15 May 2009 8:51 am   //   Filed under: In the news, Technology

Buying bird food

“You have zero privacy… Get over it.” — Scott McNealy, Sun Microsystems CEO, 1999

Take a minute and think about all the electronic data that exists about you.

The credit card company knows where I shop, and how often. The stores know which products I buy. The phone company has a record of all my travels—they know which celluar towers my phone is near, and I seldom go anywhere without my phone. The bank knows how often I get cash, how often I check my balance online, and at what times of day. Google knows which blogs I read and what I search for. My Internet provider and my employer, theoretically, can read every e-mail I write. Experian knows every addresses I’ve lived at since I was a kid. TransUnion knows where I’ve worked. Google Maps has a photo of my apartment on file for all to see. I still have copies of my academic records on my computer, and I bet my university has them backed up somewhere.

We haven’t even gotten to the stuff I voluntarily make public—my Twitter posts, my FaceBook profile, this blog, the stories I publish and the presentations I give as a journalist.

The New York Times Magazine has a story this week about what credit card mathematicians know about customers. Most companies are conservative about taking action based on what they know, but oh the things they know! Example: People who buy wild bird seed are likely to make their credit card payments on time.

Where does this lead? Under one scenario, companies or the government will gather as much information as they can and run it through complex algorithms to evaluate everyone. With every choice we make, we’ll have to think about how it would appear if examined by an outsider. Will buying a beer hurt my credit score? Life will be about cheezy, tedious, pointless rules: SAT prep or search engine optimization, but for real life. We’ll lose our freedom to be original.

But then there’s a second scenario, one that I think is more likely. For decades, banks and mortgage lenders have had access to credit scores and other predictive data about how people will spend money, and they still blew it. Hence the credit crisis. Company forecasts for 2009 have been wrong everywhere. Stock brokers, who trade in math and numbers, have lost heaps of money. The temptation to doubt statistics—and the fact that statistics can be manipulated and sometimes contradict each other—is too powerful.

Human nature means most of the data we collect is useless field of noise. Are we really to believe that we can process massive amounts of data and use it to predict human behavoir? Our digital record says a lot about us, but it still can’t predict what we’ll do next. We’re kind of random like that.