View source for Profit-Driven Surveillance and the Spectrum of Freedom

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[[Category:Matt Stoller]]
[[Category:Corporate Threats to Liberty]]
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{{URL | url = http://www.nakedcapitalism.com/2012/06/matt-stoller-profit-driven-surveillance-and-the-spectrum-of-freedom-we-will-offer-electronic-monitoring-services-in-every-state.html}}
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{{DES | des = [[Matt Stoller]] alerts us to the problem of profit-driven surveillance, and how corporations can make us pay for our liberties based on it. | show=}}
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Matt Stoller is a fellow at the Roosevelt Institute.  You can follow him on Twitter at http://www.twitter.com/matthewstoller

The question of civil liberties versus privacy carries with it an entire set of tired arguments and predictable political posturing.  The debate, however, is changing radically, because the capabilities to invade and control privacy have become extremely granular, and the profit motive has now changed the traditional actor in surveillance from the state to the private corporation.

Last year, the Wall Street Journal reported on new facial recognition technology to be used by police, in which a cop can use an iPhone to snap a photo of someone and cross-check that against a criminal database.  Developed to deal with insurgents in foreign wars, this technology applied domestic is predictably making civil liberties groups queasy.  But there’s a new wrinkle – the company that makes this technology says that “it will be sold only to law-enforcement agencies, although it is considering building applications for the health-care and financial industries.”

Health care and financial industries.  That is interesting.

Meanwhile, in Houston, two school districts are requiring students to wear electronic tagging badges formerly used on cattle. The badges “improve security and increase attendance rates, a figure that’s important because some school funding is tied to attendance.” Students are often attending a different school, while marked absent, and these devices allow funding models to more accurately flow funds. These devices impose a novel degree of surveillance on young adults, observing where they go, with whom they spend time, for budgetary reasons.

Profit-driven surveillance does not starts and stop with young adults. It is, in fact, becoming pervasive. The main theme of a recent IBM consulting document on the future of the insurance industry is how much more money an insurance company can make if it tracks and tags its customers. This is particularly true for auto insurance companies, some of whom like Allstate and Progressive are experimenting on new technologies. For instance, IBM suggests that “A “pay-as-you-live” product would trade some location and time-of-day privacy data for lower insurance bills overall.”

IBM is recommending these companies stick a sensor in your car, measure where you go and when, your speed, acceleration and deceleration, etc. The progression over time could be to withdraw traditional insurance products, so that you won’t be able to get an insurance product without sensors attached. As this presentation offers, “The aforementioned rising tide of technology also empowers insurance underwriters to bring their products closer to realtime interaction via sensor networks and enlightened privacy regulations.”

As Michael Lewis has noted in articles and books on Wall Street and sports, you can slice and dice a mortgage into its component interest rate segment and principal. You can build a baseball team based on aggregating and disaggregating statistics. This kind of analysis is relatively new, a reconstruction of the world based on atomistic level quantitative attributes. For instance, you can track geographic areas based on cell phone relationships rather than borders. Financial engineers believe they can pretty much put a price on anything (whether those prices are any good over time is another matter). So what is your freedom worth? You need air, water, food, and relationships to survive. You want to go shopping, to the movies, to see friends. You have kids, romantics attachments, familial obligations. You like being able to travel, to explore, to watch TV. You need medical care. What are each of these worth? It’s a question that analysts are thinking about.

It’s not just sensors in your car – insurance companies are modeling tighter and tighter risk chunks. IBM goes on, saying that new products “will facilitate “just-in-time insurance” as a person moves through a set of “spaces.” Each step of the journey represents a different risk such as car-to-train-station, train-to-city-station, station-to- office, and so on. Each leg of the trip truly represents a varying amount of risk.” Tracking these movements could require nothing more than downloading an app on a smart phone, or some other device. But it is literally the application of financial engineering to your very liberty, or the toll-boothing of your life.

There are innovations in injustice that could accompany these products. Traditional illicit corporate profit-taking has been about denying certain products to segmented groups of people – segregation in housing, lower quality of medical care for ethnic and gender groups, predatory lending etc. But technology has now opened up a new model of profit-taking – if a company knows where you go, who you talk to, what you buy and eat, and your medical history, then it can charge you premium pricing by denying you exactly what *you* want. It can bypass your ethnographic group, and focus on tolling off component parts of what you as an individual want.

Imagine a new financial product targeted at people who have defaulted on debt and have a history of avoiding debt collectors. It’s a new kind of credit card, by a bank, which offers a reasonable rate of interest. You don’t have to put up cash or collateral. You don’t have to pay on time. The catch is that the financial institution requires that you wear a small tracking device on your ankle, so that their debt collection department knows where you are at all times. And if you violate the terms of service, the device blares out messages from debt collectors, wherever you are. The device could also be set up to blare out messages whenever you enter a “restricted zone”, say, a shopping mall or a store that the bank has put off limits to you.

Or imagine that a corporation decides that new employees must wear one of these for the first 30 days of employment, to ensure that he or she isn’t tardy, and to more accurately clock people in and out of work. The technology exists, and is being marketed, by private corporations. And it is being used by private corporations everywhere in America, to track tens of thousands of people. I drew this example from a specific device that could do this is called the ExacuTrack One) – the web page describing its technology leaves open all sorts of chilling possibilities. The reason you haven’t noticed is because these products are tracking prisoners, ex-felons, and people on parole.

This specific technological application is an outgrowth of a part of the for-profit prison industry, the for-profit parole segment. This industry, by design, is based on profiting by denying freedom to groups of people. And the more freedom denied, the more profit. Prisons are a blunt instrument in terms of restricting movement; parole is more like quasi-freedom. Sensors to track parolees can blur into sensors used by insurance companies to lower your premium or cattle tags to track students for better school district accounting. And selling tracking gear is the strategy pursued by the multi-billion dollar for-profit prison company Geo Group to differentiate itself from the more traditional “lock ‘em up and profit” competition. The Geo Group doesn’t just own and operate “beds” for prisoners, it has done what any good management consultant would tell a company to do in an expanding market with a lot of different customer needs: diversify its product offerings.

Prominent in the Geo Group’s annual report is what the company calls its “Continuum of Care Services” strategy. In December of 2010, Geo Group bought an electronic tagging company called BI Incorporated. Here’s how the company explained the deal.

Founded in 1978, BI is the largest provider of comprehensive electronic monitoring services with a full complement of technologies, including radio frequency and global positioning system equipment, voice identification, and remote alcohol detection systems, which track more than 60,000 offenders on behalf of approximately 900 federal, state, and local correctional agencies located in all 50 states.

It is tracking 60,000 people. And in the company’s 10K, the company wrote that, “following the BI Acquisition,” it “will offer electronic monitoring services in every state”. So it’s everywhere in the US. Its business solutions are unique. For instance, BI has an “exclusive contract with U.S. Immigration and Customs Enforcement, which we refer to as ICE, to provide supervision and reporting services designed to improve the participation of non-detained aliens in the immigration court system.” This means that the company is in a regulatory role over the behavior of large groups of people, who are not in prison. The Geo Group can now “offer turn-key solutions to our customers in managing the full lifecycle of an offender from arraignment to reintegration into the community, which we refer to as the corrections lifecycle”.   Again, this is the language of a bureaucracy of management, transmuted as easily from one industry to another.

Check out BI’s website; it is selling to State Departments of Corrections, parole departments, sheriffs, county executives, pretrial and probation officials, and judges. That’s a lot of customers. The company has a blog which answers such helpful questions as “What type of criminal defender should be on GPS tracking?” (every type of offender, as it turns out, including “juveniles”). There’s a products page, which looks like a demented Sharper Image catalogue.

The Geo Group now operates a whole host of corrective services, including prisons, youth prisons, psychiatric hospitals, electronic tagging, parole services, and secure airborne and ground transportation of prisoners. It also has facilities in the UK, South Africa, and Australia.

Mike Konczal picked up a 2007 report from the American Legislative Exchange Council (ALEC) on the push to privatize parole, or “community reentry services”. It’s not a surprise that privatization advocates would want to do to parole what they did to prisons. The question, though, is why a for-profit prison industry seek to push people out of prison?

The answer is, it depends on how much money you can make money by tagging and tracking people. The embedding of the profit motive into the criminal justice system is a profound shift in how we govern ourselves. That a private corporation has better data on tracked offenders than the 900 Fed and local jurisdictions it serves is potentially a threat to sovereignty. It means that traditional powers held by the state are now being moved into a whole host of actors, a kind of soft authoritarianism in which you can vote for politicians but the corporate entities that track and tag your freedom are impervious to social pressure.

It’s not too hard to imagine these services and products being sold to private actors to track employees, debtors, dissidents or anyone else.   The plans are already laid out.  Corporations are already tracking Facebook accounts, have extremely detailed information on financial and web usage, and frequently use credit checks before hiring someone. This is all an increase and broadening of coercive techniques in managing human resources.

This shouldn’t be shocking to those who have studied real American history -American corporations used to have their own quasi-military forces. Congress even set up an anti-Pinkerton law; Pinkerton was the Blackwater of the 19th century, and was used to break strikes back when that meant gun battles, rather than showing anti-union video tapes to new employees.

In fact, whether you are tracked because you get a discount on your auto insurance or whether you have broken some arbitrary rule or fit in a non-mainstream class of person, innovation in technology and autocratic organizational forms means that there will be a whole new category of constraints on freedom.

It is very much like the plain vanilla loan, which could be held by banks, being disaggregated into its component parts and sold to investors with varying degrees of risk. This then led to investors demanding more exotic loan products whose risk attributes they wanted to own. This can happen with human freedom. Based on what you are willing to pay, how much power you have, and your desires, our culture will begin offering extremely granular freedom zones.

Many people think that the current Supreme Court and political arrangement means that America is heading back to a 19th century political economy, with 21st century technological possibilities. Thinking about for profit prison and parole companies combined with GPS is a way to imagine what this might look like. When you layer on the clear trend of insurance companies that seek to track you with sensors, and school districts who want to track kids for accounting purposes, it’s becoming increasingly clear that the systems we’ve set up to run our society are increasingly, well, running our society.

The financial engineering of component parts of freedom, and the removal from the state of the monopoly rights to track and/or restrict movement, represents a novel form of social organization. It could be nothing less than a new form of authoritarianism, a soft version in which there are political choices and a measure of openness, but a jello-like network of corporate cartels holding power. In this society, you’ll get whatever zone of freedom you can pay for, and if you can’t afford any freedom, you won’t get any.


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