This article was originally published by Michael S. Milano at The Mises Institute.
In the serenity that privacy affords, we choose the facets of our lives that we wish to leave untouched by the world. Supreme Court Justice Louis Brandeis, in his Olmstead v. United States dissenting opinion, famously described privacy as “the right to be let alone.” But at a deeper level, privacy is a safeguard for liberty. It’s a pillar of decentralized institutions and a foundation of free societies.
For anyone who harbors ideologies that deviate from those deemed “acceptable,” privacy is not merely a luxury but a necessity. For everyone else, it’s worth remembering that norms are shaped by societal and political pressures, and are thus fluid in nature. No one can predict how their earlier beliefs or actions may be judged by a future society or regime. In light of this, the importance of privacy became even more pronounced when surveillance went digital. An inability to operate beyond the watchful eyes of others threatens one’s freedom to speak and associate openly. In the absence of private spaces, fear of retaliation for holding “unacceptable” beliefs breeds chilling effects, leading to self-censorship.
Over two centuries ago, the Founding Fathers recognized privacy’s importance. Although not explicitly protected by the Bill of Rights, privacy is woven into the First, Fourth, and Fifth Amendments. On the international stage, the UN has declared it a human right. Beyond the confines of legal protections, the desire for privacy is reflected in everyday habits worldwide. Across cultures, people intuitively refrain from total transparency. Whether it’s closing the bathroom door, using blinds and curtains inside their homes, or refusing to hand a stranger their unlocked phone to read their texts and emails, most people choose to shield certain aspects of their lives from public view.
For much of human history, one’s associations, conversations, and transactions were inherently private. Everything changed with the advent of the digital age: surveillance capitalism turned users into products by offering free services, and states broadened their reach under the guise of protecting the populace. Armed with vast amounts of data and ever-improving algorithms, the ability to analyze thoughts and behaviors at scale moved from dystopian fiction to an unsettling reality. With the click of a button, those in power could peer into the deepest recesses of our private lives.
Privacy concerns have been present since the early days of the internet. In 1995, the Pew Research Center found that half of Americans were already worried about computers invading their privacy. As the technology advanced, anxiety over personal data protection continued to grow. By 2020, a Consumer Reports survey revealed that 62 percent of smart product owners in the US were concerned about losing their privacy. A 2023 Harris Poll across multiple countries—Australia, France, Germany, India, Japan, New Zealand, the UK, and the US—found that 75 percent of respondents believed it was important to disguise their digital footprint, and 83 percent expressed a desire to do more to protect their personal information.
Observing behavior, however, paints a different picture. In the nascent days of the internet, entering a credit card number online was perceived as risky. But over the years, social media became ubiquitous, and people grew comfortable sharing anything and everything about their lives online. This trend extends across the broader internet, where privacy is frequently disregarded. Up until 2017, Google scanned emails to serve personalized ads. Now, Google is allowing its AI assistant, Gemini, to do the same for the purpose of generating smart replies. Three-quarters of Americans still use Gmail. As of April 2025, Google Chrome and Microsoft Edge together held 71 percent of the global browser market share. Yet both of these browsers are notorious for their privacy infringements. VPN usage on the surface appears to defy this trend, with 46 percent of Americans using one. However, 43 percent of them rely on free versions that may log IP addresses, raising the risk of data harvesting.
The term “privacy paradox” was coined in a 2001 study to describe the divergence between a person’s expressed concerns about privacy and their actual behavior. Despite voicing worries about exposing personal data, individuals continue to engage with platforms and services that compromise their privacy. Researchers across disciplines have explored attitudes toward privacy, from studying willingness to pay for protection to conducting behavioral experiments. While most studies support the privacy paradox, a few have produced conflicting results. Regardless of the extensive research into this phenomenon, from a praxeological perspective, there never could have been a paradox to begin with. Through demonstrated preference, a person’s real-world choices reveal their true valuations, even if their abstract claims suggest otherwise.
Demonstrated Preference & Subjective Value Theory
In praxeological terms, individuals pursue specific ends through purposeful action, utilizing the means at their disposal. To achieve those ends, each individual subjectively ranks goods and services from the most to the least preferred. Demonstrated preference—which extends subjective value theory—is revealed through observable behavior. The choice a person makes is a concrete illustration of their value scale, where the selected good or service is ranked above all alternatives. Unlike hypothetical scenarios posed in questionnaires, demonstrated preference is grounded in real-world behavior. As explained by Murray Rothbard:
The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action.
Privacy Paradox Revisited
Ask yourself: How much do I value my privacy? How much time and money would I be willing to spend to conceal my personal details from public view? How much do I care about this relative to other things?
Now, imagine that you need to create a new email address. All the email service providers that you’re aware of are ordinarily ranked from the most to the least preferred. If making a highly informed decision is a priority, you have the option of investing time to research and expand your list. The email service that you sign up for will be based on convenience, ease of use, price, privacy, and any other relevant factors. No matter how you answered the above questions about your privacy valuations, in practical terms, your decision represents your demonstrated preference.
The decision is ultimately subjective for each person. It occurs at a singular place and time, using an ordinal ranking that is ephemeral in nature. If a change in circumstances prompts an individual to reassess their previous decisions, they will adjust their rankings in accordance. For example, following egregious breaches of trust, people have become more aware of the risks associated with sacrificing privacy and have altered their behavior. The Cambridge Analytica scandal and Edward Snowden’s revelations led to shifts toward privacy preservation. In the end, there is no paradox—people merely ordinarily rank each service and platform at a single point in time. If a situation arises that prompts a reassessment, they will adjust their rankings, prioritizing goods and services that protect privacy, and act accordingly.
Conclusion
The problem with privacy is that it’s often not appreciated until it is gone. Privacy is essential for everyone, even those who believe their actions are beyond reproach. In the words of Edward Snowden: “Arguing that you don’t care about the right to privacy because you have nothing to hide is no different than saying you don’t care about free speech because you have nothing to say.”
If privacy is a precursor to freedom, and if privacy is indeed a natural right, then it’s imperative that we each protect it through our actions. The ramifications of neglecting it cannot be overstated. In a world where our histories are recorded, holding beliefs or engaging in actions that contradict the prevailing narrative can have severe consequences. Punishments for “unacceptable” views have ranged from deplatforming and debanking to deportations and incarcerations. As civil liberties continue to erode in so-called liberal democracies, dissidents over the past few years have been targeted over issues related to covid, wokeism, the Russo-Ukrainian war, and the Israeli-Palestinian conflict. No matter where you stand ideologically, there will always be others who find your beliefs abhorrent—and there’s a real possibility that those very individuals could one day seize the reins of power. The next time you use a service that demands deeply personal information, consider the potential ramifications of neglecting your privacy before demonstrating your preference.
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