Data Storage Capacity
Back in 1997, I wrote an article entitled Here’s Looking at You, which examined the ways in which big government was encroaching upon our private lives. The piece was published in February 1998 in a very popular national men’s magazine. (In my defense, I hasten to add that these glossy periodicals were among the very few public outlets, before Casey Research was born, for journalists who wrote about such “fringe” topics.)
As I was writing this piece you are now reading, I couldn’t help but take a look back fourteen years. It seems almost like a prehistoric era… before 9/11, the PATRIOT Act, wars in Iraq and Afghanistan, drones, “free-speech zones” at political conventions, wall-penetrating radar, iPhones, and wholesale government monitoring of email and phone conversations, among a zillion other things. Heck, even the Internet was still more or less a novelty: I found that I had cautioned readers to be mindful of an insidious newfangled thing called “cookies.”
The tech of today is light-years more advanced. But even back then, I was concerned. And I predicted where I saw the trend heading. Naturally enough, not all of my predictions came to pass – I was certain for instance that by now we’d have a national ID card – but unfortunately, most of them did.
The reason I bring this up here is not to tout myself as particularly prescient. It’s to note something of actual importance. In 1998, I could still maintain that our saving grace was that data-storage capabilities were way insufficient for the total surveillance of hundreds of millions of Americans and probably would be for a long time to come.
How wrong I was.
It is already technologically feasible for governments to record nearly everything that is said or done within their borders – every phone conversation, electronic message, social media interaction, the movements of nearly every person and vehicle, and video from every street corner.
Before long, it’ll also be financially feasible to archive it, according to a sobering report published last December by the Brookings Center for Technology Innovation.
The report concludes that: “Plummeting digital storage costs will soon make it possible for authoritarian regimes to not only monitor known dissidents, but to also store the complete set of digital data associated with everyone within their borders. These enormous databases of captured information will create what amounts to a surveillance time machine, enabling state security services to retroactively eavesdrop on people in the months and years before they were designated as surveillance targets. This will fundamentally change the dynamics of dissent, insurgency and revolution.”
Emphasis mine. Consider the implications.
The key, according to the Brookings report: “Over the past three decades, [data] storage costs have declined by a factor of 10 approximately every 4 years, reducing the per-gigabyte cost from approximately $85,000 (in 2011 dollars) in mid-1984 to about five cents today.” Using GPS, mobile phone and WiFi inputs, “identifying the location of each of one million people to [a 15-foot] accuracy at 5-minute intervals, 24 hours a day for a full year could easily be stored in 1,000 gigabytes, which would cost slightly over $50 at today’s prices.” Fourteen cents a day to archive the collective movements of any selected million of us.
Phone calls? “The audio for all of the telephone calls made by a single person over the course of one year could be stored using roughly 3.3 gigabytes. On a per capita basis, the cost to store all phone calls will fall from about 17 cents per person per year today to under 2 cents in 2015.”
Video storage takes far more space, of course, and there are also major logistical problems involved in managing such a huge amount of data. But the point is made. Technological innovation will provide the tools. And as soon as government can do something, they invariably will do it.
Investing
These few examples, winnowed from hundreds of others I could cite, testify to a mushrooming new industry in the US, what some have called the cyber-industrial complex.
It’s big business. How big we don’t know, because much of it is shrouded in either government or corporate secrecy. The Washington Post‘s Dana Priest, twice a Pulitzer winner and one of the few true investigative journalists in America still working inside the mainstream media, published some groundbreaking work on the subject in the summer of 2010. If you haven’t read it already, you should. The website is dynamic, with regular updates posted on the subject and reader input invited.
Several other recent probes also have opened the shadowy surveillance world to a little more light. You can check out some of the latest techniques and which companies are implementing them at The Surveillance Catalog published by the Wall Street Journal and The State of Surveillance: The Data, published by the Bureau of Investigative Journalism.
Perhaps in your browsing you’ll find some publicly traded companies that will attract your investment interest. For our part, at Casey Research we prefer to seek out companies that are engaged in changing our world for the better rather than the worse. Those are the ones you’ll find in our portfolio.
In the end, we must acknowledge that technological advancement, especially at the rate we’re experiencing it in the present era, is bound to spawn evil applications along with the good. But we’re optimists here. We believe humanity is in a long-term uptrend, with technology setting torches on the path to a better life.
But that all depends on keeping people free. That’s why we will continue to expose – and oppose – government efforts to stifle innovation, creativity, and personal liberty. I’m not holding my breath but perhaps eventually Washington, D.C. will get the point, and follow our lead.
[Technology wars are being waged in a variety of ways, but the one that may affect investors the most is the war for the best talent. You have to invest smart to be on the winning side of this battle; learn how to back the victors and reap outsized profits.]
