Blame it on Paul Samuelson. Among his insights into economic behaviour is the ‘theory of revealed preference’ that says buying actions are the best marker to a consumer’s mind. If you are reading this, you have revealed your preference for Hindustan Times, a fact of vital importance not only to its publisher but its rivals as well. Till the internet came along, marketers had very sketchy data — newspaper subscription being a rare exception — about buying preferences for anything from automobiles to zip fasteners. Physical polling was laborious, inexact and expensive. Actual sales were the salesman’s best data set. Online interactivity on the other hand has taken targeted advertising to heights unimaginable even a few decades ago when mass media was unidirectional.
Hardly surprising then that the two most successful companies in the history of the internet have mined the consumer’s mind for advertisers. Google did it first by serving up your searches. Facebook takes it a step further by revealing to marketers what you choose to tell the world about yourself. Neither set out by announcing to you that your privacy would be invaded as a price for using free services — you had to read it in the fine print. The default setting remains to maximum exposure. With rules being written about what constitutes the digital commons, Facebook and Google are haltingly pulling down the blinds on their subscribers. But make no mistake, advertising drives the Net and it has an insatiable appetite to slice the audience to the lowest common denominator: the individual. There is only so much privacy Messrs Zuckerberg, Brin and Page can protect and still remain in business.
Money can, however, protect your privacy. If we agree to pay Facebook a fee for lugging the school reunion photographs halfway across the world to another desktop, it wouldn’t need to rely on the advertising dollar to scale up to 500 million users. The world needs to accept that its online alter ego does not come free. Till then you are your best defence against the digital Big Brother. What each of us shows on Facebook is tantalising, what we conceal is vital. Samuelson hadn’t accounted for this in his behavioral theory, which has, according to one critic, served little purpose than being a ‘reassurance fetish’. The last frontier for economics is the human mind and it has steadfastly refused to yield itself to mathematical modelling. Meanwhile, fortunes will be made and unmade by those promising to give you a peek into it.