positives that Armstrong touches upon: The abuse of the information by those doing the surveilling. There are a lot of laws on the books that are rarely enforced (e.g the prohibition of wagering more than $2000 in a day between friends in Virginia), but that would - given the ability to find out minute details about everyone's lives - enable someone to punish almost anyone if they chose to enforce them. This kind of selective enforcement by government officials is  a real threat - not necessarily as a matter of top-down policy, but rather as the result of power and temptation in the lower ranks (think "surveillance officer finds that his ex-wife's lover does not obey the rules on kissing with a mustache and sends him a SWAT team").

Interestingly, Armstrong sees this problem from the opposite angle: as surveillance makes everyone liable to enforcement of these laws, he thinks that they will be swiftly abolished, thereby increasing personal freedom:

But if everyone was suddenly subject to enforcement, there would have to be a mass legal repeal. When spliffs on private yachts are punished as severely as spliffs in the ghetto, you can expect the marijuana legalisation movement to gather steam. When it becomes glaringly obvious that most people simply can’t follow all the rules they’re supposed to, these rules will have to be reformed.

My instinct tells me that this is overly optimistic: instances of government authority becoming overly burdensome and therefore being promptly abolished may exist, but they are rare, to say the least.