This is a great paper [pdf file] by Andrew Odlyzko. The thesis of the paper is that the primary factor driving the erosion of privacy in America is not anti-terrorism or surveilence but price discrimination. Basically, price discrimination means charging different prices to different customers. Price discrimination is necessary in order for markets to function most efficiently, and it tends to push down profits and average prices (witness the airline industry). There are strong economic arguments that say that price discrimination results in a net social and economic good. Nevertheless, consumers tend to hate it passionately, both for its perceived unfairness and the invasion of privacy which is often necessary to achieve it. This article surveys the tension between these two forces and draws an analogy to 19th century railway pricing; the author also briefly discusses the ways that price discrimination is hidden, for instance via bundling. [via IP]