Connecting the Dots

×

Connecting the Dots, Patrick Watson’s online newsletter, now lives exclusively on the Mauldin Economics website.

Please bookmark this page so you can always find his latest take on the geopolitical, cultural, and technological forces decentralizing and disrupting the global economy.

Privacy Is Dying, Like It or Not

April 24, 2018

The funny thing about breakthrough technologies is that we rarely see the break. They tend to sneak up on us. Every now and then, something revolutionary comes out of nowhere, like the iPhone in 2007, but it still took a few more years to take off.

The other thing that changes slowly is us. Technology modifies our attitudes and beliefs so gradually that we don’t realize it’s happening, but the changes are real and usually permanent.

Just a few decades ago, it was unthinkable to share the kind of personal images and information many of us routinely show to strangers today. Internet access and social media have radically changed our attitudes about privacy.

This evolution has economic and investment consequences that we’re not always aware of.


Photo: Getty Images

Eyes in the Sky

Aside from the now-ubiquitous mapping services, satellite imagery helps businesses from farms to shipping companies run more efficiently.

The photos got even more useful when Google Earth began offering 3D versions that made it possible to assess topography.

Almost everyone, however, is still missing the fourth dimension: time.

Most publicly available satellite images are weeks or months old, sometimes even years. That means there’s a lot of untapped potential. Being able to see live satellite images of some faraway location would certainly be useful—though technically it’s hard because low-orbiting satellites can’t hover over one spot like a drone or helicopter.

The latest idea: deploying large numbers of small, inexpensive satellites. Get enough of them up there, and one will always be in range.

Last week, a Bellevue, Washington startup called EarthNow announced plans to deliver real-time satellite video of almost anywhere on the planet.

EarthNow is not someone’s garage idea. Its investors include Microsoft founder Bill Gates, Japan’s Softbank Group, and European aircraft maker Airbus. Raising capital won’t be a problem.

The company’s website lists some possible applications:

  • Catch illegal fishing ships in the act
  • Watch hurricanes and typhoons as they evolve
  • Detect forest fires the moment they start
  • Watch volcanoes the instant they start to erupt
  • Assist the media in telling stories from around the world
  • Track large whales as they migrate
  • Help “smart cities” become more efficient
  • Assess the health of crops on demand
  • Observe conflict zones and respond immediately when crises arise
  • Instantly create “living” 3D models of a town or city, even in remote locations
  • See your home as the astronauts see it—a stunning blue marble in space

All very nice, but there’s a dark side to this too.


Photo: Getty Images

Au Naturel

Real-time satellite imagery of the whole planet means all of us will be on camera any time we step outside. That’s kind of chilling.

Yes, it’s already possible to locate people via their smartphones, but you can stop that by ditching the phone. The satellite, on the other hand, will still see you or your car wherever you may go.

This will have benefits. For example, police could solve crimes by simply rewinding video to track everyone at a crime scene. However, a more malicious government could use it to silence dissidents or journalists.

For EarthNow, your lost privacy will be a revenue opportunity. Its press release says, “Initially, EarthNow will offer commercial video and intelligent vision services to a range of government and enterprise customers.”

They’re also careful to say their video will cover almost anywhere on Earth. You can bet the US government will redact sensitive places. The Pentagon won’t let anyone reveal whatever the heck it’s doing at Area 51.

The rest of us will get less consideration. If you like au naturel sunbathing, you can still do it—but more than just the sun may be watching you.


Photo: Getty Images

We Don’t Mind

Combine this new snooping technology with the ones we already face, such as Facebook’s data gathering, and having any semblance of privacy is getting harder.

I think this won’t change, because most people don’t mind.

Intentionally or not, we’ve decided the benefits we get from sharing our personal lives outweigh the costs. We like…

  • Staying connected with friends and making new ones online
  • Having our phones direct us to restaurants whose menus match our tastes
  • Getting custom movie recommendations based on our viewing history

These little conveniences are slowly embedding themselves in daily life. Millions of people now have Amazon Echo and other audio devices in their homes. The little boxes don’t listen all the time… but we’re being prepared for the day when they will.

And we haven’t even talked about non-satellite video. Security cameras are now common in public places and increasingly in homes. Have we seriously considered whether their benefits justify making everyone an involuntary video star? No. It’s just happening.

I think we’re now beyond such debates. The genie is out of the bottle and not going back in. The trend will keep rolling, whether you like it or not.


Photo: Getty Images

Paying the Price

So, as time goes on, our lives will be increasingly open to everyone. We will share more personal info and expect others to do the same. Everyone will watch everyone else. What does that do to the economy?

For one, the same trend affects businesses. They’re already having a hard time protecting intellectual property. As John Mauldin wrote last weekend, some companies voluntarily give their valued secrets to the Chinese government, which gives them access to the Chinese market in return.

That’s the corporate equivalent of the deal web users make with Google. Give up your info and get something back without spending any cash. It will keep happening.

Another consequence of using data as a currency: these transactions have value that may not show up in GDP, but it’s not as negligible as you may think.

It also suggests one way to at least slow down this process: stop demanding free stuff. If you really value something, buy it with cash. If the seller won’t take cash, then maybe you don’t need it.

But that will be a temporary solution. The reality is that our concepts of privacy and modesty have changed radically and will change even more. Companies that admit this reality will probably be better investments.

You may not like what they do, but they’ll make money doing it. Pay attention.

See you at the top,

Patrick Watson

P.S. If you’re reading this because someone shared it with you, click here to get your own free Connecting the Dots subscription. You can also follow me on Twitter: @PatrickW.

Discuss This

0 comments

We welcome your comments. Please comply with our Community Rules.

Comments

fordot@outlook.com

May 3, 9:43 p.m.

For those of us who value our privacy and value fundamental rights there should be options and protections. I would never advocate just rolling over. Arguments have to be made against the sentiment that if you want to keep your information private your are hiding something and if you are hiding something you must be doing something wrong. No - it does matter how all of these new access channels are used and there has to be an agreement that includes those who want to maintain their privacy.

slucebiz@pobox.com

April 24, 1:42 p.m.

You didn’t mention that Europe is implementing GDPR. The USA should do the same. There’s a lot of space between giving the individual complete control of their data and letting Facebook, Google, etc. do whatever they want. Also, we don’t even know what data they are gathering or what is being done with that data.

Andrew A. Paterson

April 24, 11:32 a.m.

People’s use of technology does indeed change privacy and is already being used by government to ‘nudge’ behavior. Wired magazine had a lengthy article earlier this year describing in detail the Chinese use of cell phones and credit cards to ‘encourage’  the politically correct [conformist]  behavior [and associations] it had gotten millions of people to enthusiastically adopt.  A very real 1984’s arrival in China.  Worth a read and fits right in with real time satellite observations. Privacy is definitely dead.

JAMES HUEBNER

April 24, 9:18 a.m.

You must be JOKING when you say PRIVACY doesn’t matter! The Right to Privacy is one of the most
important Aspects of Life! JVH MD


Use of this content, the Mauldin Economics website, and related sites and applications is provided under the Mauldin Economics Terms & Conditions of Use.

Unauthorized Disclosure Prohibited

The information provided in this publication is private, privileged, and confidential information, licensed for your sole individual use as a subscriber. Mauldin Economics reserves all rights to the content of this publication and related materials. Forwarding, copying, disseminating, or distributing this report in whole or in part, including substantial quotation of any portion the publication or any release of specific investment recommendations, is strictly prohibited.
Participation in such activity is grounds for immediate termination of all subscriptions of registered subscribers deemed to be involved at Mauldin Economics’ sole discretion, may violate the copyright laws of the United States, and may subject the violator to legal prosecution. Mauldin Economics reserves the right to monitor the use of this publication without disclosure by any electronic means it deems necessary and may change those means without notice at any time. If you have received this publication and are not the intended subscriber, please contact service@mauldineconomics.com.

Disclaimers

The Mauldin Economics website, Yield Shark, Thoughts from the Frontline, Outside the Box, Over My Shoulder, Transformational Technology Alert, Rational Bear, The 10th Man, Connecting The Dots, Stray Reflections, Street Freak, ETF 20/20, Macro Growth & Income Alert, In the Money, and Mauldin Economics VIP are published by Mauldin Economics, LLC. Information contained in such publications is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. The information contained in such publications is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. The information in such publications may become outdated and there is no obligation to update any such information. You are advised to discuss with your financial advisers your investment options and whether any investment is suitable for your specific needs prior to making any investments.
John Mauldin, Mauldin Economics, LLC and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. Corporate policies are in effect that attempt to avoid potential conflicts of interest and resolve conflicts of interest that do arise in a timely fashion.
Mauldin Economics, LLC reserves the right to cancel any subscription at any time, and if it does so it will promptly refund to the subscriber the amount of the subscription payment previously received relating to the remaining subscription period. Cancellation of a subscription may result from any unauthorized use or reproduction or rebroadcast of any Mauldin Economics publication or website, any infringement or misappropriation of Mauldin Economics, LLC’s proprietary rights, or any other reason determined in the sole discretion of Mauldin Economics, LLC.

Affiliate Notice

Mauldin Economics has affiliate agreements in place that may include fee sharing. If you have a website or newsletter and would like to be considered for inclusion in the Mauldin Economics affiliate program, please go to http://affiliates.ggcpublishing.com/. Likewise, from time to time Mauldin Economics may engage in affiliate programs offered by other companies, though corporate policy firmly dictates that such agreements will have no influence on any product or service recommendations, nor alter the pricing that would otherwise be available in absence of such an agreement. As always, it is important that you do your own due diligence before transacting any business with any firm, for any product or service.

© Copyright 2018 Mauldin Economics