In this article, we cover stated preference and revealed preferences, and using these ideas, we explain how the concept of privacy is dead and valueless today.

Baidu chief Robin Li said in March, 2018, that Chinese internet users are willing to sacrifice privacy for convenience (Chen, 2018). I would go further; we as a species, in the 21st Century, just don’t care about our privacy anymore.

We will say we care; our behaviours suggest we don’t. I will ask someone “Is privacy an important right?” and they’ll respond yes, before checking out Facebook on their Apple phone, or using WeChat on their Huawei phone.

Privacy is dead; its market price is $0. It has few buyers; around 90% of people say they want it, but 90% of people also carry a listening device in their pocket while they say it.

Stated and Revealed Preferences

There is an idea of how to measure how much we value things without a market value. One of the problems in analysing public policy is measuring the advantages and disadvantages of different policies.

We’ve discussed some of the underlying theories already: Rawls and Utilitarians argue for the improved utility of society (or the most needy) as valued, whereas Nozick and Smith argue for efficiency and liberty of society as valued.

But what about non-monetary measures? All of the above articles cover universal basic income; a monetary policy. What if there is no monetary value that is obvious? What if we want to measure the cost of air pollution in Beijing per person via the effect on their health? What if we want to measure the psychological cost of depression and the various treatment methods? This is why social scientists have developed the Stated Preferences and Revealed Preferences models.



Stated Preferences are simple to understand. People state how much they would value a non-monetary good. We effectively already do this; every time you ask your friend to pick a hypothetical (The famous Chinese question from girlfriends is “If I and your mother were in a whirlpool, who would you save first?”).

Revealed Preferences is when we measure what people actually do in the freedom of life; not what they say, but where they decide is the most efficient use of their own resources or preferences. As they say, people are who they act like when they think no one can see them.

Examples:

For example, people state anger at the idea of Cambridge Analytica legally accessing and using their data from Facebook to manipulate them for differing political parties (Menand, 2018). The Senior Editor of National Review, Ramesh Ponnuru (2019) suggests that if Facebook were to actually offer a privacy protected package for $10 a month, there’d likely be less than 0 uptake.

Using this example, people say that they want privacy, but then they use Facebook, Apple, Huawei, Google, WeChat, WhatsApp, and lose all of that privacy for the convenience of using these apps.

Socialist Senator and Presidential hopeful Bernie Sanders states that tax rates should be 45% on those making over $500,000 (Sanders, 2019). As he and his wife made over $1 million in both 2016 and 2017, he would pay at least $450,000 each year, surely? (Pramuk, 2019). Well, he only paid 28% in federal state taxes (Kaplan, 2019), and the highest rate for Vermont is 9.4% (Department of Taxes, 2019).

Bernie Sanders states that wealth is immoral. His income is among the 1% of the country (let alone the planet) (Kaplan, 2019).

Using this example, Bernie states he would like the wealthy to pay a 45% tax, but reveals that he would only be willing to pay about 37% in taxes himself.

He states he hates wealth. He reveals that he enjoys being wealthy and then keeping it for himself and his family.

The World, Google, and Facebook

How much do people state they want privacy? The Pew Research Centre found that 93% of American adults felt being in control of who can access their information was important; 74% felt it was very important. 90% of American adults feel what is collected about them is very important. 88% believe it is very important that they are not watched or listened to without their permission (Madden and Rainie, 2015).

However, revealed preference is different: 91% of people surf the internet without a VPN or any other kind of service to protect their information, 90% of people text or phone without encryption, 76% provide truthful information when asked online (Madden and Rainie, 2015).

We don’t have to figure out if Facebook and Google takes your data; Curran (2018) outlines the millions of pages of data collected on you by these companies. Snowden (2019) reveals that the massive legal document you sign to sign up? That was you agreeing to let them spy on you.

That phone you carry? Edward Snowden (2019) reveals that everywhere you go with that phone is collected by the NSA. We hear stories weekly of data being breached, or companies and governments spying on us? Do we stop buying Apple phones? Do we stop using apps like Facebook, Google, or YouTube? Mostly, no.

So people are surely not using these privacy invasive goods? Well, 250 million people use Facebook in the U.S. and Canada. Well, surely that’s just the old people who don’t understand? Well, actually, the largest group was 25-34 year olds (Statista, 2019a). What of smartphones? Well, the U.S. has 270 million people who use these kinds of phones, of which half are iPhones (Statistica, 2019b). And Alexa, the listening device? 100 million American homes have one (Sterling, 2019).

To summarise American stated preferences; around 90% of Americans want privacy and feel it is important. However, the American revealed preferences are that nearly two thirds of Americans and Canadians use Facebook. Over 80% have a smartphone that likely invades their privacy. Around one third of Americans have a listening device in their house. In the case of smartphones and Alexa, they paid for the privilege.



China and WeChat



In China, 1 billion people use WeChat; it handles your messages, it is one of two online payment systems, and acts as a social media platform (Kharpal, 2019). It has market penetration of about 92% in tier one cities, 83% across all Chinese users (Chen, 2018).

It also works with the Chinese government; information is tightly controlled and regulated on the app, which requires said regulation from the Chinese government. To access it, your personal information must be provided (McDonnell, 2019). It is outlined in the privacy settings to hand all information to the Chinese authorities, and WeChat does not use encryption to allow the Chinese security authorities to access all information on the app. WeChat itself states that it does not share information with the Chinese authorities. (Chen, 2018). Let see from WeChat itself: