The problems of a surveillance state become more obvious when you understand information as a resource that governments exploit.

One of the misleading ways in which governments frame debates involving national security is to pretend that they’re in the business of keeping secrets, and that information is either secret — securely controlled within government — or it isn’t.

In fact, governments are less interested in protecting secrets than in exploiting the value of information in their own interests. The obvious example for this is that official national security leaks by governments are a key tool of politics, while unofficial leaks are deemed criminal.

The main difference between unofficial and official leaks is that there is considerable evidence that official leaks have caused direct harm to individuals and little evidence unofficial leaks have caused harm. Recall, for instance, leaks designed to demonise Mohamed Haneef here in Australia in 2007. Last year, a US Congressional sub-committee detailed the serious harm resulting from a number of leaks made by Obama administration figures to favoured media outlets. Indeed, at its outset, the Obama administration leaked national security briefings to journalist Bob Woodward that revealed potentially damaging information.

The leaking of highly classified intelligence was also a key part of the Bush administration’s fabrication of a casus belli for the invasion of Iraq, which a decade on now has a body count in the hundreds of thousands.

In contrast, the harm from the material leaked by soldier Bradley Manning or NSA surveillance whistleblower Edward Snowden, persistently claimed by their critics and the US government, has never been demonstrated. Indeed, although the US government is still trying to prosecute Manning for aiding the enemy, senior officials admitted to Congress after The Guardian, The New York Times and WikiLeaks ran the diplomatic cables leaked by Manning that the main consequence was embarrassment for the United States, not actual harm.

In short, information has value, and governments seek to exploit that value for political purposes, just as they use other resources for political purposes. It’s time we took the term “information economy” from bureaucrats, consultants and internet evangelists and used it to see information as an economic resource, and thus tried to understand how governments, corporations and individuals use it.

The economics of information have undergone a radical change in the last 30 years, as digitisation and the internet shifted information distribution from a system based on grams per square inch and physical delivery to zeroes and ones and online delivery, which has made large amounts of information substantially less secure and massively easier and cheaper to store and distribute. This has flattened traditional information hierarchies that exploited the value of information, reducing the advantages large institutions have held over smaller ones and individuals, whether it was governments trying to keep secrets or media companies trying to maintain their gatekeeper status and business models in the face of internet search and filesharing.

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“And while governments have been on the wrong end of this information flattening, they’ve also developed tools to make it work to their advantage.”

This won’t have quite the disruptive effects of the invention of printing: the impacts of printing, which standardised and corrected texts, radically expanded the number of readers and writers, changed the way we absorb information and enabled a critical mass for permanent intellectual innovation, took hundreds of years to play out. The internet merely completes this process; the availability of huge amounts of information online won’t have the same impacts compared with 20th century literate culture as the availability of huge number of standardised books had compared with mediaeval manuscript and oral culture.

And while governments have been on the wrong end of this information flattening, they’ve also developed tools to make it work to their advantage. They’ve created a literal information economy in which thousands of companies generate additional information for governments through surveillance, data aggregation and cybercrime (the United States government is the world’s most successful cybercriminal). They’ve exploited the physical and commercial bottlenecks of the internet — undersea cables and the biggest software, search and social media providers — to vacuum up internet data, filter it and aggregate it.

Unlike corporations, governments tend not to monetise aggregated personal data, but nonetheless aggregation makes it more valuable for them, particularly in relation to the targeting of individuals who pose a threat. The nature of the threat — whether it’s a terrorist who might undertake an attack, activists who might draw public attention to something governments are embarrassed about or offend significant corporate interests, or journalists who might subject governments to scrutiny — is in this context irrelevant.

This swings the information advantage back toward governments. Successive US administrations, and especially the Obama administration, have sought to hide this by keeping internet and phone surveillance as secret as possible, constructing an entire shadow legal system out of public or political gaze to wave through repeated extensions of surveillance powers (in contrast, for example, Australia’s Senate has repeatedly waved through extensions to surveillance powers, but in full public view). This quest for secrecy has also been reinforced by a ruthless exploitation of the full legal powers of the US government to attack whistleblowers, activists and journalists.

This secrecy was difficult to permanently maintain, even with senior officials willing to lie to Congress; one whistleblower has revealed the vast nature of the shadow system, and now many in the US Congress are arguing that legislative limits have been exceeded, but it has held up for over a decade.

*Tomorrow: if you take the logic of information as a resource seriously, you start to see the profound damage it can cause when coupled with profound secrecy