historic culture and institutions, differing virtually only in the form of political and economic organization, which were adopted by those societies at war ’ s end. almost a half - century later, when the berlin wall was torn down, the results of this remarkable experiment vividly and unqualifiedly attested to the superiority of the west german free market system based on individual rights, a system where people lived with minimum fear of the state ’ s intrusion into their daily lives. in east germany, in contrast, to assure that society was appropriately collectivized, it was necessary to probe into the private lives of all individuals and suppress individual freedoms. human beings had to be molded by force to achieve the east german leaders ’ distorted view of societal organization. privacy was scarcely the goal or purpose of the east german state. indeed, intrusiveness into the lives of all of the citizens was perceived to be an essential ingredient in its organization. the political and economic results of the post - war competition between east and west generally have been unequivocal. the free market capitalism of west germany has been judged superior in all relevant respects, with very few dissenting from that conclusion. the human need for privacy surely was a major factor in that outcome. to be sure, our newer information technologies can scarcely be perceived as the type of threat to privacy as that of the soviet state. nonetheless, the same pressing need for privacy, which helped upend the soviet union, can be expected to address and overcome concerns that our newer technologies will intrude on our cherished need for privacy. communism fell because its practice eliminated personal incentives to work and to acquire property, except in a very limited sense. the existence of such incentives requires the broad freedoms we enjoy to pursue our myriad personal goals. it was the deprivation of these incentives and the suppressing of competition among individuals, the hallmark of a growing economy, which brought communism down. since privacy is such an evident value in our society, where technology threatens that value, entrepreneurs can be counted on to seek means to defend it. the major resources they have devoted to encryption in the development of new communication systems attest to the economic value they place on privacy in communications. moreover the pressures to enact legal prohibitions on the dissemination of personal records will also create incentives to produce technologies that protect them. indeed, the most effective means to counter technology ’ s erosion of privacy is technology itself. the marketplace is burgeoning with new devices to this end. these devices, of

course, include the many advances for encrypting and filtering information. we may even see the deployment of technologies that permit individuals to make choices calibrating their degree of privacy in conducting individual transactions. with some irony, even some of the ability of the government to pursue protection of individual rights is being impaired by effective encryption. this leads to the important question of how to balance the legitimate expectations of individuals for privacy with the needs of government for information to effectively administer the laws and provide for the public safety. the most delicate care is needed in this regard to prevent unnecessary intrusion when specific government decisions are implemented and to avoid the risk of a gradual, long - term erosion of privacy. beyond these issues are immediate questions about privacy in the delivery of professional, commercial, and financial services over open computer networks as well as personal communications through devices such as e - mail. for example, there are typically strong assumptions about privacy surrounding medical, legal, and financial communications and records. these assumptions are designed to safeguard the autonomy of the individual and to facilitate a society where special expertise can be developed and called upon, when necessary, to promote the individual ’ s welfare. it would be a strange outcome, indeed, if traditional notions of privacy applied only at the physical office of the doctor, lawyer, or banker, but not when modern computer technologies were employed to make professional services available at lower cost and with greater convenience. it may be that some services and communications channels will be used regardless of what privacy guarantees are provided. providing medical advice by computer network to rural areas with no resident doctors may be one example. more common services, however, such as certain cellular telephone technologies and the use of e - mail over the internet, are subject to less privacy than some other modes of communication, although extensive efforts are currently being directed to address that. the growing use of credit cards without security measures to pay for goods and services over open networks is another example. clearly, as these examples demonstrate, privacy concerns may be outweighed, if only for the moment, by other factors such as cost and convenience. however, given choices in the marketplace that include price, quality and differing degrees of privacy, i have little doubt that privacy would be valued and sought after. in the financial sphere, the payment systems of the united states present a paradox. our systems, and banking arrangements, for handling high - value dollar payments are all electronic and have been for many years. banking records, including those for loans and deposits, have been