Big Iron and the Small Government: On the History of Data Collection and Privacy in the United States

In early 1963, the IRS installed a new IBM model #7074 computer inside a “starkly antiseptic” 40-foot room just east of Martinsburg in the West Virginia hills. The machine was a rental, leased at a hefty $4,000 per day, but IRS Chief Mortimer Caplin was confident the increased efficiency it brought to tax collection would far outweigh the cost. When news of the upgrade went public, cartoons in the press depicted bleak Orwellian scenes of taxpayers being spied upon by mechanical brains and gigantic machines with long tentacles weaving in and out of living rooms, banks, and the U.S. Treasury. Popular Science reported that “as far as the IRS is concerned, your personality, history, and spirit … will be reduced to magnetic specks on a single reel about the diameter of an LP record,” and predicted that soon large corporations might also plug into “Big Brother 7074.” Representative James Oliver (D-Maine) eloquently expressed this same sentiment years earlier in a House Subcommittee on Government Statistics: “It’s my impression that these machines may know too damn much.”¹

Contemporary observations about privacy and data collection in the United States, now one of the foremost concerns facing our society, are legion. We decry the privacy problems raised by the digital age while simultaneously wondering what solutions, if any, are at our disposal to balance these concerns with the clear advantages in efficiency and convenience digitization affords. Yet as this conversation matures in the academic community, historians have remained noticeably silent about information privacy. They have left the heavy lifting to legal scholars, journalists, political scientists, and technology experts. This lack of historical engagement is troubling when we consider that the current state of data collection was largely a product of political, social, and cultural developments that date back to the Eisenhower era. Americans have been debating this issue for more than half a century.²

Privacy is, by nature, a multifaceted concept, and the current literature on information privacy is far from monolithic. Modern tech studies have been very useful in chronicling the extraordinary growth of information systems and the increasing sophistication of data processing. They bring much needed attention to the impact of digitization on personal privacy and better equip us to understand the capabilities data holders have to use information in ways we may find objectionable. But these works are almost always rooted in presentism and can mischaracterize the vast expansion of data collection by public and private entities in the United States as no more than an inevitable byproduct of technological evolution.³

The legal community has given considerable attention to issues of privacy over the last twenty years, so much so that information privacy has been legitimized as a distinct field of legal inquiry. The search for legal remedies to modern privacy problems has yielded a better understanding of where the right to privacy is located in our liberal democratic framework, where the law has not kept pace with technology, suggestions for appropriate enforcement mechanisms, and a more precise conceptualization of what privacy means. These contributions have been invaluable in many regards, but they also tend to ignore how perceptions of privacy are shaped by social and cultural forces, often get bogged down in debates over definition and precision, and can overlook the fact that legal proscriptions are just one among a variety of factors that influence the decisions of data holders.⁴

In the realm of political science, scholars have sounded the call for a more rigorous engagement with information privacy by positioning it as a concept rooted in political theory and public administration. Among the more notable contributions have been profiles of the various actors and strategies employed by modern privacy advocates and broader comparative studies of international privacy policies that seek a better understanding of why, as Colin Bennett and Charles Raab have pointed out, “the United States is now the only advanced industrial state that has not passed, or is not in the process of passing, a [comprehensive] data protection law covering private sector activities.” But...