I’m pleased that someone picked up on my offhand mention of the likelihood that deep and broad NSA surveillance will have a negative effect on the value of the Internet as a commercial platform for value creation and posted the link on reddit. Thanks!
Since I didn’t intend to provide any in-depth analysis on that point, and some of the reddit commenters are taking me to task for not doing so, I encourage reading James Fallows of The Atlantic on this point: Why NSA Surveillance Will Be More Damaging Than You Think. For example:
The problem for the companies, it’s worth emphasizing, is not that they were so unduly eager to cooperate with U.S. government surveillance. Many seem to have done what they could to resist. The problem is what the U.S. government — first under Bush and Cheney, now under Obama and Biden — asked them to do. As long as they operate in U.S. territory and under U.S. laws, companies like Google or Facebook had no choice but to comply. But people around the world who have a choice about where to store their data, may understandably choose to avoid leaving it with companies subject to the way America now defines its security interests. …
What governments do eventually becomes known. Eventual disclosure is likely when a program involves even a handful of people. (Latest case in point: Seal Team Six.) It is certain when an effort stretches over many years, entails contracts worth billions of dollars, and requires the efforts of tens of thousands of people — any one of whom, as we’ve seen from Snowden, may at any point decide to tell what he knows.
In launching such an effort, a government must assume as a given that what it is doing will become known, and then calculate whether it will still seem “worthwhile” when it does. Based on what we’ve seen so far, Prism would have failed that test.