National IDiocy

Named after a 1970s’ Central Intelligence Agency (CIA) consulting project that started the enterprise, Oracle Corporation has grown into the worldwide leader in database software. Perhaps it is because the company got its start in the surveillance industry that Oracle Chairman Larry Ellison recently launched a campaign for a National Identification (ID) card and a database to track American citizens. In a recent Wall Street Journal op-ed, Ellison argued that such a database may have prevented the September 11th terrorist atrocities, and volunteered to provide the necessary Oracle database software to the government free-of-charge.

On its face, Ellison’s proposal appears to be a self-interested scheme to capture a government contract worth tens of billions of dollars by “giving away” the first version and charging taxpayers for upgrades, data storage, and maintenance for years to come. But Ellison’s proposal has been given serious consideration, most notably by Senator Dianne Feinstein (D-Calif.), who has championed the ID card idea since 1995. In the wake of the 9/11 terrorist assaults, other policymakers have voiced support for the measure and several pundits from across the political spectrum have sung the praises of a nationwide tracking system.

The argument for a National ID and database is a product of the conventional wisdom that the great deficiency of our counter-terrorism apparatus is the lack of coordination between local law enforcement, the Immigration and Naturalization Service (INS), the Federal Bureau of Investigation (FBI), and the Central Intelligence Agency (CIA). Proponents of a national ID card argue that these agencies already have computer files that chronicle the lives of individuals in laborious detail; a national database would simply be a clearinghouse for all of this information.

But a national ID card is not necessary for better coordination among government entities; it would only add another bureaucratic layer to the disparate systems already in place. It would cost at least $2.5 billion to get a national ID card system up and running, but the costs associated with migrating, re-formatting, and cleansing the data of the various agencies would be far more. And that is before adding all of the relevant regulatory costs associated with purchasing the necessary hardware to read the ID cards. If a special ID card reader were required at every gate of every airport, the costs would be enormous. The same would be true for banks, trains, and retailers if they were brought into the ID card fray.

Of course, ID card supporters say that any system would be “voluntary” and used only in circumstances where security is at stake. But given the recent debate over anti-terrorism legislation, what part of economic life can truly be said not to involve security? As lawmakers have argued, copious records of cash transactions can benefit law enforcement by alerting them to suspicious activity, as could records of large purchases of fertilizer and racing fuel. And Internet anonymity can threaten government’s ability to know what terrorists are doing at all times. Once you require national ID cards for one mode of transportation or commercial transaction, you invite government to regulate all commercial activity under the guise of “security.”

Even in those rare instances when government may not require ID verification, the private sector will likely cling to the protocols and standards mandated by the government database. For instance, access to subscriber-based online content, online shopping, and online stock trading and banking all require software to verify that their customers are who they say they are. This “authentication services” industry is a hotbed of innovation and market rivalry. Software companies, from titans like Microsoft and AOL Time Warner, to lesser-known firms like Kerberos and GeoTrust, are pursuing business strategies to capture this market. If the government were to institute a National ID system, it would slam the door on such entrepreneurial activity and deprive consumers and retailers of the ability to shop around for the best verification system. Worse, if the history of government decisions on matters of technological standards is any guide, the government will select the technology most likely to be surpassed in a few years, at the expense of more innovative solutions.

Maybe Larry Ellison’s National ID proposal is well intentioned and not derived from self-interest. As a recent letter to the editor put it, “I guess that if you are selling databases, everything looks like a database solution.” But whatever the motivation behind it, the notion of a national ID card and database must be rejected. Its threat to privacy and commerce is unambiguous, while its benefits are largely exaggerated. After all, the 9/11 hijackers were foreign nationals who entered the U.S. legally. How could an ID card issued to American citizens have done anything but provided air passengers a false sense of security?

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