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Bruce Schneier excerpted from The Myth of the 'Transparent Society' @ Wired.com
When I write and speak about privacy, I am regularly confronted with the mutual disclosure argument. Explained in books like David Brin's The Transparent Society, the argument goes something like this: In a world of ubiquitous surveillance, you'll know all about me, but I will also know all about you. The government will be watching us, but we'll also be watching the government. This is different than before, but it's not automatically worse. And because I know your secrets, you can't use my secrets as a weapon against me.
This might not be everybody's idea of utopia -- and it certainly doesn't address the inherent value of privacy -- but this theory has a glossy appeal, and could easily be mistaken for a way out of the problem of technology's continuing erosion of privacy. Except it doesn't work, because it ignores the crucial dissimilarity of power.
You cannot evaluate the value of privacy and disclosure unless you account for the relative power levels of the discloser and the disclosee.
If I disclose information to you, your power with respect to me increases. One way to address this power imbalance is for you to similarly disclose information to me. We both have less privacy, but the balance of power is maintained. But this mechanism fails utterly if you and I have different power levels to begin with.
An example will make this clearer. You're stopped by a police officer, who demands to see identification. Divulging your identity will give the officer enormous power over you: He or she can search police databases using the information on your ID; he or she can create a police record attached to your name; he or she can put you on this or that secret terrorist watch list. Asking to see the officer's ID in return gives you no comparable power over him or her. The power imbalance is too great, and mutual disclosure does not make it OK.