Private Property without Privacy: Private Information and the Silent Transformation of Ownership in the Information Age

Private Property without Privacy 1 Private Property without Privacy Private Information and the Silent Transformation of Ownership in the Information Age David Matta American University of Beirut https://doi.org/10.5281/zenodo.18051348 Abstract Classical political economy treats private property as foundational to economic coordination and individual autonomy. This paper argues that while private property remains formally intact, it has been substantively hollowed out by the erosion of privacy in the information age. The central claim is that private information—defined as the owner's privileged epistemic access to knowledge relevant to her assets—is a necessary condition for meaningful private property. When such information is no longer privately controlled, ownership persists only as legal fiction rather than effective sovereignty. Through analysis of software licensing, smart property, and decentralized finance, the paper shows how contemporary property increasingly functions as conditional, reversible, access-based arrangements dependent on informational infrastructures governed by others. Revisiting Hayek's epistemological defense of property, the analysis demonstrates that the loss of informational privacy undermines the assumptions that allowed private property to sustain an extended order. The paper engages with objections from information economics and cryptographic privacy, examines systemic risks to economic stability, innovation, and political order, and concludes that the defining challenge of our time is not the abolition of private property, but the disappearance of the private itself. Private Property without Privacy 2 Keywords: Private property; private information; epistemic sovereignty; Hayek; extended order; information asymmetry; phenomenology of ownership; access-based economy; surveillance capitalism; digital social contract 1. Introduction The contemporary crisis of private property is often framed in economic or legal terms: rising inequality, declining home ownership, financialization, platform capitalism, or the volatility of digital assets. Yet such diagnoses overlook a deeper and more fundamental transformation. What is being eroded today is not simply property, but the very category of the private. To say that something is private once meant more than legal ownership. It implied a zone of opacity, a sphere of control insulated from continuous observation, prediction, and external intervention. Private property presupposed private knowledge: the owner knew more about her assets than anyone else, could decide when and how to use them, and could plan for the future without constant informational exposure. This epistemic asymmetry was not accidental; it was constitutive of ownership itself. In the information age, this condition no longer holds. Economic life is increasingly organized around infrastructures that render behavior legible, assets traceable, and decisions predictable (Zuboff, 2019). Information about ownership, use, value, and intent is routinely collected, processed, and redistributed by actors other than the owner. As a result, ownership persists formally while losing its substantive privacy. Before proceeding, a terminological clarification is essential. This paper distinguishes between privacy as a general normative and legal concept—the right to be free from unwanted intrusion—and private information as an epistemic condition of ownership. Private information, in the sense employed here, refers to the owner's privileged access to knowledge Private Property without Privacy 3 relevant to her assets: knowledge of their condition, use, risks, constraints, and future possibilities. The argument of this paper concerns specifically the erosion of private information as a constitutive condition of meaningful property. This paper advances a strong claim: the private is undergoing a structural erosion that fundamentally alters the conditions required for classical private property to function as an institution of autonomy and coordination. The claim is not that privacy has vanished absolutely—physical cash, certain forms of local knowledge, and some analog domains retain degrees of opacity. Rather, the argument is that across the most economically significant forms of property in contemporary life, the informational conditions that once sustained meaningful ownership have been systematically undermined. The argument developed here builds on earlier work on the digital social contract, which argued that identity, agency, and moral responsibility in the age of artificial intelligence depend on the protection of informational boundaries that allow individuals to act as authors of their own lives (Matta, 2025). The present paper extends this concern into the domain of political economy, showing that private property itself presupposes similar conditions of informational control. The analysis proceeds as follows. Section 2 clarifies the informational assumptions embedded in classical accounts of private property. Section 3 develops the conceptual distinction between private property and private information. Section 4 grounds these claims in case studies. Section 5 offers a phenomenological analysis. Section 6 examines institutional transformations. Section 7 engages with objections and analyzes systemic implications. Section 8 concludes. Private Property without Privacy 4 2. Private Property and the Assumption of Privacy in Classical Political Economy Classical political economy rarely treated privacy as an explicit concept. Yet the functioning of private property within its theoretical frameworks presupposed a robust distinction between the private and the public, grounded not only in law but in information. Ownership implied control, exclusion, and decision-making authority, all of which depended on the owner's privileged access to information about the asset in question (Locke, 1689; Smith, 1776). In agrarian, industrial, and early capitalist economies, property was typically local, tangible, and relatively stable. Owners possessed superior knowledge of their assets' condition, productivity, risks, and potential uses. This informational asymmetry between owner and non-owner was constitutive of ownership. To own was to know more, decide more, and intervene more than others. This assumption is especially clear in the tradition associated with Friedrich Hayek. Hayek's defense of private property rested on the dispersion of knowledge in society and the impossibility of centralizing it without catastrophic loss of coordination (Hayek, 1945). Prices, emerging from voluntary exchanges among property holders, were understood as signals that condensed localized, tacit, and often inarticulable knowledge. For this mechanism to function, property holders had to retain meaningful control over their resources and the information relevant to their use. Importantly, Hayek's argument assumes that while knowledge is socially dispersed, it remains agent-relative. Individuals know more about their own circumstances, assets, and intentions than any external authority could (Hayek, 1945, 1960). This epistemic asymmetry Private Property without Privacy 5 is what justifies decentralization. Private property, in this framework, is inseparable from the privacy of decision-making and the opacity of individual plans. What is striking, in retrospect, is how little these traditions considered the possibility that informational privacy itself might erode while formal property rights remain intact. Classical accounts implicitly assumed that ownership entailed a stable alignment between legal title, material control, and epistemic sovereignty. This omission was not a theoretical failure but a historical constraint. The institutional and technological conditions of earlier economies made privacy the default rather than the exception. Information traveled slowly, observation was costly, and intervention required physical presence. The contemporary situation represents a break with this background assumption. While property rights continue to be defined and enforced legally, the informational conditions that once sustained their meaning have been transformed. The classical conception of private property thus confronts a paradox: it survives formally while losing the informational environment that made it function as intended. 3. From Private Property to Private Information The argument so far has shown that classical political economy presupposed privacy as a background condition of ownership. This section advances the paper's central conceptual move: private information is not merely complementary to private property but has become its necessary condition. 3.1 Property as Control, Not Title Private Property without Privacy 6 At its core, property has never been reducible to legal title alone. Ownership implies a bundle of powers: the ability to use, exclude, transfer, modify, and plan around an asset across time. These powers require more than juridical recognition; they require epistemic access. In earlier property regimes, such knowledge was embedded in material interaction. To own land was to know its fertility; to own a machine was to know its limits. Information was acquired through use and retained by proximity. Privacy followed naturally from physical boundedness. In contemporary economies, however, the locus of information has shifted away from the owner. Assets are increasingly governed by external informational systems: algorithms determine valuation, platforms regulate access, compliance rules update dynamically, and predictive models anticipate behavior (Lessig, 2006). Ownership remains legally intact while epistemic control migrates elsewhere. 3.2 Information as the New Site of Power This shift marks a structural transformation. Where property once concentrated control through possession, it now depends on informational mediation. The decisive question is no longer "Who owns the asset?" but "Who controls the information that defines its use, value, and future?" Consider the modern forms of ownership that dominate economic life: financial assets whose value fluctuates based on models inaccessible to individual holders; housing governed by zoning algorithms and credit scoring systems; digital assets existing within protocol rules subject to change without consent; money held as entries in systems governed by third-party surveillance. 3.3 The Collapse of Informational Privacy Private Property without Privacy 7 Zuboff (2019) has analyzed this phenomenon under the rubric of "surveillance capitalism," describing how human experience is translated into behavioral data that is then used for prediction and modification of future behavior. The concept of epistemic sovereignty developed in this paper complements Zuboff's analysis while focusing specifically on the property relation. Where Zuboff emphasizes the extraction of behavioral data for commercial prediction, the present analysis emphasizes how this extraction undermines the informational conditions that make ownership meaningful. When information about assets and behavior becomes public, predictive, or asymmetrically accessible, ownership loses its private character. Decisions are anticipated, risks are priced externally, and actions are preemptively constrained. The owner no longer stands at the center of the decision-making process but becomes one node within a broader informational network. 3.4 Ownership as Conditional Participation The result is a transformation of ownership into what may be described as conditional participation. Access replaces possession, compliance replaces discretion, and use is governed by evolving informational criteria rather than stable rights. This shift is silent because it does not announce itself as expropriation. There is no dramatic seizure, no formal abolition of rights—only gradual reconfiguration. 4. Case Studies: The Transformation of Ownership in Practice The conceptual framework developed above finds concrete expression in contemporary economic life. This section examines three domains where the erosion of private information has fundamentally altered the meaning of ownership. 4.1 Software Licensing: From Ownership to Perpetual Tenancy Private Property without Privacy 8 The transformation of software from purchased product to licensed service exemplifies the shift from ownership to conditional access. Consider Adobe Creative Cloud, which replaced Adobe's perpetual license model in 2013. Users who once purchased software outright now subscribe to a service requiring continuous payment, internet connectivity, and acceptance of evolving terms of service. Under the subscription model, Adobe retains informational sovereignty over the software. The company monitors usage patterns, can remotely disable access, and updates software according to its own priorities. The user cannot know with certainty whether features will persist or whether files will remain accessible. The informational asymmetry that once favored the owner now favors the licensor. 4.2 Smart Property: Ownership under Continuous Surveillance The proliferation of Internet of Things devices extends this dynamic into physical property. A Tesla owner holds legal title to a vehicle, yet the car's functionality depends on software that Tesla controls and can modify remotely. In 2020, Tesla remotely reduced the battery capacity of certain vehicles after purchase, later restoring it through another over-the-air update. This incident revealed a fundamental truth about smart property: the owner's control is subordinate to the manufacturer's informational access. Tesla knows more about each vehicle—its location, driving patterns, battery health, and software state—than its nominal owner. Similar dynamics characterize smart home devices from Amazon, Google, and others. It should be noted that not all technological mediation erodes informational sovereignty. Open-source software preserves user control by making source code transparent. These counter-examples confirm that informational sovereignty is the decisive variable. The dominant trajectory, however, is toward extraction rather than preservation. Private Property without Privacy 9 4.3 Decentralized Finance: The Paradox of Trustless Ownership Decentralized finance presents a particularly instructive case because it explicitly promises to restore informational sovereignty through cryptographic means. Yet the reality reveals complexity. First, the rules governing assets are encoded in smart contracts that most users cannot audit. The 2022 collapse of the Terra/Luna ecosystem, which erased over $40 billion in value, demonstrated how quickly "owned" assets can become worthless when protocol assumptions fail. Second, while transactions may be pseudonymous, they are permanently recorded on-chain. Blockchain analytics firms like Chainalysis can trace histories and de-anonymize users. Third, when the U.S. Treasury sanctioned the Tornado Cash protocol in 2022, users found their "permissionless" assets suddenly inaccessible through major interfaces. The informational infrastructure surrounding ownership proved more determinative than ownership itself. 4.4 Synthesis Across these cases, common patterns emerge. Ownership is increasingly mediated by infrastructures that owners do not control. These infrastructures generate asymmetries favoring providers over owners. The conditions of ownership can be altered unilaterally by those who control the informational layer. 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